Law Firm Buys Another Law Firm's Name as GoogleAd Word. Scuffle Ensues.
Binder & Binder is a national law firm devoted almost exclusively to the representation of persons
seeking Social Security benefits. Disability Group, Inc. is a competing law firm involved in the pursuit of the same clients. In 2006, Disability Group purchased the words "Binder and Binder" as a Google AdWord. As a result, some Google searches for the law firm Binder and Binder resulted in having Disability Group appear high in the sponsored search rankings. Binder and Binder had registered trademarks for the use of their name. Binder and Binder brought suit against Disability Group alleging: (i) infringement of a registered trademark; (ii) false advertising; and (iii) unfair competition.
On January 25, 2011, the U.S. District Court for the Central District of California (Case No. 07-2760-GHK), found that the actions of Disability Group did in fact constitute trademark infringement.
The Court found that: (i) there was no dispute that the defendants used plaintiff's mark in their GoogleAd campaign; (ii) that plaintiffs were, in fact, the owners of the mark despite some reorganization from partnership to LLP and several assignments of the mark; (iii) according to the Sleekcraft test, there was a strong likelihood of confusion and also found actual confusion; and (iv) plaintiffs had not given consent to such use of their mark.
Using testimony about plaintiffs average profit on a case and the number of clicks on defendant's site and some other algorithms, the Court assessed damages for lost profits in the amount of $146,117.60.
The plaintiffs also requested an award for corrective advertising. The standard for this is to allow the plaintiff to recover the cost of advertising undertaken to restore the value that plaintiff's trademark has lost due to the infringement. While the Court was of the opinion that defendant's actions would have given rise to this kind of damages, they declined to award any such damages because of the limited period of infringements (a few months) and the passage 
of substantial time since the infringement (2006).
The Court then found that the infringement was willful and under the treble damages provisions of the Lanham Act "enhanced" the damages to double the damages for lost profits.
The Court also found that attorney's fees and costs should be awarded to plaintiff because the infringement was "exceptional", i.e. willful, deliberate, knowing or malicious. The Court declined to award punitive damages because punitives are not available under the Lanham Act and the Court found the double damages already awarded to be sufficient.
Defendants raised several defenses including one that said basically if the plaintiffs had just put the trademark notice (the R in the circle) on their name, Google would not have let the defendants do what they wanted to do and we wouldn't have had this problem. Basically, "if you had told on me, mommy wouldn't have let me misbehave". The Court didn't give this much weight.
So, when lawyers litigate with each other, the rest of the world just bemusedly views it as karmic justice but this case provides good instruction about the use of trademarks as search terms. Other cases may not be this blatant, but look for other litigation on this emerging area of the law.
