{"id":461,"date":"2011-03-07T17:34:04","date_gmt":"2011-03-08T01:34:04","guid":{"rendered":"http:\/\/ipmetrics.net\/blog\/?p=461"},"modified":"2011-03-07T17:34:04","modified_gmt":"2011-03-08T01:34:04","slug":"deceptive-advertising-in-the-age-of-google-damages-awarded","status":"publish","type":"post","link":"https:\/\/www.ipmetrics.net\/blog\/litigation\/case-law\/deceptive-advertising-in-the-age-of-google-damages-awarded\/","title":{"rendered":"Deceptive Advertising in the Age of Google: Damages Awarded"},"content":{"rendered":"

Earlier in the year, one of the latest deceptive advertising cases dealing with the allegedly misleading use of competitors’ trademarks as keywords triggering AdWords<\/em> advertisements on Google search results pages, ended with a rare win for the plaintiffs, a recovery of nearly $300,000 in damages, but no corrective advertising award. The case in question is Henry Binder, et al. v. Disability Group, Inc.<\/em> (CV 07-2760 US District Court \u2013 Central District California), in which the where the Memorandum of Findings of Fact and Conclusions of Law was filed on January 25, 2011.<\/p>\n

Facts in the Case<\/h3>\n

The plaintiffs operate several related businesses under the “Binder & Binder” umbrella brand in the field of Social Security disability advocacy services in several states. Defendants operate a competing service and during 2006 used Plaintiffs’ the keyword “Binder and Binder” in an AdWords campaign.<\/p>\n

Liability Conclusions<\/h3>\n

Judge King first concluded that Plaintiffs had valid ownership of the “Binder & Binder” and “Binder and Binder” trademarks, despite challenges to the chain of title of the federal registrations.<\/p>\n

Applying the so-called Internet Trilogy of the\u00a0Sleekcraft Factors<\/em> (similarity of the marks; relatedness of products; simultaneous use of web-based marketing), the conclusion was a strong likelihood of confusion, supported by actual instances of confusion in the marketplace, and deceptive responses to potential customers’ responses to the ads. \u00a0Further review of the evidence, considering the claim of false advertising, the Judge concluded the Defendants were liable for this second federal claim and the (CA) state claim of unfair competition.<\/p>\n

Damages Assessment<\/h3>\n

The analysis in this regard was based on the Plaintiffs’ retention rate of visitors clicking through their own advertising links (18.78%) applied to the number of clients captured on Defendants’ website via the clicks on the infringing ads during the eight\u2013month damages period (188), and valued at the Plaintiffs’ average per-case revenue ($3,576.93). \u00a0Thus lost revenue was estimated at $125,192.55 (truncating the incremental cases to whole numbers).<\/p>\n

To determine the damages that should be recovered, expert witness testimony was accepted supporting a 5% incremental cost attributable to the additional case load (35 cases), thus resulting in $118,932.92 in Lost Profits.<\/p>\n

Following a similar logic, lost profits on a second website operated by the Defendants (absent similarly detailed information) were estimated at an additional $27,184.68 on 8 incremental cases.<\/p>\n

No (prospective) corrective advertising damages were awarded since an amount based on an arbitrary percentage of Defendants’ advertising budget would not be sufficiently connected with actually correcting any mistaken perceptions created during the infringement period (nearly five years ago).<\/p>\n

Finally, since the evidence and testimony\u00a0presented\u00a0regarding willfulness was clearly convincing, the Judge awarded enhanced damages by doubling the Lost Profits amount to $292,235.20 and awarding reasonable attorneys’ fees and costs.<\/p>\n

Implications<\/h3>\n

In similar cases, a successful defense had been to point out that the use of certain terms as AdWord keywords did not qualify as their use as trademarks<\/em> because these keywords are not designating the source of any specific goods or services. \u00a0The salient difference in this case is the\u00a0willful\u00a0deceptiveness of the ads posing, in effect, as Plaintiffs’\u00a0affiliates. Although the damages are not extraordinary, doubling damages should be a real deterrent for more\u00a0impact-full\u00a0infringements. The transient nature of search advertising, finally, is a significant factor against the conventional support for corrective advertising damages.<\/p>\n","protected":false},"excerpt":{"rendered":"

Earlier in the year, one of the latest deceptive advertising cases dealing with the allegedly misleading use of competitors’ trademarks as keywords triggering AdWords advertisements on Google search results pages, ended with a rare win for the plaintiffs and a recovery of double their estimated Lost Profits.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,6,21],"tags":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2xROl-7r","_links":{"self":[{"href":"https:\/\/www.ipmetrics.net\/blog\/wp-json\/wp\/v2\/posts\/461"}],"collection":[{"href":"https:\/\/www.ipmetrics.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.ipmetrics.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.ipmetrics.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.ipmetrics.net\/blog\/wp-json\/wp\/v2\/comments?post=461"}],"version-history":[{"count":0,"href":"https:\/\/www.ipmetrics.net\/blog\/wp-json\/wp\/v2\/posts\/461\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.ipmetrics.net\/blog\/wp-json\/wp\/v2\/media?parent=461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.ipmetrics.net\/blog\/wp-json\/wp\/v2\/categories?post=461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.ipmetrics.net\/blog\/wp-json\/wp\/v2\/tags?post=461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}