A (second) tale of CITIS

As if the uproar over Citigroup’s lawsuit against All Citi Pawn (blogged here) weren’t enough today, this article from Slate describes Citi’s decision to go forward with a $400 million naming rights plan of the New York Mets new baseball stadium.  The author of the article summarizes the benefits of the plan, despite Citi’s current lack of capital, this way:

In order for Citi to weather the storm, recover, and pay back taxpayers (and insulate them from further losses), the company must invest for both the short- and long-term. For companies in highly competitive consumer markets, marketing and advertising are essential, entirely justifiable expenses. Companies—even companies getting bailed out by the feds—need to attract customers and to build their brand image. It’s difficult to measure the value of any specific campaign or ad. But there’s reason to think that for this company, at this stadium, in this location, a naming-rights deal might not be such a bad long-term move.

[…]

Of course, people who read about games at Citi Field on ESPN.com won’t be learning much about Citi’s mortgage rates. But naming rights, especially if they endure, can perform another vital function for brands. It can help make them part of the vernacular. The greatest desire of any marketer is for her product’s name to work its way into conversations. When I was growing up, it was common to say, “I want a Coke” when you were referring to any kind of soda. People ask for a Kleenex when they mean a tissue, say they’re going to Xerox a document even if they’re using a Ricoh copier, and speak of Googling when they refer to an Internet search. Stadium naming rights can help products and brands gain that sort of status. Since 1926, baseball fans on the north side of Chicago have spoken about going to games at Wrigley Field. Does that make fans more likely to buy Wrigley’s gum products? It can’t hurt. “Meet me at Citi,” doesn’t quite have the same ring as “Meet me at Shea.” But after 20 or 30 years, it might.

Professor Rebecca Tushnet notes the serious problem with the final paragraph, which essentially encourages “genericism” of trademarks (the development of language such that a term that once was a trademark suddenly becomes a synonym for the good or services that the mark once described).  Her post is titled “This is why I don’t believe in most forms of genericism,” and she writes:

These days, consumer understanding of branding allows Google, Kleenex and Xerox to preserve their marks while also being conversational terms for their categories. [The quote] is crazy talk from black-letter trademark law’s perspective, but that’s because the black-letter law doesn’t reflect current reality.

I certainly agree with the theoretical underpinnings of Professor Tushnet’s statement–that consumers can understand the difference between GOOGLE for “searching the internet via a computer interface” and engaging in Googling to find information, between asking someone for a kleenex to wipe a runny nose and getting KLEENEX brand tissues at a store; between purchasing a XEROX brand business machine and xeroxing a copy of something.

But the principle of genericism of trademark has to remain valid, at some level.  There comes a time where the public recognizes the trademark only as the thing, not as a particular manufacturer of the thing.  And it becomes unfair to prohibit the competitor making the thing from referring to the thing just like the rest of consumers.  If I wanted to start a business today, shouldn’t I be able to call my product KAISER escalators? Not KAISER brand people moving electric stairs that move people up a floor or more?  At one time, ESCALATOR was a brand name for moving stairs, but eventually consumers came to understand all brands of moving stairs to be escalators. While claims of trademark genericism are probably overasserted, it’s not a concept that should be abandoned. (To be honest, I’m surprised that Coca-Cola has survived a genericism claim, at least in the South. My idea for Pepsi’s new marketing campaign in the South? “Wanna coke? Wanna Pepsi!”  In sum, the issue shouldn’t be whether “rogue” consumers have begun to use your trademark as a noun, or worse, as a verb, but whether the use has become so pervasive as a synonym for the goods and services that it would be unfair to prevent competitors from using the same term to describe their goods and services.

If anyone else has comments, I’d be happy to consider them.

(Image from Yewenyi, via Flickr, used pursuant to the Creative Commons limited rights license)

Sacrebleu! A blow to Google in Europe

No liberty, egality, and fraternity for Google in Paris this week.

According to this report, Google has suffered a loss in Paris.

A French court has fined search engine giant Google €350,000 and said that its search advertising business has infringed on two companies’ trade marks.

[…]

Tribunal de Grande Instance de Paris has ordered Google to pay €200,000 to Voyageurs du Monde (Travellers of the World) and €150,000 to Terres d’Aventure (Lands of Adventure), despite the judge saying that the commercial harm to the companies was marginal.

[…]

The Court said that though the commercial harm was marginal it had denied the companies some customers by directing them to other sites, French newspaper Le Figaro reported.

Google said that it has already appealed the case to the Paris Court of Appeal.

[…]

Last week a German court asked the European Union’s top court the European Court of Justice (ECJ) to rule on two similar disputes. It has asked the ECJ to rule on whether or not the purchase of a trade marked term as a keyword constitutes use of that trade mark.

Google’s AdWords program allows virtually anyone to purchase, as a “trigger” keyword for advertising, any word.  Their U.S. policy (which now apparently has been expanded worldwide) states only that trademark owners may demand takedown of any advertisement in which a competitor uses the owner’s trademark in the body of the advertisement shown to the web surfer only. Google claims that the “internal” use of purchasing a word to trigger an ad to appear is not a “use in commerce” covered by the Lanham Act.  There can be no consumer confusion, Google argues, because the ad clearly demonstrates that the goods and services derive from a different source, and/or provide the customer alternative products to the one that they may have been searching for (no different from, say, grocery stores selling shelf space for competitors products next to the “leading brand”).  I tend to agree and believe that, at least under U.S. law, no trademark infringement occurs if Google sells a trademark as an AdWord, so long as the advertisement itself does not contain the trademark term. Google’s now becoming aggressive in Europe, attempting to equalize its policies across the pond with those in the U.S.  We’ll keep our eyes posted.

Google AdWords fight in Germany moves to EU court

According to this article, Germany’s Federal Court of Justice has “sent” a case to the European Court of Justice to seek clarification [query: Is this like a federal court certifying a question to a state supreme court in the U.S.?] of whether the purchase of a competitor’s trademark as a Google AdWord constitutes “use” of a trademark under “EU trademark rules.”

Google's AdWords program is under fire in Europe

This issue has been hotly contested in the United States, because if the purchase of another’s trademark as a Google AdWord is not a “use in commerce,” (at least as long as the competitor’s trademark did not appear in the text of the Google ad), then that effectively forecloses trademark liability for the action.  Cases can be dismissed early on in the proceedings.  Google’s revenue stream is left intact.  One circuit court has bought that argument.  In the Second Circuit (which includes New York) courts have found that the mere purchase of the competitor’s trademark as a Google AdWord does not constitute a “use in commerce.” Courts in the rest of the country, however, have not been so gracious, and at least allow the cases to continue.  For example at least one federal district court in Minnesota (pdf) indicated that, based upon all of the circumstances, purchase of a competitor’s trademark as an AdWord could be an infringing use.

Google, perhaps to avoid personal liability, as implemented a DMCA-like “notice and takedown” procedure. Its US, UK, Ireland, and Canada policy states that if the competitor’s trademark appears in the header or body text of a competitor’s ad, the competitor may contact Google and the trademark term will be removed from the ad.  This policy tracks with a decision by a Court in the Eastern District of Virginia that determined that trademark “use in commerce” could exist if a competitor used a trademark in body text or headers of advertisements seen by consumers, but that “use in commerce” could not exist if the trademark merely triggered the ad to be shown.  In Europe, if a trademark owner discovers that a competitor has purchased Google AdWords containing the trademark, Google will disable those keywords.  Perhaps this suit tests whether Google can implement a US-style takedown.