Daniel J. Gervais (Vanderbilt University – Law School), Martin L. Holmes (Parker Poe Adams & Bernstein L.L.P.), Paul W. Kruse (Bone McAllester Norton PLLC), Glenn Perdue (Kraft Analytics, LLC) and Caprice L. Roberts (Savannah Law School) have published “Is Profiting from the Online Use of Another’s Property Unjust? The Use of Brand Names as Paid Search Keywords”, IDEA: The IP Law Review, Vol. 53, p. 131, 2013. The abstract reads:
This article begins with a basic question: Is Google’s profiting from the use of another’s brand in its AdWords program unjust? Answering that question will profoundly affect the online economy. Indeed, many services, including most of those offered by Google, are funded by advertising revenue, a large portion of which comes from the sale of third-party brand names. Academic articles and court opinions thus far have applied trademark law when evaluating liability. The consensus view, including the Fourth Circuit’s recent Rosetta Stone opinion, finds no infringement by Google — third-party purchasers of AdWords may be liable for dilution or infringement claims — even though Google profits from every sale while brand owners often suffer a prejudice from the sale and use of their brand name. If one agrees that this misuse is a wrong that must be remedied, are there other avenues to explore beyond the strictures of trademark law? The law usually takes a dim view of one who uses a third party’s property without authorization and yet in the case of AdWords, it has not — at least not up to now.
This inconsistency arises from a failure to reach beyond the limits of trademark law in search of a remedy. After evaluating several legal and equitable bases for a remedy and surveying the preemption question as it interfaces with trademark law, the authors advance unjust enrichment as the best legal basis of liability and remedy for the unauthorized, profitable and therefore wrongful use of another’s property. Such a remedy would impose reasonable limits on the use of brand names in AdWords.
A copy of the paper is available for download via SSRN here.