Do Consumers Understand Google Results?

A federal appeals court grappled March 5 with whether average consumers know the difference between the ads and the organic search results that appear on Google. Arguing before the US Court of Appeals for the 2nd Circuit, 1-800 Contacts — which is seeking to reverse a Federal Trade Commission decision that its trademark agreements violated antitrust law — contended that they don’t understand. Federal law allows a company to protect its trademark if use of the trademarked term could confuse consumers. The online contact lens retailer argued that consumers would be confused if they search for “1-800 Contacts” on Google or Bing but instead see ads for other companies. But two of the three judges on the panel weren’t so sure. “Even an old guy who is old enough to remember Kodak and film knows the first four things you get on Google, which are labeled ‘ad,’ you should disregard and move down to the next thing,” said Circuit Judge Peter W. Hall, a George W. Bush appointee. Circuit Judge Gerard Lynch was also skeptical. “Is that the standard, everyone has to know that? Twenty years from now when our kids are up there and doing this stuff, we’re not even going to be having this conversation,” he said. FTC attorney Imad Dean Abyad told the appeals court that 1-800 Contacts’ agreements with rivals were the same as an offline agreement to divide up market. “1-800 is claiming that digital [ad] space as its own exclusive territory and has agreed with its rivals that they would not advertise in that territory,” he said. Abyad also said that 1-800 Contacts’ agreements were overly broad because they barred rivals from using the company’s name in any kind of ad, even a comparative one. Courts have consistently found that comparative ads aren’t trademark violations. “This is not about protecting trademarks,” he said. “This is about 1-800 protecting its much higher price.”