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Is Search Marketing Illegal?

American Airlines has decided to sue Google for trademark infringement. The suit is based on Google’s display of sponsored ads in their search area on competitive terms such as:

  • American Airlines
  • Free AA Travel Offers
  • americanairlines.com
  • American Air Lines

AA says that Google is infringing on their trademark name by profiting from click ads on the site. Currently, when you search for American Airlines you will see one ad by AA and three more ads by competitors. The problem, as AA sees it, is that Google is selling their trademark name to make money.

What Started It All?
I’m guessing that this all started when a senior marketing manager at American Airlines got the AdWords invoice from Google. She looked it over and realized that they were paying thousands of dollars to advertise for their own brand. After a quick call to accounting, she confirmed that they had been paying for years and that the rates had been going up. With this information, she ran a quick ROI calculation and figured that, if they won, the legal cost would be more than covered in the long run.

So here they are, trying to make online advertising illegal.

To The Extreme
If you take this lawsuit one step further, you can see how difficult it will be for American Airlines to win. Google makes a lot of it’s money from click ads. The reason they make this money is because people use Google to search for information – that means that each visitor (on average) makes the company money. What happens if I search for a company brand name and other advertisers, bloggers, articles and niche marketers show up in the search results? Will Steve Jobs sue Google if I take the top spot in How to download great music on your iPod?

What Era Are We In?
This looks like a case of an Industrial era company (American Airlines) challenging an Information age system (Google AdWords). Search ads like AdWords and Yahoo Search Marketing are simply new advertising mediums available in the market. Although these ads are different than traditional methods, they need to be integrated into a company marketing strategy and used properly. This means that you compete with those around you based on your brand strength and market share.

Should it be illegal for a travel agent to sell Delta flights if they advertised American Airlines in the paper that day? It looks like American Airlines thinks so.

I’m going to be interested to find out how this lawsuit pans out. With the cash AA has, this may be a long battle and define what exactly is for sale on the web.

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