Suit Against Google, Overture, Kanoodle Moves Forward

A trademark infringement lawsuit against Overture, Google, and Kanoodle will move forward, after a judge rejected motions to dismiss the suit brought by Pets Warehouse’s Robert Novak.

In a decision in the U.S. District Court in the Eastern District of New York, Judge Denis Hurley denied several motions by plaintiffs to dismiss the case for lack of jurisdiction. The suit alleges the defendants infringed on Pets Warehouse’s (PW) trademarks by selling its name as a keyword to their paid placement advertisers. It also accuses them of unfair competition, trademark dilution, deceptive practices, and interference with prospective business advantage.

“Not withstanding PW’s exclusive right to control the use of its famous Pets Warehouse mark, Kanoodle, Google and Overture actively assists [sic] competitors of PW in what is best described as a ‘bait and switch’ of PW’s actual and potential customers,” the suit says. Novak’s suit went on to explain that consumers clicking on results on the sites might end up buying from competitors, perhaps without even realizing they aren’t on the PW Web site. (Novak has since declared bankruptcy and lost the original PetsWarehouse.com URL where his online store had resided.)

The claims echo those under contention in the suit filed by American Blind and Wallpaper Factory against Google. The dispute is also similar to a long-running legal battle in which Playboy sued Netscape, now a subsidiary of America Online, for selling trademarked keywords tied to banner advertising. Playboy and AOL settled that suit early this year.

None of those cases sheds much light on the legality of the practice of selling trademarked names as keywords, which means Novak’s suit against Google, Overture and Kanoodle stands as good a chance as any of being precedent-setting.

In his ruling, Hurley granted Google’s motion to dismiss a claim of “breach of contract and tortuous interference with contractual relations and prospective business relations.” Novak had accused Google of refusing to take down certain discussions of PetsWarehouse.com on its Google Groups site.

Novak wants the judge to enjoin the defendants from selling sponsored links tied to the Pets Warehouse name. He’s also looking for $5 million in compensatory damages, and $1 million in punitive damages, along with court costs.

Neither Google nor Novak responded to inquiries by press time. Overture declined to comment.