GRSM California Team Secures Favorable Settlement in Counterfeit Case Involving Google Search Terms

December 2023

Gordon Rees Scully Mansukhani Los Angeles Partner Reid E. Dammann and San Francisco Partner Quyen Thi Le effectively achieved a favorable settlement for their client, a modular building manufacturer.  

The legal dispute unfolded in the Central District of California, where the plaintiff, a competitor in the modular building sector, lodged a federal trademark infringement complaint. The allegations included claims of counterfeit practices and federal unfair competition stemming from the client's purported utilization of the plaintiff's trademark as a search term in their Google Dynamic Ads campaign.

The asserted period of infringement was confined to a four-month duration, commencing from the plaintiff's discovery of the alleged trademark use in Google searches until the moment GRSM’s client rectified the issue by adding the trademarked term to its list of negative keywords. This corrective action was taken as soon as the firm’s client realized that the trademarked term had inadvertently been included in a list of words for its Google ads campaign. Additionally, the team’s client filed a counterclaim asserting that its unintentional use of a similar term did not infringe on the plaintiff's trademarked term, which included the use of a hyphen. Notably, despite having a similar mark in its Google ads, the client's online advertisement clearly displayed its website and linked to a prominently featured representation of its own trademark.

The key factual issues in question revolved around whether GRSM's client's use of a similar mark was intentional and whether this could demonstrate a likelihood of confusion. The GRSM team was fully prepared for trial, armed with undisputed evidence demonstrating that the plaintiff could not meet its burden to show a likelihood of confusion. This was substantiated by the fact that the plaintiff suffered no actual damages, did not conduct consumer surveys or engage with consumers, and failed to provide evidence that individuals clicking on the Google ads translated into sales.

During the mediation process, the GRSM team adopted a resolute and professional stance, ultimately leading to a successful resolution of the matter. This outcome spared the client the financial burden of a trial scheduled for next month.