History of Google company 11

Litigation

Four months after Google "washed" Wall Street with its extraordinary IPO, the company once again attacked the eternal values of the American business world. This time the venue was the federal district court in Alexandria (Virginia), a town on the Potomac River, a short drive from Washington. On the fifth floor of the stately building, known in the legal profession for being considered quickly and without delay, the district judge Leoni M. Brinkem presided. It was here that the sensational case of Zacharias Moussaoui, the only one whom the US authorities charged with involvement in the September 11 attacks, was heard. And on December 13, 2004, exactly at 10:00, the bailiff said monotonously: “Get up, the court is coming,” and the judge slammed a hammer on the table, calling the parties to order.The case was Government Employees Insurance Co. (Geico) v. Google Inc.

In terms of scale and drama, this case, of course, was inferior to the case of Moussaoui, during the hearing of which the defendant, who refused the services of lawyers, fiercely fought Judge Brinkam, testing her patience for many days. But for members of Google’s extensive affiliate network - thousands of people around the world, whose wealth directly depended on the growth of the company - it was of great importance.

Geico and Google had very little in common. Geico, headquartered on the border of Washington and Maryland, was one of the richest, most conservative and most reputable American auto insurance companies. The target group for Geico, founded in 1936 by Leo and Lilian Goodwin, were government employees, military personnel and wealthy car owners who, according to statistics, were less likely to be involved in traffic accidents than other categories of the population, which allowed the company to offer cheaper insurance policies The insurance giant has long been one of the main investment targets for billionaire Warren Buffet, and in the mid-1990s he became the sole owner of the company. No wonder Geico represented Arnold & in court that day.Porter is the oldest law firm.

Google, the company with the California “registration”, quickly, creatively and aggressively developed and just celebrated its sixth anniversary. Such risky steps that she took, Geico to take - and even to insure - would never. The main Google attorney in court was Michael X. Page (not a relative of Larry), a native of San Francisco. There he gained a reputation as a lawyer, who prefers to represent the interests of the party, which initially has little chance of winning a case, and received a lot of approving reviews for the skillful and successful conduct of the struggle (in the courtroom, of course) with film companies and recording studios for the right to exchange files between computer users.

Geico filed a lawsuit against Google on the issue of which Google’s small but important difference from its main rival Yahoo! Is made. Geico objected to the fact that Google earns money by placing advertisements to its competitors insurers, which appeared when searching for words that were registered Geico trademarks. So, any other car insurance company, having become the winner of the auction for the word “Geico” or the phrase “Geico Direct”, could place its advertisement on Google.com.

Therefore, Geico believed that because of the approach practiced by Google, she suffers losses. The insurance company said that this approach creates confusion in the minds of consumers, because those who enter the word "Geico" into the search box receive ads from competitors in return. Geico regarded this as a clear misrepresentation of people, unfair policies and the violation of its legitimate right to protect its own trademarks registered in the US Patent Office. It also meant that other insurance companies “drive” on Geico’s huge advertising budget: the insurance giant spent millions of dollars promoting the Geico and Geico Direct brands in the media, while its competitors “took” customers away from it frets his brands. Yahoo!was not as aggressive as Google, and Geico dropped the lawsuit against Yahoo! learning that the company has decided not to post such promotional offers in the future. If they did appear, Yahoo! cleaned them on demand.

Google’s trademark policy, once quite tough, has become more liberal on the eve of an IPO. As a result, there was talk that the company did this for the sake of increasing revenues and growth rates, which ultimately would allow it to sell its shares at a higher price. Before Google, like Yahoo! did not advertise, "tied" to registered trademarks. If any advertising proposal still leaked out and the owner of the brand expressed his dissatisfaction, Google immediately removed it. Now, Google has changed its policy, explaining that it does not want to interfere in the free exchange of ideas, from which users benefit: they may want to receive information about products and pricing of several companies. For example, typing the word "Geico" in the query string, the user saw not only the promotional offers of competitors,but also links to web pages where several insurance companies were posted at once.

In its IPO application filed with the Securities and Exchange Commission, Google noted that it had changed its policy “in order to provide users with more practical advertisements,” and acknowledged that this change caused a number of risks. “As a result of a change in our trademark policy, claims of violation of trademark rights may be brought against us. Negative results of consideration of such lawsuits can encourage or even make us change the current practice, which can lead to the loss of this income item. ”

Google has already passed the defendant in several lawsuits. The main focus of the media was on its legal battle with the American Blind and Wallpaper Factory, which stated that due to unfair Google practices, it might soon be on the verge of bankruptcy. In the US, none of the cases that Google acted as a defendant has yet been decided, but in France and in several other European countries, Google has lost several lawsuits, including a process against Louis Vuitton, a manufacturer of luxury goods. (In European countries, the law governing advertising is stricter than in the United States.)

In some respects, the case that Judge Brinkham was to consider was as old as the advertisement itself. In the US, the law allowed the placement of comparative or competitive advertising in accordance with the “fair use” doctrine. It allowed advertisers to compare prices and quality of products with competitors' products and, on the basis of this, make statements, provided that such statements are true. But at the same time, Judge Brinkema could well accept the arguments of the plaintiff and thereby create a legal precedent. Since the Internet and search engines are relatively young advertising platforms, there are no precedents or laws that could be relied on. In this regard, the case was in the “area of innovation” - just where Google, accustomed to creating precedents in technology, business, culture, financial transactions,and now in the law, I felt like a fish in water.

For Getco, this trial was no more than a duel because of one particular advertising channel, a fight that a regular company could not afford. For Google, it became a battle in which it needed to defend the principles of its policy.

Opening the meeting, Judge Brinkema announced that she had familiarized herself with all the materials of the case, has a certain idea about the companies and the issues on which they did not reach an agreement, and expects to conduct the case quickly. Google at the pre-trial stage made an attempt to avoid a trial by filing a motion to reject the claim, but after examining all the main issues, Brinkham decided that the information provided by the plaintiff provided sufficient grounds for hearing the case in court.

The first word was received by Charles Ossola, co-owner of the law firm Arnold & Porter, who acted as the main attorney for Geico. He explained why the plaintiff believes that the defendant is violating his right to trademark. Over the past five years, Geico has spent more than $ 5 billion on brand promotion, and now she has been forced to either bid on the name that was her property anyway, or accept the fact that people who will enter the word into Google’s search box “Geico” will buy auto insurance from a competitor company whose advertising will appear in response to such a request. According to a study conducted by Geico, most people look at the rates of only one insurance company, after which they buy insurance from her. This meant that competitors were acquiring customers at the expense of Geico.

“Computer users are looking for the Geico website and are interested in its insurance rates, but ultimately acquire an insurance product of a company that has nothing to do with Geico,” Ossola said. “Geico is pushing for a decision that Google’s placement of advertisements tied to our brand generates a chance of confusion.

“This is not true,” said Google Page’s chief attorney, Michael Page, in his speech. Turning to the judge, Page said that Geico’s advocates want to draw an artificial border between the Internet and traditional media.

- Geico wants to convince us that the Internet is different from other media. However, she suggests that when people type “Geico” in the Google query string, they only want to get a link to the Geico website. This assumption is incorrect.

Page noted that in this case, the argument of entangling consumers is groundless, because Google clearly separates advertisements from search results, placing them behind a blue vertical line. He also stated that Google, like a magazine or newspaper, is not responsible for the content of promotional offers.

- Google is only an intermediary. The text of the advertisement is the advertiser. The arguments voiced by Geico may confirm the validity of the claims against the advertiser, but not against Google.

As usual in such cases, there were witnesses on both sides: experts, employees and others willing to testify in their favor. The lawyers of the parties had the opportunity to interrogate the witnesses of the opposing party. On the third day of the trial, having smashed the chief expert Geico and pointing out the weak points in the study referred to by Ossola, Michael Page rose and made a proposal to complete the hearing.

- If you remember, in my first speech in this room, I stated that the court would be able to make a decision on this case before hearing testimony for damages. Then my words caused laughter in the hall, but I spoke quite seriously. Now, when the court heard all the arguments of the plaintiff, we believe that you, your honor, can decide in favor of Google, guided by the letter of the law, ”said Page. - Selling car insurance directly to customers and not allowing those to receive information from other insurers was an integral element of Geico’s strategy. Such a strategy is absolutely legitimate. In combination with a well-thought-out marketing policy, it gave just a great result. This is their right, but Google cannot be held responsible for the confusion that is a natural part of their business strategy.The testimony of the plaintiff's witnesses confirms that the mere use of trademarks as words (phrases) to “bind” advertisements does not create misunderstandings. And since the evidence must be provided to the opposing party, there is no need to continue hearing the case.

Page noted that Google’s policies and technologies do not allow competitors to use the word “Geico” in the headline and text of an ad, but at the same time he acknowledged that from time to time such promotional offers still leak onto the results pages.

- Google zealously observes this principle. The inability to ensure its absolute observance does not give grounds for bringing the company to responsibility. To do this, Geico will need to prove that Google has encouraged actions that are contrary to the law on trademarks, or aided in committing such actions. Such facts were not presented to the court, because Google did not condone actions violating the right to trademark, and did not encourage such actions. On the contrary, we were the first of the companies that specialize in searching for information on the Internet, have developed a policy regarding trademarks - because it seemed like a logical step and because it made sense from a business point of view.

Page also noted that Google serves different groups of customers and, accordingly, should take into account the interests of each of them. Brand owners are our advertisers, and consumers are our search engine users. Therefore, we try to maintain a reasonable balance between the protection of trademark rights, on the one hand, and providing users with the most complete and relevant information, on the other. We believe that our trademark policy is the best way to ensure such a balance: it is not very good, but it does not protect the rights to a trademark well enough. Therefore, we ask the court, guided by the letter of the law, to decide in favor of Google.

After the speech of Page in the hall there was a deathly silence. Now the main lawyer of Geico, Charles Ossole, had to try to find a strong case to refute the words of his opponent. Page seemed the embodiment of Google itself - an enterprising, energetic, step by step seeking his own. But the old saying of lawyers, which says that “if facts are on your side, push facts, and if you have a law, push laws”, has not yet lost its relevance. Ossola rose with the intention of pushing the law - for he had to do it, but he spoke confusedly and focused only on the facts, since there was nothing else in his arsenal.

Launched into a protracted, confusing description of an allegedly unlawful practice, during which those present in the hall at times had the feeling that the defendant in the case was not Google, but Geico herself, Ossola said:

- We believe that the presented facts clearly indicate that there is a possibility of confusion in connection with the use of the word “Geico” in the text, and in this case, given that Geico is a trademark associated with insurance, there are sufficient grounds for , to establish the likelihood of confusion in relation to those sponsored links, the text of which does not contain the word "Geico".

After that, he said: “Thank you, your honor” - and sat down.

Judge Brinkem, who was closely watching everything that happened, did not delay with the verdict.

Indeed, even at the initial stage of the project, the scale was impressive. The agreements made by Google provided for the digitization of all seven million books of the University of Michigan library; over a million nineteenth-century editions of the Bodleian Library; 40 thousand - Harvard libraries; 12 thousand - the New York Public Library and the unspecified number of books at the Stanford University Library. If libraries that have agreed only to the pilot program express a desire to digitize their entire collection, then Google’s database will have over 50 million full texts of text after the scanning process is completed (approximately ten years from now). For comparison, the Google index in 1998, when Brin and Page launched their search engine, included 25 million web pages.

However, not everyone considered the book digitization project a good start. After announcing its launch, a number of publishers, writers, and library staff who saw Google’s intent as a serious threat attempted to tarnish it. In his article published in the Los Angeles Times, Michael Gorman, at the time the newly elected president of the American Library Association, did not appreciate the efforts of the “boogie boys”. “Huge databases with digitized books are expensive and useless costs,” he wrote, “which are based on a strange notion that for the first time in history one method of transmitting information (electronic) will supplant and destroy all previously existing ones. The latest version of Google's eyewash will no doubt be on a par with such failed projects as organizing trips to work on a route helicopter and transferring the entire Library of Congress onto a roll of microfilm that fits in an ordinary diplomat. ”

In France, the new Google project was regarded as America’s playing with “cultural” muscles. So, Jean-Noel Jannay, director of the National Library of France, wrote in the newspaper Le Mond that he harbors "the threat of America's total domination in the field of shaping the world view of future generations." “I would not want only the books selected by the United States to tell about the French Revolution,” he noted.