Google sued again

FirePond (FPX), a US based software company filed a class-action suit against Google in federal court in Texas. Reason being, a search for their company name on Google shows their company’s site as the top search listing but just above it, Google shows ads of competitors who paid Google to display their marketing messages whenever someone searched for FirePond, a registered trademark.

FPX sued Google saying that Google had infringed on its trademark and is challenging Google’s policies on behalf of all trademark owners in the state.

Google policy on such misuse of trademarks has irked many other companies. In the past, likes of American Airlines and Geico had filed suits against Google but was settled.

Inspite of all recent episodes Google this month expanded its policy of allowing anyone to buy someone else’s trademark as a trigger for an ad to more than 190 new countries. Google acknowledged that some advertisers may be upset by the new policy but feels such a change would result in ads that are more relevant to users. For instance, someone who types “Mahindra” in Google may see not just the corporate site of Mahindra appear on top but also details of all sites who offer review of Mahindra products and also the dealers who sell Mahindra products. This in effect is bound to help the company (Mahindra in this case).

For Google their Ad business is bread and butter, its the only cash cow for company and any relaxation in policies would result in huge drop in revenues.

The buzz is Google’s new policy is likely to raise the prices that advertisers pay their company to appear higher on searches. Since Google sells it search advertisement through an auction system, it is bound to increase the bid value from rival companies for a trademark. However, advertisers complain that this new policy would compel them to pay Google more for their own ads to appear ahead of their competitors.