On February 15, 2022, the Georgia Supreme Court held that the sale of one’s trade name in a keyword advertising service is not the theft of another’s trade name. In Edible IP, LLC v. Google, LLC, 313 Ga. 305, 2022 Ga. Lexis 29, 2022 WL451876 (Ga. 2022), Edible IP, a company that sells edible floral shaped arrangements made out of fruit, sued Google, an internet search company, for using Edible’s EDIBLE ARRANGEMENTS trade name as part of its auctioned keyword advertising. Google’s keyword advertising allows an advertiser to purchase keywords such that when a user searches for them, Google places the advertiser’s ads in more favorable positions on its famous internet search engine results. Suffice it to say, Edible IP said it never gave Google permission to use its name and, when it found out about Google’s use of its trade name in the program, sued Google alleging that while Google did not engage in trademark infringement, Google engaged in the theft of its trade name, conversion, money had and received for the profits derived from the sale of the auctioned keyword and violated the Georgia Civil Racketeer Influenced and Corrupt Organizations Act (“RICO”).
When the trial court determined that Edible IP failed to state any claim and dismissed its complaint, Edible IP appealed and the Georgia Court of Appeals agreed with the trial court. Consequently, Edible IP appealed to Georgia’s highest court, the Georgia Supreme Court, which ultimately agreed with dismissal of all of Edible IP’s claims.
Particularly, the Georgia Supreme Court had to analyze whether Google’s use of the EDIBLE ARRANGEMENTS trade name in the keyword advertising constituted theft by determining what property rights were available to Edible IP under Georgia state law. In analyzing what rights were available, the Georgia Supreme Court noted that under the Georgia statutory schemes concerning trademarks and trade names, as well as Federal trademark law and the common law, that the law largely concerned itself with protecting trade names against the familiar trademark infringement concept of a likelihood of confusion, something that Edible IP expressly disclaimed in its complaint. Moreover, it recited that comparative advertising and referencing another’s trade name is proper in trademark law provided that it does not confuse consumers and is not deceptive. So combined, the Georgia Supreme Court held that it was proper to dismiss Edible IP’s claim for theft as no valid property right had been stolen given that the only property rights to the trade name that could be stolen were those that arose from the concept of a likelihood of confusion.
In analyzing the conversion claim, the Georgia Supreme Court observed that Ga. Code Ann. § 51-10-1 states that “[t]he owner of personalty is entitled to its possession. Any deprivation of such possession is a tort for which an action lies.” It further observed that conversion “consist[s] of an unauthorized assumption and exercise of the right of ownership over personal property belonging to another, in hostility to his rights; an act of dominion over the personal property of another inconsistent with his rights; or an unauthorized appropriation.” Although it noted that relief has been recognized for certain conversions of intangible property, it has never been extended to the mere use of a trademark or with trade name infringement and it declined to do so after surveying other learned courts rejecting the notion of expanding conversion to intangible property concepts covered by trademark law.
By way of money had and received, the Georgia Supreme Court observed that the action is “founded upon the equitable principle that no one ought to unjustly enrich himself at the expense of another.” Further elaborating, it noted that the action “is maintainable in all cases where one has received money under such circumstances that in equity and good conscience he ought not to retain it.” However, it found persuasive that Google did not actually “sell” Edible IP’s intellectual property in its auctioned keyword advertising program as Google sold advertising, not Edible IP’s intellectual property, namely, the EDIBLE ARRANGEMENTS trade name.
Lastly, the Georgia Supreme Court denied Edible IP’s claim that Google violated the Georgia RICO Act. Edible IP alleged that Google violated the Georgia RICO Act when it obtained an interest in or control of Edible IP’s trade name including but not limited to obtaining money through a pattern of racketeering activity, namely, the theft of the EDIBLE ARRANGEMENTS trade name in the keyword auction program. However, Edible IP’s Civil RICO Act claim importantly did not allege consumer confusion, and thus as already noted by the Georgia Supreme Court, no theft of any recognizable right occurred. Therefore, the predicate act for a Georgia Civil RICO claim was absent, and the claim could be maintained.
The takeaway from this case is essentially that while creative uses of state law tort claims can often read on particular factual scenarios for intellectual property purposes such as the alleged misuse of trademarks or tradenames, Courts appear to disfavor those uses where there is a ready body of law sufficient to handle those claims: Trademark Law.