by Andrew Flake

As often as we hear about mediation and its benefits, and they are many, are there disputes that need to be decided in court, whether by judge or jury? Absolutely.

At a minimum, some categories of business disputes require, up to a point, litigation and attention from the courts. One of those categories, for specific businesses, is a challenge to the company’s fundamental business model. Those can make compromise difficult, impractical, or both. Another category, for all litigants, is an undecided legal issue.

Both of these factors came up in a just-decided Georgia Supreme Court opinion, Edible IP, LLC v. Google, LLC, which looked at whether to confer a new kind of protected status on the use of a business trade name in online search.

The plaintiff (EA) operates a franchise-based business, “Edible Arrangements,” that sells, not surprisingly, floral-type arrangements made with food. EA had a separate subsidiary to license out its tradename and trademarks, and it clearly saw in Google someone monetizing EA’s name unfairly. It sued, alleging four different theories, each of them seeking some form of compensation from EA for Google’s use of the name “Edible Arrangements” as part of its internal key-word algorithm.

The development of new varieties of claim can be slow and is often an exercise in classification. Despite a worthy effort and some vigorous litigation by EA, however, the Georgia Supreme Court did not place an order: it determined that Google can continue to use trademarks and trade names in its keyword advertising.

The result makes sense. In brief, the opinion finds without saying so that keyword use by the advertising platform is a kind of fair use. What I found most interesting, though, was how the Court picked up and examined each of EA’s theories for a fit, holding each up to the light, like a collector with a seashell or gemstone. That is how our case law gets made.

As a first step, for purposes of the Georgia theft statute, the Court granted that EA “has sufficiently alleged a property interest in the trade name “Edible Arrangements” and its associated goodwill.” But to make a goodwill-based claim, whether we look to a statute, like Georgia’s Uniform Deceptive Trade Practices Act, or to common law protection for trademarks, there must be consumer confusion.

It is the presence of confusion that leads to “illegitimate misappropriation of a business’s goodwill” as opposed to a fair use for comparative advertising. Without a claim of confusion — and EA stated explicitly it was not alleging confusion, or trademark infringement generally — there is no claim for relief. A claim for conversion, or misuse of property, cannot be used as a disguised trademark claim.

To the Supreme Court, it seems, EA’s disclaimer of what it was and was not alleging (in essence, reciting in its complaint “we are not seeking trademark remedies”) was basically the same kind of end-run, trying “to expand the tort of conversion to encompass the type of intangible property traditionally protected within the scope of trademark law.”

The Court then sifted through other categories of claims. Google’s use was not a physical taking, as with land; it was not a use of a “name or likeness,” as with an individual person’s right of privacy; nor was it a use of some creative intellectual property, like teaching materials or other company content.

Why did none of these theories fit?

Consider exactly Google was selling: was it the trade name “Edible Arrangements,” or was it advertising space, like a newspaper? In claiming a share of ad profits, EA’s theory was that “Google is in essence selling Edible IP’s trade name and illegally profiting from it,” a characterization the Court rejected. What Google is selling is the chance for a competitor of EA (or EA for that matter) to choose product placement, like a drug store placing its generic vitamins next to a name brand on the same shelf.

In an earlier decision, the Georgia Court of Appeals determined the same thing, i.e., that “Google has auctioned off the opportunity to advertise on the results page produced when an individual types the keyword phrase “Edible Arrangements” into the Google search bar.”

It also could not have escaped the either court’s notice that, if they accepted EA’s argument, it might cripple the ability of Google or any other platform to provide a space for legitimate comparative advertising. Courts, especially our appellate courts, are sensitive to the policy and market-implications of developing new law.

Intriguingly, the Court of Appeals left open the possibility of some other variety of claim: “In affirming the trial court’s dismissal of Edible IP’s claims, we express no opinion on whether keyword advertising might give rise to some other claim not addressed here.” That would include at least how someone other than Google or another search engine, like a competitor, used a trade name in the keyword or search context. That is, and continues to be, an actively-litigated area.

So who really won in this case, apart from Google? Perhaps the many consumers out there, hankering for something sweet, fruity, and placed in a fruit or vase. I still lean more on the traditional floral side when it comes to Valentine’s Day, but I’m all for lots of online choice.

[The Georgia Supreme Court case is Edible IP, LLC v. Google, LLC, 2022 WL 451876 (Ga., decided Feb. 16, 2022), and the Court of Appeals case is Edible IP, LLC v. Google, LLC, 854 S.E.2d 565 (Ga. App. 2021).]