Office Depot Sues Staples Over Google Ads

Office Depot has filed suit against rival office supply giant Staples for improperly purchasing online search engine ads that redirected potential customers to the Staples Web site. According to the suit, filed this month in a U.S. District Court in West Palm Beach, FL, Office Depot is charging Staples with trademark infringement, unfair competition, false advertising, and deceptive trade practices. The company is asking for an injunction against Staples, along with unspecified damages. The complaint alleges that Staples and its subsidiary, Quill, tried to lure away customers of Viking Office Products, a 45-year-old catalog company and Office Depot subsidiary, by purchasing keyword ads from Google. When a customer typed in Viking, the first ad to appear on the right side of the page was for Staples. Clicking on the ad forwarded customers to the sites for Staples or Quill. The complaint says that Staples is trying to improperly lead customers away from Viking, because Office Depot is closing Viking business operations in the United States; it will keep its European operations. Search engines like Google place paid ads on their results pages that are linked to keywords and award those slots to the highest-bidding advertisers at auction. Many marketers have objected to the sale of their brand names and trademarks as keywords by search engines. Google's Web site says the company's policy is not to allow the use of trademarked terms in the titles or creative content of search ads, but that it has the right to sell those terms as keywords. In addition, Google "cannot arbitrate trademark disputes between advertisers and trademark owners." This last policy might need to change, according to Adam Sarner, a principal analyst at Gartner. "[Google] really needs to think about this," he says. "I think their response to not get involved in disputes is the right one, because they don't want to be the rule maker. But that said, I think they'll have to lay some guidelines down moving forward due to the growing popularity of search marketing. This won't be the last time we hear about this. Anybody can sue. "[Staples is] taking advantage of a medium that is becoming more and more important and incredibly popular," he says. "They're letting Office Depot customers know that their company is going out of business, 'and oh, by the way, we sell products that are very similar.' They've chosen search marketing as a way to do this, but I think they might have gone about it in the wrong way. We'll find out once the damages are announced." Related articles: Direct Marketing Trends for 2006 Internet Research Drives In-store Sales