Internet Law
Internet Search Algorithms
Keyword Advertising Program
Advertisement
Trade Name
Trademark
Goodwill
Third Party’s Right to Use a Trade Name
Civil Theft of Personal Property
Conversion
Trademark Infringement
Failure to State a Claim
“Money Had and Received” ((Common Law) Unjust Enrichment))
Georgia Law
This case involves Google LLC’s application of internet search algorithms, which it uses to auction off search terms for profit to advertisers, and the interests of Edible IP, LLC, which seeks to exercise control over the profit generated from its trade name and associated goodwill. In 2018, Edible IP brought an action against Google arising from Google’s monetization of the name “Edible Arrangements” without permission in its keyword advertising program. Google moved to dismiss the complaint, or in the alternative, to compel arbitration. The trial court granted the motion, dismissing the complaint on several grounds, including that it failed to state a claim, and alternatively compelling the parties to arbitration. Edible IP appealed from that order, and the Court of Appeals affirmed the dismissal for failure to state a claim. See Edible IP, LLC v. Google, LLC, 358 Ga. App. 218 (854 SE2d 565) (2021). We granted certiorari to address whether the trial court properly granted Google’s motion to dismiss. For the reasons that follow, we conclude that Edible IP has not stated a cognizable claim for relief and therefore affirm.
The Court of Appeals summarized the relevant facts underlying this appeal as follows:
The complaint alleges that Edible IP owns the trademarks, trade names, and other intellectual property associated with Edible Arrangements, a business consisting of websites and “brick-and-mortar” franchises that sell, among other things, floral-shaped arrangements of fresh-cut fruit. To support these websites and franchises, Edible IP licenses the use of its intellectual property to various entities. Edible IP, however, maintains ownership of the intellectual property, which includes the trademark/trade name “Edible Arrangements,” as well as the goodwill generated by the brand.
Google operates an internet search engine that allows individuals to search for information by typing relevant words into a search bar. Using algorithms that analyze the search terms and requested information, Google returns “organic” results of the query on a results page. According to the complaint, Google monetizes its search engine by “selling . . . ‘keywords’” to advertisers that “trigger advertisements on the search results page when Google users search for the keyword term.”
Keyword advertising is purchased through an auction-like process, with prospective advertisers bidding on terms suggested by Google. The auction includes general terms like “shoes” and “mother’s day gift,” as well as trade names such as “Edible Arrangements.” Google has never contracted with Edible IP for the right to use the Edible Arrangements trade name, and Edible IP has not otherwise given Google permission to include its trade name in the keyword advertising program. Nevertheless, Google began auctioning the trade name to advertisers in approximately 2011. As described by the complaint, Google places advertisements purchased through the keyword program “in a more attractive location on the results page than its ‘organic’ results in an effort to drive consumer behavior and get those consumers to click on the ad rather than Google’s ‘organic’ results.”
Based on these and other allegations, Edible IP sued Google for theft of personal property, conversion, money had and received, and civil Racketeer Influenced and Corrupt Organizations (“RICO”) violations. Google moved to dismiss the complaint, arguing that any claims alleged by Edible IP needed to be arbitrated, that a forum selection clause deprived the trial court of personal jurisdiction over Google, and that the complaint failed to state a claim upon which relief could be granted.
Google also requested that the trial court compel the parties to arbitration.
Edible IP has alleged four claims: (1) civil theft of personal property; (2) conversion; (3) money had and received; and (4) violations of Georgia’s RICO Act. We will address each of the claims in turn.
a. Civil Theft of Personal Property
Georgia law authorizes the owner of property to bring a civil action to recover damages from any person who either (1) willfully damages the owner’s personal property or (2) commits a theft as defined in OCGA § 16-8-2. See OCGA § 51-10-6 (a).
In its complaint, Edible IP (…), alleging that “Google has committed theft by taking, in violation of OCGA § 16-8- 2” by “unlawfully taking and otherwise appropriating Edible IP’s property by selling that property without permission to others and keeping the proceeds for itself.” Edible IP identified the property as its “trade name ‘Edible Arrangements’ and the good will and reputation associated with that name.”
(…) We are, thus, first required to determine whether Edible IP’s trade name and associated goodwill are “property” within the meaning of the civil theft statute and, if so, the contours of the associated property rights and whether Edible IP has sufficiently alleged that Google has wrongfully “appropriated” this property.
(…) “Goodwill” has been defined as “essentially the positive reputation that a particular business enjoys. This ‘positive reputation’ manifests itself as an expectancy that a business has of continued patronage from its customer.” 38 Am. Jur. 2d Good Will § 1. See also Armstrong v. Atlantic Ice & Coal Corp., 141 Ga. 464, 466 (81 SE 212) (1914) (“Good will is the favor which the management of a business wins from the public, and the probability that old customers will continue their patronage and resort to the old place.” (citation omitted)); Goodwill, Black’s Law Dictionary (11th ed. 2019) (defining goodwill as “a business’s reputation, patronage, and other intangible assets that are considered when appraising the business”).
We have expressly recognized that goodwill is a type of intangible property interest. See Nat. Assn. for Advancement of Colored People v. Overstreet, 221 Ga. 16, 29 (4) (a) (142 SE2d 816) (1965) (“It is uniformly recognized that good will is a species of property and constitutes a valuable asset of the business of which it is a part.” (citation omitted)). See also Reis v. Ralls, 250 Ga. 721, 723 (1) (301 SE2d 40) (1983) (“It appears clear that in addition to a trademark, a trade name, along with the goodwill it represents, may be the subject of an Article 9 security interest.”).
Construing these factual allegations in favor of Edible IP for the purpose of analyzing Google’s motion to dismiss, as we must, Edible IP has sufficiently alleged a property interest in the trade name “Edible Arrangements” and its associated goodwill within the meaning of OCGA § 51-10-6.
(…) Under each of these statutes, it is clear that trade names are only protected from use by others to the extent that such use is deceptive or there is a likelihood of confusion by the public.
Here, Edible IP has not alleged that Google’s use of the “Edible Arrangements” trade name in its keyword advertising program causes any confusion, and in fact, has disclaimed in the complaint that it is “seeking any . . . relief for any consumer confusion.” Thus, we see no basis in Georgia statutory law for Edible IP’s claim that Google has appropriated the “Edible Arrangements” trade name simply by using it in Google’s algorithms and keyword advertising programs.
And although Edible IP disclaims asserting any federal trademark claim, a review of federal trademark law is instructive on the contours of a third party’s right to use a trade name. Like Georgia statutory law and the common law, federal trademark law offers only limited trademark and trade name protection. For example, the doctrine of fair use permits reference to a competitor’s trade name in an advertisement.
(…) We see no reason to extend civil theft in Georgia to encompass the mere use of a trade name, without implicating consumer confusion, when doing so would subvert Georgia trademark law, federal trademark law, and the common law of trademark infringement.
(…) In sum, given Edible IP’s express disavowal of the element of consumer confusion in the complaint, it cannot state a claim for civil theft arising from the use of its trade name and associated goodwill.
Accordingly, the trial court did not err in granting Google’s motion to dismiss Edible IP’s claim for civil theft.
b. Conversion
Although Georgia law may provide relief for the conversion of certain intangible property, we have never extended that tort to claims based on the mere use of a trademark or on trade name infringement, and we decline to do so now.
Again, the cases Edible IP relies upon are readily distinguishable. For example, in English & Sons, Inc. v. Straw Hat Restaurants, Inc., 176 FSupp.3d 904 (N.D. Cal. 2016), the court concluded that the plaintiffs had “converted” the defendant’s trademark and other intellectual property by wrongfully registering ownership of the trademark with theU.S. Patent and Trademark Office – not just by simple use. See id. at 923 (2).
Other courts have likewise rejected attempts to expand the tort of conversion to encompass the type of intangible property traditionally protected within the scope of trademark law. See, e.g., Ortega v. Burgos, Case No. 12-CV-05421, 2014 U.S. Dist. LEXIS 70457, at *3 (II) (E.D.N.Y. May 22, 2014) (dismissing trademark conversion claim because “not only has this Court been unable to find any authority that recognizes trademark conversion, the leading treatise on trademark law states that, ‘every court to consider such a claim has rejected it’” (citation omitted)). See also 4 McCarthy, supra, § 25:9.50 (“Occasionally, a trademark owner will allege, either along with or instead of a traditional infringement claim, that its mark has been ‘converted’ by defendant. Every court to consider such a claim has rejected it. The author agrees that the tort of ‘conversion’ should not be stretched and deformed to substitute for the traditional law of trademark infringement.”).
Accordingly, we cannot say that the trial court erred in concluding that Edible IP had failed to state a claim for conversion.
c. Money Had and Received
In Count 3 of its complaint, Edible IP asserts a claim for money had and received, alleging that Google currently holds a sum of money belonging to Edible IP. The common law action for money had and received “is founded upon the equitable principle that no one ought to unjustly enrich himself at the expense of another.” Sentinel Offender Services, LLC v. Glover, 296 Ga. 315, 331 (4) (a) (766 SE2d 456) (2014) (citation omitted). This 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.” Id. (citation and punctuation omitted).
Edible IP’s claim for money had and received again relies on its unavailing assertion that, rather than selling advertising space, Google is in essence selling Edible IP’s trade name and illegally profiting from it. And, despite Edible IP’s insistence that our courts have previously held that “the fact that money was received from a third person will not affect a defendant’s liability,” this holding does not change the futility of Edible IP’s claim for money had and received because Edible IP has no claim to the profits that Google has earned by selling advertising. Accordingly, for this reason and for the reasons discussed above in Divisions 1 (a) and (b), Edible IP cannot, as a matter of law, show that it is entitled to profits that Google earns through its keyword advertising program (even if the program uses the trade name “Edible Arrangements”) or that Google has been unjustly enriched at Edible IP’s expense, and this claim likewise fails.
Secondary sources: J. Thomas McCarthy, Conversion of a Trademark, 4 McCarthy on Trademarks and Unfair Competition, § 25:9.50 (5th ed. 2019)
(Georgia Supreme Court, Feb. 15, 2022, Edible IP, LLC v. Google, LLC, Docket No. S21G0798)
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