Coldwater Creek sues over Web ad
BOISE – Coldwater Creek has filed a lawsuit in federal court charging that a competitor used its name to try to divert Internet customers as they searched on Google for the Sandpoint-based catalog retailer.
According to the complaint, filed in U.S. District Court in Boise, an affiliate of the Charles Keath catalog retailer placed an “AdWord” ad on the Google Web site that used the Coldwater Creek name.
The ad, according to a printout filed with the lawsuit, advertised, “Coldwater Creek Décor. Find beautiful and unique apparel, fashions & home accents here! at CharlesKeath.com.”
“Although the AdWord utilized the trademark name ‘Coldwater Creek,’ the AdWord delivered a customer who ‘clicked through’ to the DMSI/Charles Keath Web site,” the lawsuit charged. “This unlawful use of Coldwater Creek’s famous mark is occurring without Coldwater Creek’s consent or authorization and is causing confusion among consumers who seek to use Google’s search engine to locate Coldwater Creek’s Web site.”
Ford Elsaesser, attorney for Coldwater Creek, said when customers clicked on the words “Coldwater Creek Décor” in the ad, they went to CharlesKeath.com instead.
“It’s been taken down, but we want to make sure that nothing like this happens again, at least with these parties,” Elsaesser said, “and hopefully send a message to other parties that this is not an appropriate thing to do, to use our trademark to drive traffic to their site.”
Coldwater Creek’s lawsuit doesn’t name Google, but another pending case, filed by GEICO Insurance in Virginia, does. In that widely watched case, the insurance firm charges that a change in Google’s ad policies in April essentially allows companies to bid on chances to benefit from other companies’ trademarks by tying their ads to trademarked names as search terms. Hearings are expected in that case this summer.
This kind of problem is not unique to the Internet, said marketing expert and Rochester Institute of Technology professor Eugene Fram. “If you want to maintain a trademark, you have to take action on every instance that you know of; otherwise the name then becomes generic,” Fram said. “So companies who build brands have, as a result, very carefully guarded it. Coldwater Creek in this instance is doing what a company should do to protect its brand name.”
But the Internet has made it simpler for firms to infringe on other companies’ trademarks.
“Certainly it makes a lot of things easier,” Elsaesser said. “It doesn’t make it any less of a problem, that’s for sure. … What Coldwater Creek is attempting to do here is make sure that our customers’ confidence in the brand name is protected. We don’t ever want a situation where people think they’re getting Coldwater Creek service or a Coldwater Creek product and instead getting something else.”
The nationally known Sandpoint retailer sells women’s casual clothing, jewelry, accessories, gifts and home items through catalogs and over the Internet.
It also has opened more than 60 retail stores in recent years, expanding its business into conventional retailing as well.
Charles Keath, which was acquired by Direct Marketing Services Inc. of Chicago from Florida-based The Mark Group in late November, sells “furniture and bedding, unique accents for your home and garden and comfortable apparel with easy elegance,” according to its Web site.
An operator at the Charles Keath order center in Cedar Rapids, Iowa, said the company’s offices can be reached only via a post office box. Officials at DMSI in Chicago couldn’t be reached for comment.
The lawsuit seeks an injunction against DMSI and its affiliates to prohibit them from “diverting Internet traffic from Coldwater Creek’s Web site to the Web sites of others,” along with damages for any diverted business, costs and attorney’s fees, and “such other and further relief as the court deems just.”
Said Elsaesser, “We do not want anybody misleading our customers by using our trademark without Coldwater Creek’s permission. Obviously that trademark is very, very important to the company.”