Price Chopper owner sues ShopRite owner over online ads -- is the supermarket war on?
A screengrab from October 20, 2011. Here's a larger version. (We removed the Google toolbar at the top.)
Updated at 3:30 pm after hearing from Wakefern/ShopRite.
The Golub Corp -- which owns Price Chopper -- is suing the cooperative behind ShopRite over ads the cooperative allegedly bought on Google, the Times Union first reported today. Golub is alleging trademark infringement, false designation of origin and unfair competition. (We pulled the filing -- it's embedded after the jump.)
We noticed the ads last week while looking up some stuff about Price Chopper. A search for "Price Chopper" on October 20 returned the regular search results -- and at the top: a text ad for ShopRite. We took a screengrab (above) and figured we might eventually use it as evidence in what appears to a supermarket war that's starting to heat up.
Golub saw the situation rather differently. From the filing:
Upon information and belief, Defendant Wakefern has infringed Plaintiff Golub's registered mark in interstate commerce by various acts, including purchasing keywords including or relating to the PRICE CHOPPER® mark and engaging in Internet advertising campaigns using the PRICE CHOPPER® mark, to sell, offer for sale and advertise Wakefern's retail grocery goods and/or services. Defendant's use of the PRICE CHOPPER® mark is without permission or authority of Plaintiff Golub and such use by Defendant is likely to cause confusion, to cause mistake and/or to deceive.
Golub alleges Wakefern also bought similar ads on Bing and Yahoo (and it includes screengrabs in the filing).
Buying Google ads associated with searches for your competitors almost certainly isn't illegal.* A lot of companies do that. Titling the ad "Price Chopper flyer" when it's not a Price Chopper ad -- that could be a different story. And Golub's filing cites a federal law that covers trademark infringement, trademark dilution, and false advertising. Golub is asking for an injunction against the ads and damages.
We contacted Wakefern/ShopRite about the suit. A representative said the company hasn't received the complaint yet and it's premature to respond without it.
Stuff like this is bound to happen more in future. Today it's buying ads on Google. But with mobiles gaining more geographic capabilities, it's probably only a matter of time before a company will be able to buy ads that pop up when a person is standing in their competitor's store. "You're at Market X? Come on over to Market Y, we'll give you 25 percent off."
ShopRite apparently has as many as four stores planned for this area. And it doesn't seem shy about taking on Price Chopper -- it opened its first store right in Golub's backyard. We're still waiting to see if the back-and-forth will result in a better prices and experiences for shoppers.
* Of course, we are not attorneys. We don't even play one on TV.
Earlier on AOA: A first look at ShopRite Niskayuna
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Comments
Mr. Show has already showed us what can happen in supermarket wars....I hope it doesn't come to this.
http://www.youtube.com/watch?v=tP4yX2rkpBc
... said Kizzi on Oct 24, 2011 at 1:03 PM | link
I really don't see how PC has a legal claim, here, but then I'm not a lawyer, just a marketer. ShopRite has purchased Google AdWord space against the key words "Price Chopper", a fairly common practice. In fact, it appears they bought the phrase "price chopper flyer", as they probably have a promotion matching PC's discounts in the weekly flyer. Looks like legal sabre-rattling to me more than anything.
... said AddiesDad on Oct 24, 2011 at 1:29 PM | link
i agree with the plaintiff...it is at the very least a violation of the Lanham Act and common law unfair competition.
i predict that the parties will settle as per usual.
... said colleen on Oct 24, 2011 at 1:48 PM | link
I don't see how PC has a legal claim against ShopRite either (I'm not a lawyer though). I'm more inclined to think they'd have a claim against Google....
I think Google's been sued before over their paid-for-placement ads, but I can't find anything on the subject right now. This is the closest I came up with from 2002:
http://www.clickz.com/clickz/column/1710331/lawsuit-over-paid-placements-define-search-engines-part
Anyone know the outcome of this?
... said Shannon on Oct 24, 2011 at 3:34 PM | link
While yes, you shouldn't advertise with the use of someone else's trademark, there's a simple policy for reporting trademark infringements in Google Adwords: http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=6118
It's unlikely the case will get anything outside of sensational coverage. There isn't a quantifiable way to determine what PC lost in potential income and I would even wager the "threat" posed by the ad was minimal to non-existent making whatever damages they hoped to gain back moot.
I've never been particularly impressed by PC's online marketing know-how, so this makes perfect sense.
... said Rhea Drysdale on Oct 24, 2011 at 4:42 PM | link
ps - Shannon, you're right -- usually Google is the party that is sued for allowing the business' trademark to be infringed on.
... said Rhea Drysdale on Oct 24, 2011 at 4:44 PM | link
Yet no class action against PC for calling themselves "Price Chopper". Show me one chopped price (and if they are chopped, just how high were they to begin with?).
... said Trevor on Oct 24, 2011 at 9:33 PM | link
Very true- the infamous Stoufers mac and cheese comparison - Walmart $1.66 Price Chopper $3.29
... said The Media Zone on Oct 27, 2011 at 7:02 PM | link