Google Wins Right to Continue YouTube Kids After Beating 'Googles' Lawsuit

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Lesson: If you acquire a domain like Googles.com, use it or lose it.

Google won't have to shut down YouTube Kids thanks to a judge's decision on Tuesday in an unusual lawsuit.

The case was brought by SM Kids, which claimed to be the successor to the "Googles" brand.In fact, the complaint filed in February 2018 opened, "Before there was 'Google,' there was 'Googles,'" tracing the backstory to a 1995 book titled The Googles From Goo, which led to a multimedia platform for children, and eventually a 2008 settlement resolving trademark claims.  

In the settlement, Google — the web giant — agreed not to make modifications to its search engine business that would create consumer confusion for Googles. That allegedly meant staying out of the kids' content business. SM's lawsuit alleged that Google had breached the settlement  by operating Google Play — the app store for the Android operating system which includes games, music, books, movies and more for kids — and YouTube Kids, a mobile app that facilitates the sharing of videos appropriate for children. SM wanted $25 million in compensatory damages plus an injunction.

Now, the lawsuit has failed as a judge traces a series of purported intellectual property transfers that failed to capitalize on whatever goodwill the "Googles" brand had.

As U.S. District Court Judge Lorna Schofield recounts, Steven Silvers registered "Googles" as a trademark back in 1997. The following year, Googles.com launched. Also in 1998, Google released its famous web search engine.

Almost a decade later, Stephen Garchik invested in the production company behind Googles. The plan was to foster an interactive website where children could become a "Goo Kid" member, play "Goo Games," and listen to "Goo Music." (This was a time when social media was the hottest thing in venture capital.)

Almost $3 million in loans were extended to the business before Garchik resigned from the board of directors and sued in Maryland state court to recover debt. As a result, Garchik walked away with intellectual property including the domain name googles.com.

Garchik then transferred the Googles asset to SM Kids, a newly-formed entity, but Googles.com basically remained dormant for years. The content on the site was replaced with a "coming soon" page.

Eventually, SM Kids got around to suing Google.

"[Google] seek[s] to dismiss on the basis that Plaintiff lacks standing to enforce the Settlement Agreement because Plaintiff purportedly does not own the Googles mark, and rights under the Settlement Agreement belong only to the owner of the Googles mark," writes Schofield. "Defendants’ motion is granted; Plaintiff has not shown by a preponderance of the evidence that goodwill accompanied the assignment of the mark, which is necessary for an effective transfer."

The judge explains that a valid assignment of a trademark must include the transfer of the goodwill of the business, and under the Lanham Act, that requires "use in commerce."

"Plaintiff has not shown by a preponderance of the evidence that the Googles mark was used in commerce -- resulting in goodwill -- from 2010 when the mark was first assigned until 2018 when it was assigned to Plaintiff," states the decision, later adding, "That Garchik intended to produce new content for the existing website and was working with consultants in anticipation of launching fresh material is not use in commerce."

Here's the full dismissal ruling.

This article was originally published by The Hollywood Reporter.


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