This Beijing lawsuit looks like a fun one (if you’re an IP/IT lawyer, that is). Lots of great issues to consider, but as usual, I only have newspaper article details at this point.

A local court in the city will hear a case on Thursday in which an online shoe-seller is suing Google for damaging its reputation.

Beijing Letao Culture Development Co Ltd, which runs letao.com, accuses Google of unfair competition and violating advertisement laws, through ads on google.cn and google.com.

In early May, a Letao employee searched the name of the company on google.cn, and the second result showed: “If you want to buy sneakers, OKBuy is better than Letao.”

Letao asked that the ad be pulled and was put off, allegedly, until the suit was filed. The plaintiff is asking for RMB 500,000 and a public apology.

This is of course interesting in one sense because anything that happens to Google in China these days is going to be scrutinized. Whether its other problems will translate into less favorable treatment in a Haidian courtroom remains to be seen, although I have confidence in the experience and professionalism of Beijing jurists, who are a heck of a lot better than their colleagues in many other parts of the country.

So aside from the Google angle, what are the legal issues here? The plaintiff’s lawyer explains:

“Google acted illegally by using the Letao brand as a keyword to trigger ads of other companies on its website,” Letao’s lawyer Hua Jianming told reporters on Tuesday.

“The ads telling customers that its competitor is better than Letao, leads potential Letao buyers to turn to its competitor. It has tarnished Letao’s reputation and harmed its interests,” Hua said.

OK, looks like at least three separate issues here:

1. Internet keyword dispute. China has a keyword registration and dispute resolution system, so this is not exactly a new issue. Whether Letao ever registered its name as a keyword is not clear.

2. Advertising law violation. I assume the issue here is the claim “If you want to buy sneakers, OKBuy is better than Letao.” Generally under Chinese advertising law, competitor comparisons like this are not allowed. I’ve seen ads like this get pulled by AIC (the government regulator) before, so I’m not sure what OKBuy was thinking here.

3. Reputation damage. This one might just be a catch-all, tacked on as a matter of course. Whenever I see the term “reputation” now, though, I am quite aware that there are some new possibilities for litigation based on the new Tort Liability Law and the included right of reputation. Since the only claim here was that OKBuy is better than Letao, I’m not sure what the specific claim is with respect to reputation (if there is one).

If the court finds that the ad in question violated the Advertising Law, then perhaps it would need to determine whether Google failed to take it down in a timely fashion or whether it is liable for posting it in the first place. I’m pretty sure that with most online platforms like Google, there isn’t any formal legal oversight/due diligence of ads before they go up — it’s all in-house (the high volume does not allow for anything else) and not done by folks who necessarily know the finer points of China’s advertising laws and regulations. Whether they have decent training or not, I have no idea.

Anyway, fun stuff. Based on the keyword issue and the advertising law matter, I’m not at all surprised that this case, under an unfair competition theory, made it to the hearing stage.

Stay tuned. If anyone has details you can share, please do so.