Keywords Have Become Gamble for Marketers

Keywords Have become Gamble for Marketers May 9, 2005

Felix Hofer and Douglas J. Wood's article "Keywords Have Become Gamble for Marketers" explains the controversy over the used of keywords. Google has recently been accused of trademark infringement and dilution and unfair competition. Trademark infringement is when a company uses a competitor's trademark in a way that may be confusing to consumers. An example of trademark infringement is when a company used a phrase or similar phrase owned by a competitor when selling their product. When a company uses a competitor's famous trademark in a way that dilutes its goodwill in the marketplace, trademark dilution has occurred. If a company were to divert a competitor's customers to do business with them through misleading practices, the company engaged in unfair competition.

Google used to police the sale of keywords but in 2004, Google abandoned its clearance process of selling keywords. This may be because more than 95% of Google's revenue is from the selling of keywords. This free market of keywords has created trouble for Google. American Blind has brought allegations of trademark infringement and unfair competition against Google and other search-engine marketers. American Blind says the sale of its trademarks as keywords is directing web browsers to sites of its competitors. The case against American Blinds on March 30, Google stated that "Google believes and maintains that descriptive terms (including terms such as 'blind,' 'wallpaper' and 'factory,' which are component parts of American Blind's trademark) are not entitled to any such treatment, and that Google's sale of keyword-triggered advertising does not violate the Lanham Act." The Lanham Act states that it is a piece of legislation that contains the federal statutes of trademark law in the United States. The Act prohibits a number of activities, including trademark infringement, trademark dilution, and false advertising. Do be sure that client search ads don't include third party trademarks. That certainly is one key takeaway. The California federal court handling this case has refused to dismiss the suit. In France, companies have successfully sued Google. A tour operator, Louis Vuitton, and Le Meriden Hotel and Resorts have all won their cases. In the Louis Vuitton case, Google had to pay 200,000 euros, and in the Le Meriden's case Google was fined 150 euros per day if they did not comply. Although hundreds of thousands of euros is not much to Google, verdicts are expected to rise to millions of dollars. A large insurance company, AXA, has sued Google seeking millions in damages. Other cases like this are pending elsewhere in Europe.

Advertisers can also face charges similar to Google. With experts predicting Internet advertising to surpass spending in print, advertisers cannot avoid advertising on the Internet. Advertisers must make a choice. For now they are not going to stop using keyword because they are so effective in reaching the consumer, but they cannot continue once someone recovers millions in damages a day. The article continues counting many European cases against Google and others, pointing out that the European courts are falling on the side of the trademark holder. The article, whilst being an opinion article not a news article, was well researched. It certainly showed no bias for or against Google, the courts, or the Trademark holders. The few things that I thought about this article were, Should it be Google's problem? Surely is an advertiser is breaking a trademark, it is the advertiser who is at fault. If the courts agree that the advertiser is in error, then Google should have to drop the advert, but how can they be expected to police it? While lawsuits so far have only named Google as a Defendant, no agency would want to be responsible for having a client be sued as a party to yet another Google lawsuit. And good search practice needs to include policing competitor's ads to be sure they don't infringe your clients' marks. Don't rely on Google to enforce this. Agencies must do it on behalf of clients. But nothing about the Google rulings changes the fact that buying competitors trademarked keywords remains a best practice for search-engine marketers (SEM).

Trademark Law Shapes Internet Pop-up Ads

Google itself faces trademark infringement lawsuits based on its AdWords program, which allows marketers to serve text ads triggered by consumer queries on rivals' names. Other actions that Google faced were violations of The Lanham Act. This act was designed to prevent consumer confusion, in particular, a trademarks connection with the sale that could confuse customers. Jonathan Bick's article, "Trademark Law Shapes Internet Pop-up Ads" focuses on Trademark laws and their effect on the legality of Pop-up advertisements. Advertisements that appear on a computer while on the internet are known as pop-up ads. Many people do not like the use of Internet pop-up ads and have fought them with many different actions. Claims have been made that the advertiser has engaged in copyright infringement, contributory infringement, trademark dilution, unfair competition, and state law violations. Trademark infringement has been the most effective at limiting pop-up ads, although courts are still divided. Bick discuses the cases of Wells Fargo, 1-800 Contracts and U-Haul. The plaintiffs in each case argued that the defendants used the mark to hinder Internet users form visiting the plaintiffs' web site by using their mark to trigger pop-up ads. In the U-Haul case the court said that because the pop-up ad appeared in a separate window than the owner's web site, they did not use the owner's trademark. The Wells Fargo case was found not to be a trademark infringement because the mark was not displayed in the pop-up ads. In the 1-800 Contacts case the court found the plaintiff's and defendant's marks were very similar. The only difference between the two marks was the addition of www and .com. The courts found that this would not cause confusion. The 1-800 Contacts decision says that branding and disclaimers are irrelevant for pop-up advertising protection.

In the decision that adware companies' business models, a federal court ruled WhenU's pop-up ads don't violate trademark law. In the case, 1-800-Contacts, Inc. vs. WhenU.com, the U.S. Court of Appeals for the Second Circuit reversed a federal judge's order barring WhenU from serving ads to consumers who visited 1-800-Contacts' Web site. The court held that WhenU did not violate 1-800-Contacts' trademark rights by using the site's URL to trigger ads for other contact