Finally: Clear Ruling That Realizes That Just Buying Ads On Trademarked Keywords Is Not Infringing

from the nice-to-see dept

For the better part of a decade, there have been a ton of lawsuits about keyword advertising, and whether or not it's a trademark violation to buy an advertisement on a competitor's trademark. All along, we've argued that this is not, at all, a trademark violation. The main purpose of trademark law, of course, is to prevent consumer confusion -- and advertising a competing product when people are looking for one brand is not a trademark violation. Just think of supermarkets where they have those little coupon dispensing machines that pop out competitor's coupons all the time. Keyword advertising is basically the same thing. Tragically, despite a large number of these cases, the courts have really skirted the issue. Some of the cases have blamed Google, but thankfully there have been a growing number of cases that have ruled Google clearly has no liability here as a third party. But the company buying the ads? Well, we've been waiting for a clear ruling... and we're getting closer.

Eric Goldman points us to the ruling in the 9th Circuit appeals court in a case involving Network Automation Inc. and Advanced Systems Concepts Inc. Network bought some ads on Google and Bing based on searches for "ActiveBatch," which is one of Advanced System's products. The key question: is there a likelihood of confusion? We've argued no for years, and the court here seems to agree. It goes through all of the factors that the lower court should have considered in determining whether or not there was likely to be confusion, and seems to indicate that Google and Microsoft clearly marking things as ads reduces the likelihood of confusion.
Here, even if Network has not clearly identified itself in the text of its ads, Google and Bing have partitioned their search results pages so that the advertisements appear in separately labeled sections for "sponsored" links. The labeling and appearance of the advertisements as they appear on the results page includes more than the text of the advertisement, and must be considered as a whole.
Even more importantly, the court finally seems to recognize that beyond just the limited list of "factors" previous courts have set out, it's important to actually look at the context and bigger picture. That's a key point that makes this ruling significant, and why many legal scholars are suggesting that this ruling is a defining ruling that will be cited and mentioned frequently in the future.

On top of this, hopefully it leads to an even clearer lower court ruling, but it seems clear that just buying an ad shouldn't be considered confusing. The text of the ad could make it confusing, but just buying the ad should not be.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    icon
    Miff (profile), Mar 10th, 2011 @ 1:56am

    I'm actually against this practice though, and here's why:
    Here, even if Network has not clearly identified itself in the text of its ads, Google and Bing have partitioned their search results pages so that the advertisements appear in separately labeled sections for "sponsored" links.

    Sadly, the "sponsored" links are at the very top of the results page and in blight yellow, saying "this is your result! click me!" to uninformed users.

    And the worst part is that most ad buyers don't bother to identify themselves, meaning companies have to take out ads themselves to make sure they're the top standing in Google.

     

    reply to this | link to this | view in thread ]

  2.  
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    Old Fool (profile), Mar 10th, 2011 @ 2:11am

    I make a point of never clicking on 'sponsored' links, it only encourages them to add more superfluous results.

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    coldbrew, Mar 10th, 2011 @ 2:34am

    FUD

    We don't need to look at no stinkin' "big picture" because we're talking about intellectual property.

    It's the law!

     

    reply to this | link to this | view in thread ]

  4.  
    icon
    Ben (profile), Mar 10th, 2011 @ 2:41am

    Look out Mike

    One of the AC's might starting taking out keyword ads for FUD and link back here :o)

     

    reply to this | link to this | view in thread ]

  5.  
    icon
    The eejit (profile), Mar 10th, 2011 @ 3:46am

    Re:

    Eh, laws are for those poor Gay Mexican Muslims, not Real @Mukins.

     

    reply to this | link to this | view in thread ]

  6.  
    icon
    Mike Masnick (profile), Mar 10th, 2011 @ 3:51am

    Re:

    Sadly, the "sponsored" links are at the very top of the results page and in blight yellow, saying "this is your result! click me!" to uninformed users.

    I believe there have been studies done on this, and they have found that the vast, vast, vast majority of users recognize those are sponsored links. It may have been true years ago that people were confused, but no longer.

     

    reply to this | link to this | view in thread ]

  7.  
    icon
    The eejit (profile), Mar 10th, 2011 @ 7:22am

    Re: Re:

    I'm on a fail run today, there was supposed to be a [/Beck] tag, but it got eaten by the Interweb daemons.

     

    reply to this | link to this | view in thread ]

  8.  
    icon
    Gwiz (profile), Mar 10th, 2011 @ 7:45am

    Re: Re: Re:

    Interweb daemons.

    Are those the same ones who toss my mis-addressed email back at me?

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Anonymous Coward, Mar 10th, 2011 @ 8:01am

    Re:

    Sadly, the "sponsored" links are at the very top of the results page and in blight yellow, saying "this is your result! click me!" to uninformed users.

    And the worst part is that most ad buyers don't bother to identify themselves, meaning companies have to take out ads themselves to make sure they're the top standing in Google.

    A person of average intellect will soon see that clicking the "Blight Yellow" link might or might not be in their interest. People are pretty smart and soon figure things out.

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    Anonymous Coward, Mar 10th, 2011 @ 9:34am

    Re:

    I agree, and I'm surprised the court didn't mention that the partitioning might not always be clear.

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    Anonymous Coward, Mar 10th, 2011 @ 9:36am

    Re: Re:

    I've seen some studies on this, and while I can't recall exactly what they said, I think people were much more likely to click on the top sponsored links than the sidebar sponsored links. I don't recall if the study evaluated whether that was due to confusion as to sponsorship/organic nature.

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Anonymous Coward, Mar 10th, 2011 @ 9:37am

    This is not a "Clear Ruling That Realizes That Just Buying Ads On Trademarked Keywords Is Not Infringing"

    Rather, it's a ruling that the district court did not consider everything it should have, and remand for further proceedings.

    While the ruling certainly scales back potential interpretations of earlier 9th Circuit case law, it is not at all what the headline claims it to be.

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    Anonymous Coward, Mar 10th, 2011 @ 10:12am

    Re:

    I agree- it seems to be a ruling that buying keywords MIGHT not be actionable. Still, it seems like a good ruling

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    Colg, Mar 10th, 2011 @ 10:25am

    Re: Re:

    Well it may be that I'm not confused by it but that doesn't mean it isn't irritating.

    The little "ads by google" box to the right there doesn't bother me at all. I guess the way they stick em right up there with my search results feels dishonest to me.

     

    reply to this | link to this | view in thread ]

  15.  
    icon
    The eejit (profile), Mar 10th, 2011 @ 1:18pm

    Re: Re: Re: Re:

    Yes. Did you kidnap mine?

     

    reply to this | link to this | view in thread ]


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