Yahoo To Stop Selling Ads On Competitive Trademarks

from the one-way-to-deal-with-things dept

Given how competitive the paid search market has become, it’s a bit surprising to see that Yahoo has decided to ban bidding on competitive trademarks. The issue seems to bring out quite a bit of emotion whenever we’ve discussed it in the past — but the basics are that some firms who are trying to stretch the meaning of trademark law, believe that no one should be allowed to buy a keyword-based ad, if that keyword is something they’ve trademarked. This is stretching trademark law too far. The purpose of trademarks is simply to avoid confusion for buyers (i.e., making “Bob’s Cola” look like “Coca Cola”). It’s about protecting consumers from being misled. However, in this age of overly aggressive interpretations of intellectual property, many are trying to use trademark law to mean “no one else can use my trademark for anything.” This includes having companies put up an ad for people searching for a competitor. However, that’s a complete misuse of trademarks. If this were allowed it would forbid things like companies buying billboards near the offices of their competitors (a common practice), or the supermarket handing out coupons for competing products to those you just bought as you checked out. Advertising to someone searching for a competitor’s product is a perfectly reasonable thing to do — so long as the advertisement is not designed to confuse the searcher into believing the ad is associated with the original company. So far, most (though not all) of the court decisions in the US have agreed that this is perfectly legal. Outside of the US, some of the decisions have gone the other way. However, in the link above, the writer doesn’t think it’s the legal issue that drove Yahoo’s decision, but rather its efforts to go after big advertisers. Suddenly this gives them a differentiating point, allowing Yahoo’s ad sales team to tell big companies that no competitive ads will appear on searches on their brand names. Of course, that should also drive down the competition on keyword prices on those terms, effectively hurting how much they can make on any advertising having to do with trademarked terms.

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