Legal Issues

by Mike Masnick

Overture, Geico Guarantee Many More PPC Trademark Lawsuits

from the not-a-good-precedent dept

It's been pointed out, repeatedly, that selling text ads based on trademarked keywords is not trademark infringement. There's no confusion over brand, which is what trademark law is designed to prevent. Instead, it's simply companies trying to get listed alongside their competition, which is a standard marketing move (why are no-name brand colas on shelves in supermarkets next to Coke and Pepsi?). However, companies like Geico have been suing Google and Yahoo for selling text ads based on their trademark. While Google's case is ongoing, Yahoo's Overture division decided to settle today. This might mean that they didn't think they would win, but it sets a bad example. While ads are apparently still showing on Overture for Geico competitors, Geico clearly got something out of Overture to allow the practice to go on. What this means, is that every company that has competitors buying ads on trademarked terms will now be calling Overture, asking for their "settlement."

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  • identicon
    Steve Mueller, 1 Dec 2004 @ 6:19pm

    Trademark Infringement Or Not?

    While I agree that it doesn't sound like trademark infringement to me, I have two problems with the arguments raised.

    First, regarding a no-name soft drink being positioned next to Coke and Pepsi, does the manufacturer really control that? I suspect the store controls that because they want all soft drinks located in a common area to make them easier to find.

    I realize that stores also charge premiums for some placement (end caps, for example), but I doubt the no-name manufacturers are specifically asking to be placed next to Coke or Pepsi.

    Second, where do you draw the line where it's OK to buy something based on a competitor's name? It seems clearly wrong for Pepsi to buy, even if visiting the page reveals it's clearly a Pepsi page and makes no reference to Coke. Are terms in a search engine that different? I could argue the case that search engine terms are almost as much a part of your online identity as your domain name.

    On another aspect, it would be interesting to see what would happen if a company seeded their Web pages with numerous references to a competitor in order to increase their page rank when users searched for the competitor ("75% of users prefer Pepsi to Coke", "Pepsi has 10% less caffeine than Coke", etc.). Would that be an unfair competitive tactic?

    Probably not, but would the search engine have any culpability if a search for Coke brought up a Pepsi page first?

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

    • identicon
      thecaptain, 2 Dec 2004 @ 5:17am

      Re: Trademark Infringement Or Not?

      You'd be surprised.

      Placement isn't only purchased on the end caps, but companies bid for places on shelves at eye-level and to specifically fill up an entire shelf (at eye-level I suppose) to themselves forcing other brands to another shelf less in sight.

      So it doesn't surprise me that some brands might request (and pay) to get placed relative to other brands.

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

      • identicon
        Boilerbob, 2 Dec 2004 @ 7:08am

        Re: Trademark Infringement Or Not?

        I've never worked in a grocery store, but I've heard before that most large chain stores basically break even. All their profits are from product placement payments. Yes, store do want consumers to have a convienent shopping experience but manufactuers have a great deal of say in where and how high/low there products are.

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

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