Legal Issues

by Mike Masnick

Court Says Keyword Advertising Isn't A Trademark Violation

from the good-answer dept

Every few months it seems like we have another lawsuit of this nature, and with different courts coming to totally different conclusions, it's likely that this is going to continue for some time. It's about whether or not it's legal for a company to buy text ads in Google when someone does a search on their competitor's name. As we've said repeatedly, there shouldn't be a trademark violation here. Trademark law is supposed to prevent consumer confusion, such as having someone think they're buying Coca-Cola, only to find out it's really Bob's Cola. Unfortunately, though, many companies seem to believe that trademark law means they have full ownership of their trademarked term, and no one else can use it for anything -- especially if it's a competitor. The courts have gone back and forth on this, with some of them seemingly confused by the real issues at stake. Eric Goldman has written an analysis of the latest such case, where it sounds like the court came to the right conclusions. They found that simply buying an ad based on a competitor's keyword doesn't constitute a trademark violation, as there's not likely to be any customer confusion (however, if the ad itself is written with the trademarked term, that might be a different story). This is the right reasoning, and it's good to see yet another court figure it out. There are still likely to be more suits along these lines, but the more reasonable decisions lawyers can point to, the better.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Unknown Name, Jan 8th, 2007 @ 1:45am

    Maybe we shouldn't trust the lawyers

    "...the more reasonable decisions lawyers can point to...."

    Your argument implies that lawyers will distinguish between "reasonable" and "not reasonable". The real problem is that lawyers have not been able to make that distinction in the first place. If they could, these lawsuits would not exist.

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

  2. identicon
    ScytheNoire, Jan 8th, 2007 @ 2:45am

    are they really this stupid?

    I've been reading so many of these lawsuit stories lately, which leads me to ask one question:

    Are the companies and lawyers involved in these cases really that stupid?

    I mean, most of these cases involving patents, trademarks and copyrights, including every DMCA lawsuit, are almost always lacking logic. It's like every company and lawyer in the United States has lost their mind and there is no logic left in America.

    Plus there just must be way too many lawyers, need to start shooting them.

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

  3. identicon
    Shohat, Jan 8th, 2007 @ 3:00am

    Actually, this is Exactly what Trademark is for

    What could be more confusing to an average consumer than :

    Searching for a certain trademarked product, getting advertisment for a product of same function and quality , by another firm .

    Sure , 90% of the people could understand the difference because the search was targetted and they knew what they were looking for , buy 10% people could easily get the wrong impression .

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

  4. identicon
    Anonymous Coward, Jan 8th, 2007 @ 3:19am

    Re: Actually, this is Exactly what Trademark is fo

    So do we now have to redesign the way society works so that the lowest common denominator is satisfied?

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

  5. identicon
    kuronoir, Jan 8th, 2007 @ 3:48am

    Re: Re: Actually, this is Exactly what Trademark i

    what are you talking about, that is how it has always worked.

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

  6. identicon
    The Original Just Me, Jan 8th, 2007 @ 5:14am


    What I think what is happening is that these companies are rolling the dice and betting that a DMCA or copyright violation notice will work because the other person won't know their rights.

    I'm not sure how this squares with words like 'integrity' because you would think they know they aren't sending a valid notification which is backed by the law.

    While I like to believe that most of them are hard working and honest I'm sure there are some slugs out there.

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

  7. identicon
    ScytheNoire, Jan 8th, 2007 @ 5:38am

    contact the EFF

    all i know is if i was with a company, or even just as an individual, the first thing i'd do if i got some bullshit notice is contact the EFF and see how legit it actually is. i'd love to see some billionaire donate a huge amount of money to the EFF so they can send their own lawyer force out to better fight these corrupt corporate mafia lawyers.

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

  8. identicon
    Ryan, Jan 8th, 2007 @ 6:19am

    what pisses me off

    is when they advertise for your URL, and include your URL as the title of their ad.

    Searching for my company's URL in Google will show 3 or 4 ads, that all have a title of our URL.

    Google should make it not allowed to have a URL in your title or ad if it's not the actual URL you're sending people to. It's not that hard to do.

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

  9. identicon
    Charles Churchill, Jan 8th, 2007 @ 7:30am

    How can this not be trademark infringement?

    Using another company's trademark to drive business to you or someone else is trademark infringement. They are popular, so I will use their popularity to get their customers. It's as shady as registering a phone number for a compeititor that rings your line instead of theirs. People looking for them, will get me.

    How is this different?

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

  10. identicon
    justaguy, Jan 8th, 2007 @ 7:59am

    does this mean that Levi jenas must be seperated from ralph lauren jeans in the department stores? does this mean that campbles soup must be seperated from some other brand on the supermarket shelf?

    if it meas so, shopping just became a bit tougher. Googling for something is no different than going to the store, right. if you want jeans, you go to the jeans. if you want ralph lauren jeans, you go to that section of the jeans department. but while browsing, you see CK, levi, Lee, Wrangler, FuBu, South Pole, Jnco.....

    same with all other items. simmilar items are grouped together. are you gonna tell me that if you wanted RL jeans, and saw Levis sitting next to them you'd get confused?

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

  11. identicon
    The infamous Joe, Jan 8th, 2007 @ 8:30am

    Rules of the Road

    Trademarks are designed to keep the *average* consumer from being confused. So, the 10% that might get confused are not average, they are below average.

    Furthermore, if I lease a billboard near my competition's billboard, that isn't violating any trademarks. If I lease a billboard near their store, I still haven't violated any trademarks.

    And, as justaguy has stated, putting a 'no name brand' item on a shelf near a 'name brand' doesn't violate Trademarks. (Though, some of those labels are pretty freakin' similar)

    It seems to me that this would be a no brainer, but what do I know?

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

  12. identicon
    Anonymous Coward, Jan 8th, 2007 @ 8:56am

    sometimes trademarks are meant to confuse

    One publisher makes a habit of placing a cat and the hat logo on the top of Dr. Suess knock-offs.

    Since trademarks are res-sellable, I don't see much consumer protection value to them. I say throw out trademark as an IP ownership issue. There's already laws to handle identity theft, or consumer fraud.

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

  13. identicon
    misanthropic humanist, Jan 8th, 2007 @ 9:03am

    Just to be obtuse (as usual) I'll go with Sohat and Charles here.

    In the UK you cannot create an advert that leverages a competing product or is derogatory towards that product.

    You can't say "Buy Pepsi, it tastes a whole lot better than that minging CocaCola shit"

    You can say "Buy Pepsi, it tastes better than other leading brands"

    These rules may not be common law, but they are upheld by the Advertising Standards Association who have the power to fine advertisers and channels.

    I think Google could do the sensible thing and not permit adverts to reference other trademarked brands they are in direct competition with, unless that term is generic.

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

  14. identicon
    lllkkk, Jan 8th, 2007 @ 9:20am

    what about trademarks that have become common place? kleenex, xerox, band-aid. are all registered trademarks, hwoever because of their association to the product, their trademark has vanished or something.

    does that mean anything?

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

  15. identicon
    The infamous Joe, Jan 8th, 2007 @ 9:28am

    Mr. Humanist

    Here in the States you can use other products in your advertising as long as you state facts and not opinions. The best example I can recall now is Subway versus McDonalds, when they talk about total fat in a sub over a hamburger.

    That being said, I'm pretty sure that they're talking about when you google "Dell" on the side you might see an HP link. I don't think they actually mention the product you searched for. (e.g. It won't say "Buy HP, because Dell sucks." It'll say something like ", Buy online and save 5%-- Free Shipping!"

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

  16. identicon
    misanthropic humanist, Jan 8th, 2007 @ 9:58am

    Re: Mr. Humanist

    Ok Joe, yeah, theres a small difference of UK/US standards at play there, seems like our guys are actually more protective than yours. So as long as it's fact you can legitimately refer to the other brand, I see.

    And I see what you mean about them hooking into search keywords there... the actual ads themselves don't contain competing product references, got it, sorry I misunderstood.

    So how does one company know that another used it's name as a keyword (by the way I'm thinking this would be wrong even more now) or not?

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

  17. identicon
    The infamous Joe, Jan 8th, 2007 @ 10:14am

    Re: Re: Mr. Humanist

    Haha.. I imagine they just google themselves and start suing.

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

  18. identicon
    Joe T, Jan 8th, 2007 @ 5:19pm


    Yes. What this means is that the trademark has been diluted. If someone uses your trademark and you do not defend it (through litigation), and the term becomes commonplace (as did "thermos" for a temperature-retaining beverage container), then you risk losing trademark protection for the mark. There are two types of trademark infringements: Market confusion (when the "average consumer" you've been reading about is confused over the source of the goods/services - such as if you called yourself the IBM Computer Company and sold PC's) and dilution (whereby someone uses the mark in a non-competitive way that still exploits the mark (as in a shirt with IBM's logo on it). Dilution of a famous and universally recognized mark is actionable as well. The dilution aspect makes this tricky - are you diluting the mark if a search ON THE MARK (say for IBM as opposed to "computers") results in competitive products? Probably not, but then I would think it depends on the actual results - if someone is likely to think that one of them is IBM (say the Independent Business Machines company who abbreviates as IBM as well), then I suppose a case could be made.

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

  19. identicon
    Gregg, Jan 8th, 2007 @ 9:01pm


    I tried to take out some AdWords with "Hershey" in them because our bed and breakfast is close to Hershey, PA. Google rejected them, saying I included a trademarked term. I replied that I was referring to the town and a town can't be trademarked, and besides my B&B wasn't really in competition with Hershey's chocolate. Google never responded, never approved the AdWords.

    Maybe I should have sued them...

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

  20. identicon
    Jack, Jan 8th, 2007 @ 10:36pm

    "many companies seem to believe that trademark law means they have full ownership of their trademarked term"

    You mean like how Monster Cable thinks they completely and totally own the word "Monster", judging by the number of lawsuits they've initiated (Google: "Monster Cable" lawsuits.)

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

  21. identicon
    Andy, Jan 9th, 2007 @ 12:02am

    common place marks

    When a mark has become so common place that it is the easiest way to describe a certain product (e.g. aspirin), is called genericide. The word has become the generic term for that type of good, rather than denoting a particular brand.

    Usually genericity is a defense to infringement. Sometimes courts will enjoin the use of a particular mark if it may help contribute to another mark's genericide, but genericide usually happens merely from the public's use of the mark.

    Dilution is a completely separate deal.

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

  22. identicon
    Ken Jennings, Sep 24th, 2007 @ 2:35pm

    Trademark Law

    Think of a subject that you have some depth of expertise about and how exasperating it is to have uninformed amateurs expressing opinions about it based on superficial knowledge. The comments on this board (and maybe 99% of all message boards) fall into that category. 80% of trademark law is fairly straight forward; the other 20% is quite arcane and counterintuitive. "Are the lawyers really that stupid?" someone asked. Of course not. They are trying to represent their client (and not YOU, wonder of wonders) zealously within the bounds of the law.

    So when mr. little upstart high-tech company wants buy mr. big bad corporate america's trademark mark as a search term you don't think it's primary intent is to cause consumer confusion and get people who thought they were walking into your door walking into mine? Of course it is. If you think that's a good idea, be honest about it. Don't try to pretent your a trademark lawyer. Stick with your level of intellect and choose "I want to stick it the man" or "I want to bring down the capitalist pigs and set up a marxist paradise." It's the lawyers job to make whatever arguments serve his or her client's interest. On the message board, there really isn't any need to pretend . . .

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

  23. identicon
    joseph gaitan, Nov 21st, 2007 @ 11:44am

    trademark question

    Well what happens when you type in your company's name into yahoo search engine and you go to the second page browser and you see you company's name for description and you click on that site and you see porn?

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

  24. identicon
    sgy, Jul 28th, 2008 @ 10:30pm

    Re: Google

    Gregg what happened to you is exactly why google needs to be regulated

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

  25. identicon
    Bill, Aug 1st, 2008 @ 12:44am

    trademark law

    Does anyone know: if you own a domain name of someone else's trademarked term; can you use that domain name in any capacity and not be guilty of trademark infringement?

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

  26. identicon
    Duda, Mar 30th, 2010 @ 10:14pm

    Stick to the basics

    I think the only thing which should be seen as infringement is to say your product is such and such and it not actually be such and such. Paying for brand name keywords is not the same as tapping into their phone number. You're paying for those searches, and since most consumers think tissues are Kleenex and cotton swabs are Q-tips (it's exactly the opposite by the way, that is, Kleenex is a tissue but tissues are not Kleenex.) there should not be any confusion. As long as you state on your product page that it is generic or your own brand by the time they are ready to purchase, it should be fine.

    If it really was that big of a fuss to buy clicks with a competitor's brand name, then all you'd need to do is also offer that exact product in your store and then place your brand next to it, much cheaper and labeled as "the same thing." Since your product is not name brand and you're buying the clicks, you actually have some probability of the customer exiting the site right away when they find out.

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

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