Keyword Advertising A Tricky Situation

Does the buying of keyword advertising trigger trademark infringement lawsuits?

The short answer is “yes, it can.” But while there have been many instances of such matters being aired in court, judges across the country have struggled to keep current with the matter and have issued less than uniform guidance. To understand the keyword advertising dilemma, it is important to first understand what keyword advertising is.

Keyword advertising, a multibillion-dollar business, refers to paid advertising on the Internet that links specific keywords or groups of keywords. If you have ever used the Internet search engine Google, you know that typing a phrase such as “sporting goods” into the search area would produce advertising links for sporting goods providers on the side of the screen.

Companies pay for the right to certain words so that customers click on the advertisements that lead to their Web sites. Often, companies pay for each “click-through” that is generated. But the controversy with this type of advertising occurs when companies buy a keyword that is part of a competitor’s trademark, bringing into play the Lanham Act.

In part, the Lanham Act is meant to protect the holder against those who “without the consent of the registrant, use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive.”

To establish that keyword advertising violates the Lanham Act, it has to be proven that the trademark was actually used and that the general public would be confused about who is offering the goods or services in question.

Second Circuit courts have often found that the use of a keyword on its own is not a violation of the Lanham Act. Yet outside the Second Circuit, courts have often found the opposite to be true.

For example, in April 2008, the Eleventh Circuit ruled against a company who used a competitor’s trademarks within its invisible meta tags of its website. The court ruled that such practices were in fact trademark infringement.

Microsoft, Google and Yahoo! all sell keyword advertising and have been dragged into some Lanham Act court cases.

When it comes to companies protecting themselves against competitors misusing keyword advertising, it is important to track how your trademarks are being used on the Web. When a violation is suspected to have taken place, one should complain to a search engine, many of who often have their own complaint procedures in place. Experts also recommend that companies make sure they are the highest bidder for their advertising keywords that represent their trademarks to prevent others from using them.

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This entry was posted on Wednesday, November 3rd, 2010 at 7:59 pm and is filed under Business & Corporate Law, Intellectual Property, Litigation, Technology. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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