There have been numerous legal cases involving companies using their competitor’s trademarked names as keywords in meta tags and banner ads. The most recent threat to sue comes from American Blind & Wallpaper Factory in Plymouth, Mich (ABWF).

ABWF has not yet filed suit against search engine leader Google, but has been sending cease-and-desist letters since July 2002. Google responded by asking a California court to rule that its advertising methodology is legal. Google then filed a complaint against ABWF in the US District Court, Northern District of California on Nov. 26, 2003, asking for “declaratory judgement of non-infringement.”

Google and Trademarks

The issue at hand is based on Google’s Adwords program, which allows marketers to bid on keywords. ABWF claims that Google allowed one of its competitors to bid on 36 combinations of keywords that are specifically trademarked to ABWF.

This isn’t the first case Google has faced regarding the issue. Last year, it lost two cases in France to companies Viaticum and Luteceil for trademark violation, netting those companies a combined $89,000 judgment.

The legal issues of using a competitor’s trademark in your own online marketing campaign has come up in the past, though the rulings lacked an overall consistency.

First Cases

The first case brought up in court involved Enterprises Inc. V. Calvin Designer Label where Playboy sued two adult sites for using the terms “Playboy” and “Playmate” repeatedly to increase their popularity in search engines. The sites also used the terms in their domain names, giving the impression that the sites were endorsed by Playboy. The court ruled in Playboy’s favor and the two adult sites were forced to change their site content.

Not long after, Playboy sued Playboy Bunny Terri Welles for using the word “Playboy” within meta keyword tags on her website. Welles claimed that she had legally earned the title of Playboy Bunny and should be entitled to use the trademark on her website. The court agreed with her.

Two years later, another 2 cases were brought to court. This time, instead of meta tags, keywords for banner placements were the subject. In Estee Lauder, Inc. v. Fragrance Counter, Inc., Estee Lauder sued iBeauty.com for using the terms “Estee Lauder”, “Clinique” and “Origins” as keywords for their banner advertisements on Excite@Home. The case was settled awhen iBeauty.com agreed to discontinue using these keywords.

In Playboy Enters. v. Netscape Communs. Corp. , other adult sites were using the terms “playboy” and “playmate” as keywords for their banner advertisements. This time the court ruled against them, citing the terms are part of the English language.

More Recent Cases

More recently in July 2002, J.K.Harris & Co. v. Kassel, Case No C 02-0400 CW (Oakland, CA) was heard. In this case, the plaintiff, sued the defendant, Taxes.com, for frequently using the plaintiff’s company name in its website to command a higher listing on search results when searching for J.K. Harris. This differs from the above mentioned cases in that instead of meta tags and keywords, the defendant used J.K.Harris’s corporate name in allegedly truthful text, which should be protected by the First Amendment. The court, however, ruled differently, believing this to be a case of trademark infringement, even though similar types of criticisms would be allowed in print. Taxes.com was told to alter those pages that mentioned J.K. Harris. Kassel then requested a rehearing, and in March 2003, the ruling was revised. The final verdict ruled that Taxes.com conveyed truthful information about federal investigations on J.K. Harris, and that did not violate the trademark law as the J.K. Harris name was used only in order to make statements about the firm.

Finally, in February of 2002, Mark Nutritionals filed lawsuits against AltaVista, FindWhat.com, Kanoodle.com, and Overture. The company sought $440 million in damages for alleged trademark infringement and unfair competition. The company claimed that because of the paid inclusion practice, competitors could bid on the term “body solutions”, a prominent trademark of Mark Nutritionals. They maintained that because so many competitors had bid on “body solutions”, their website had been buried in the results. In fact, their website did not appear in the first page results of any of the search engines they sued. They attributed this to the “bait and switch” technique where a user would perform a keyword search, but click on a competitor link thinking that it would take them to Mark Nutritionals’ Body Solutions site. Once at the competitor site, they might be persuaded to buy the competing product instead of Body Solutions. While I haven’t heard anything about the outcome of this case, it sounds remarkably similar to the ABWF case.

Monitoring Trademarks

So, even now, there does not appear to be a general consensus as to what constitutes online trademark infringement. As of early 2002, both Overture and Findwhat started monitoring all keywords submitted and actively reject any that might be inappropriately linked. Google also monitors marketers’ campaigns through Adwords, though not as strictly.

It will be interesting to see how this case plays out, because if the US courts rule against Google’s advertising practices, it will have a serious effect on the entire search engine marketing industry which is estimated to be $2.1 billion this year - growing to $2.6 billion in 2005.

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Categories: Search Marketing