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Just An Online Minute... Utah, Land Of Dumb Internet Laws?
by Wendy Davis, Tuesday, April 10, 2007, 1:30 PM

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Utah has quietly passed a new law that aims to regulate search advertising by prohibiting marketers from bidding to appear as sponsored links when people search for names of their rivals. For instance, the law would ban Dell Computer from bidding to appear as a paid search ad when search users query on the term IBM.

"In some cases people invest millions on their trademark, only to have their customers' on-line word searches shanghaied by a pirate who bought off the search engines," wrote Utah Senator Dan Eastman on his Web site. "In my mind this amounts to little more than a creative new kind of identity theft."

Utah has moved to ban this so-called identity theft even though federal courts have given the nod to such use of trademarks. In at least two separate lawsuits, courts have ruled that Google didn't violate companies' trademark rights by allowing their names to be used as keywords that trigger rivals' search ads. In a case brought by Geico, a federal judge found after trial that there was no proof consumers were confused by such ads -- long the hallmark of federal trademark infringement. Google also won a case brought by Rescuecom; that case is now being appealed to the Second Circuit.

The Electronic Frontier Foundation and others have come out strongly in favor of allowing trademarks to trigger paid search links, arguing that such ads benefit consumers.

The legislation isn't the first time Utah has imposed restrictions on marketers that go beyond federal law. Last year, the state also created a controversial do-not-email-registry that bans marketers from sending e-mails for anything considered harmful to minors to addresses on a registered list. Utah currently faces a lawsuit over that law.

In fact, the state is quickly developing a reputation for pointless Internet laws. "Utah," writes law professor Eric Goldman on his blog, "has an unrivaled track record of enacting dumb, regressive, unproductive Internet laws."

1 person recommends this article. 

9 comments on "Just An Online Minute... Utah, Land Of Dumb Internet Laws?"

  1. Josh Lovison from MediaPost
    commented on: April 11, 2007 at 12:48 PM
    Tom,

    In all fairness, I've seen Obama's campaign site listed in the paid ads when searching for "Hillary Clinton" on Google.

    All's fair in love and war. And campaigning.

  2. Bob Gordon from The Auto Channel
    commented on: April 11, 2007 at 12:19 PM
    What about a comparison of the searched for brand with its competors...just how deep does this non compete go and does it also mean that searches for content must return single brand editorial???

    I am glad to have a choice of returns to my enquiries...INTERACTIVITY can be the antedote to limited and unwanted information

  3. steve plunkett from M/C/C
    commented on: April 10, 2007 at 4:32 PM
    next thing you know, I'll get sued for using the same keywords.. blah.. stupid Utah!

  4. Tom Daly from Coca-Cola
    commented on: April 10, 2007 at 3:55 PM
    Maybe Senator Obama can enlist Senator Eastman for some help. It seems that if a person were to search "Obama" on Yahoo!, a text ad for HumanEvents.com ("leading the conservative movement") promises "Barack Obama Exposed" and similar headlines.

    I can hear the indignation among Senator Eastman's staff right now.

  5. Chicago Media from Chicago
    commented on: April 10, 2007 at 3:26 PM
    Tyler poses a question I have asked about for years... Catalina makes their money by selling branded terms. I guess since it is not on the big, mean internet it is ok.

  6. Victoria Shishkoff from Clear Channel
    commented on: April 10, 2007 at 3:11 PM
    Can't believe an elected official got paid to make this decision. A new kind of identity theft? What about advertisers that compare brands in their own ads? Not my favorite advertising angle, but Pepsi does this all the time.

  7. Dave Rudey from Cars.com
    commented on: April 10, 2007 at 2:43 PM
    I love that last quote from Eric Goldman.

    CBS can run ads for their TV shows on ESPN. McDonalds can put a billboard up next to a Burger King. I would think this also might run against the 21st ammendment.

    Or not? I don't know for sure. But the right for a business to advertise against its competiton is paramount to providing people good products.

  8. Marc Bodner from The Bodner Consulting Group
    commented on: April 10, 2007 at 2:33 PM
    I appauld Utah. When people search for something, especially branded items, they want to see information on that brand. Marketers spend millions to receive that awareness and should not have to fight with a search engine to achieve the goal of brand awareness. However my enthusiasm for what Utah has done is from a consumer point of view. The internet has lost one of its great properties . . .a warehouse of information that users select as they see fit. Consumers now have to plow through all types of applications to get what they need. Most internet users have trained their eyes to ignore the advertising and focus on the content they desire. It's nice to see someone is thinking of the user, and not how to get the user to do something they hadn't intended.

  9. Tyler Pennock from Chandler Chicco
    commented on: April 10, 2007 at 2:23 PM
    Sometimes I get a coupon on my grocery receipt for a competitive product to something that I've bought. Would this now be illegal as well?

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