Trademarks, Gmail, Adware Bundling Trigger Thorny And Ongoing Legal Issues
The tricky issues range from keyword trademark buys and scanning personal email messages to place contextually relevant ads to bundling pop-up servers with permission-based software. Pending litigation and proposed legislation on these issues is likely to have a major impact on the future of online advertising.
Just weeks before its ballyhooed initial public offering, Google unveiled a controversial new email service and a trademark policy change that could land the Mountain View, Calif. Search giant in a series of ongoing legal actions, according to legal analysts and marketers.
Google's decision to deny trademark holders the right to keyword ownership of their respective trademark has already sparked a few lawsuits. Previously, the company made no definitive stance against bidding on other companies' trademarks. Currently, Google is being sued by American Blind & Wallpaper Co. for the sale of its trademark.
According to attorney Andrew Lustigman, Partner, The Lustigman Firm, P.C., "truthful comparative advertising is permissible and should be encouraged," but he adds that the issue becomes murky when trademarks come into play. Truthful comparative claims give consumers more choice, but it will be up to individual courtrooms to decide whether or not the open sale of trademarks falls under the window of "fair competition."
One online media planner says, "it remains to be seen if this will stand up in court. ... I think it's a crime that Google refuses to do anything about copyright or trademark coat-tailing."
Google's new email service, Gmail, also came under fire last week when California State Senator Liz Figueroa introduced a bill that would require Google to obtain the consent of users before scanning their email messages to serve relevant text ads.
"Telling people that their most intimate and private e-mail thoughts to doctors, friends, lovers, and family members are just another direct-marketing commodity isn't the way to promote e-commerce," Figueroa said in a statement, effectively calling Gmail users' messages "a direct-marketing opportunity for Google."
In other Internet advertising-related legal news, adware company WhenU, which is no stranger to federal and state courtrooms, recently filed a suit against the state of Utah over its Spyware Control Act, which was scheduled to take effect May 3. However, the law's enactment has been delayed because the judge couldn't grant a hearing until May 21.
At the hearing, WhenU will file for a preliminary injunction delaying the law's enactment until after the full trial. WhenU claims that the law is unconstitutional and limits companies' right to commercial speech; the company seeks a declaration that Utah's Spyware Control Act violates the U.S. and Utah Constitutions. Utah's recently passed Spyware Control Act would effectively prohibit adware companies from operating in Utah.
"The Utah law has some serious problems," Lustigman says. The bill is "terribly overbroad," and it "impinges on the right of a company to conduct business where the consumer has agreed to receive marketing messages."
Other anti-spyware bills have been introduced in Iowa and California, and two other bills are circulating through Congress. One of these is Spyblock, the federal legislation that would require user consent in order to collect marketing data from consumers.
Says Lustigman: "My biggest problem with the federal bill is that it doesn't pre-empt the state." He adds that the federal Can-Spam and the Do Not Call Registry both pre-empt state legislatures. "Utah is one state," he says, adding: "Clearly, Internet advertising and these types of issues are national issues."