• by Matt Naeger , August 24, 2004

The explosion of search marketing--like the rise of the business Internet itself--is transforming everything it touches. So it's no surprise that now search is having a major impact on the world of trademark law. What changes does your company need to be aware of? And what can you do to protect your valuable intellectual property assets?

The Internet Reinvents Intellectual Property

In many ways, the Internet seems almost designed to facilitate trademark infringement. Both text and graphical elements are easy to copy and "repurpose." Identity is easy to conceal. Theft can occur very quietly, and both evidence and culprits can disappear with little trace. In addition, the ease of forming partnerships practically assures trademarks will appear in contexts beyond those originally planned for.

Trademark infringement has been an issue since the Web's earliest days. Industrious would-be entrepreneurs cybersquatted on corporate domain names, hoping for lucrative payouts that in most cases never came (intellectual property laws were interpreted and in some cases rewritten to protect rightful trademark owners).

Trademark Law and Affiliate Programs

Trademark law in its basic form is designed not to protect the rights of the owner of the mark, but instead to prevent confusion to the reasonable consumer. Affiliate marketers are heavy users of search engine marketing, and yet most affiliate programs do not have a method in place to manage trademark rights for their customers. As a result, affiliates and trademark owners are constantly competing for ad placement on trademarked terms. The evolution of this model has created a continually increasing cost per acquisition for both the affiliate and the holder of the mark. Although on the surface it would make sense for the search engines themselves to solve such an issue, it is also important to understand that as the bid costs go up for the terms, so does the search engine's revenue. This is the same reason the engines have been slow to adopt regulations to protect a company's trademark rights.

New Motivation for IP Theft

In today's red-hot search marketing climate, some companies have resorted to questionable business practices in an effort to boost search engine rankings, for example, using competitors' trademarks to elevate their own results. Companies must be aware of what their competitors may be doing--or even, what their own overzealous search marketing employees and consultants might be cooking up--with regard to trademark infringement and its legal ramifications.

Couldn't the search engines themselves help avoid the confusion by refusing to let companies bid on trademarks they themselves don't own? Sure they could--if they were content to give up the revenue they make on these keywords, which are often hotly contested and thus commensurately high priced. And cracking down on pay-per-click keywords--if the search engines were inclined to do so--would still leave open the question of using competitors' trademarks to influence natural (organic) search results.

This issue--the responsibility of the search engines themselves--may soon be resolved in the courts, as a retailer recently filed a trademark infringement lawsuit not against its competitor but against Google, for facilitating the practice. While you might think a lawsuit would result in Google's becoming more conservative in this area, in fact the opposite has occurred. Google recently announced it was allowing anyone to bid on trademarked words, with no restrictions. Its legal strategy is to wash its hands of any responsibility for policing trademarks (much as community forum sponsors, for example, take no responsibility for reviewing or editing user postings, thus relieving themselves of liability for libelous or slanderous language).

What You Should Do

If yours is a large company, policing all your trademarks in all their online search contexts could be an overwhelming burden requiring near-infinite resources; it's simply not practical.

However, there are concrete steps any organization must take in order to proactively defend its trademarks.

Implement a complete organic SEO campaign on your site to protect the free organic space and compete with the costly paid listings.

Create a cease and desist policy to enforce your rights when a violation of your trademark occurs.

Put a strong statement of your trademark protection policy on your Web site and provide a place for people that have been led astray by a violator to report the violation.

When creating an affiliate agreement, include a keyword "do not purchase" list covering trademarks.

As the world of search develops with new products such as local search, it becomes increasingly important to make sure trademark policies are firmly in place. The issues discussed here can be dealt with through proper up-front planning and a clear definition of how to best protect individual trademark rights.