Commentary

Court Ruling Could Point To Hole In Google's PPC Ad Trademark Infringement Policy

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Does a loophole exist in Google and in U.S. trademark policies? In one instance, the company Experian Information Solutions bought a variety of phrases containing two keywords trademarked by its competitor Fair Isaac Corporation. Experian didn't use the words in paid ads, but to drive search traffic to its PPC ads instead. Fair Isaac then sued Experian for trademark infringement, but the judge ruled in favor of the defendant, noting that in order to prove infringement Fair Isaac would have had to show that consumers were confused about the ad they clicked on.

It appears Google's policy may suggest companies can bid on, but not insert keywords in a paid click ad for competitive reasons, unless the two companies have a direct relationship. Since evidence of consumer confusion is what's needed to prove trademark infringement in a court of law, it's unlikely that could happen if the words didn't actually appear in the ad, argue two White & Case attorneys working for Experian.

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The legal landscape in the United States remains unsettled, so companies shouldn't feel free to purchase competitors' trademark keywords and use them in ads, according to White & Case Attorney Christopher Glancy. "The fact of the matter is someone could still file a trademark suit and survive a motion to dismiss simply based on the purchase of the keywords, but this case does suggest the direction the law is moving," he says. "There ought to be a clean rule that says the purchase of a keyword, alone, is not trademark infringement, as the European Court Justice seems to deem."

The Advocate General of the European Court of Justice issued an opinion in September that keyword advertising is not trademark infringement under European Law, Glancy explains.

The Court of Justice has yet to rule on it, but the Advocate General's opinion submitted to the court suggests keyword advertising is no longer a trademark infringement and that the European Union will adopt this new policy, Glancy says. "This case may signal a similar direction in the United States," he says. "We now have three published decisions that have found no infringement [from] the mere purchase of the keyword."

As for Google, in the United States the search engine doesn't monitor the use of trademarked terms as keywords, according to a source. The source goes on to explain that Google does allow some ads to serve up with a trademark keyword in the ad text if the ad is from a reseller or from an informational site. (You can find the policy here.)

If further investigation finds the advertiser uses the trademark in the ad text as a competitive weapon, using it critically or negatively, Google will require the advertiser to remove the trademark and prevent them from using it in similar ad text in the future.

White & Case Attorney Jack Pace explains Experian began purchasing variations of the keywords Fair Isaac and FICO in 2002. Ads, which did not contain the words, ran on Google, Yahoo, MSN and Ask search engines. In 2005, the company curtailed its PPC campaign substantially, limiting the number of keywords it purchased. Experian continued to purchase a few keywords until mid-2007, but stopped because Fair Isaac had initiated the lawsuit.

The significance in the Experian District Court trial, which concluded on Nov. 20, suggests a growing understanding that keyword advertising, alone, does not likely cause consumer confusion. There must be something more. The U.S. District Judge issued a ruling on the keyword-advertising claim Nov. 25. The litigation, ranging from keyword trademark infringement, to antitrust claims, ran for about three years.

1 comment about "Court Ruling Could Point To Hole In Google's PPC Ad Trademark Infringement Policy".
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  1. Dave Woodall from fiorano associates, December 12, 2009 at 3:42 a.m.

    Maybe I'm just too literal but how can purchasing a competitor's trademarked word or phrase NOT be considered infringement? Maybe the trademarked word or phrase doesn't show up in its visual or audible form in a competitor's ad but it does seem like a form of confusion when the consumer searches on "Product A from Company Y" and is returned an ad for "Product B from Company Z".

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