Why Trademark Bidding Will Persist

Last year, the search world anxiously awaited the results of the Google-Geico trial, to learn whether courts would allow marketers to continue to bid on trademarked terms -- that is, to pay to appear as a sponsored listing when consumers typed in a competitor's name.

When Federal District Court Judge Leonie Brinkema dismissed one of Geico's key charges against Google, many took the decision as signaling judicial approval of the practice.

But the actual decision was far narrower, at least according to Geico's lead lawyer Charles Ossola. Speaking at a Search Engine Strategies panel Wednesday about the decision, "Brand Summit: Life After Google-Geico," Ossola told the audience that Brinkema didn't applaud Google. Rather, she held that Geico hadn't adequately proved that consumers were confused by competitors' ads. She also ruled that ads that themselves mentioned the Geico name did violate the insurance giant's trademark, but hasn't yet determined whether Google is liable for such infringement.



Brinkema has not yet issued a written decision, so it's hard to fully interpret the case; it's one of the very few lawsuits brought in the United States dealing with search engines and trademarked terms.

Nonetheless, at least for now, it's clear that trademark bidding will continue -- mainly because it's effective. A Hitwise study prepared at the request of panel moderator Jeffrey Rorhs, Optiem LLC president, showed that branded keywords perform far better than generic ones.

For the four weeks ending Feb. 19, only 58.4 percent of searches on the word "paint" resulted in a click. But more than 90 percent of searches resulted in clicks on the terms associated with name brands: searches on "Behr paint" resulted in clicks 97.18 percent of the time; "Benjamin Moore paint" came in at 93.48 percent; "Sherwin Williams paint," at 95.65 percent; and "Ralph Lauren paint" at 90.91 percent.

The higher click rates alone give search marketers an incentive to continue to use trademarked terms, which might explain why there have been so few lawsuits about trademark bidding. If many marketers see a benefit to bidding on competitors' keywords, and are doing it themselves, they can hardly complain when a competitor does the same.

Next story loading loading..