• by Wendy Davis , Staff Writer @wendyndavis, April 10, 2007

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."