Brand Protection in the World
of Keyword Advertising
Mike Rodenbaugh – Yahoo! Inc.
Scott Hervey – Weintraub Genshlea
Chediak
American Conference Institute’s Corporate Counsel Forum
Brand Protection in the World of
Keyword Advertising
• Business Facts That Drive The Law
• Schemes Affecting Search Engine Results &
Consequences for Trademark Owners
• Trademarks As Keywords For Paid Results
• Defenses: First Amendment, Fair Use & Nominative
Use (Gripe Sites, Comparative Advertising)
• Spyware as a Tool for Advertisers
American Conference Institute’s Corporate Counsel Forum
2
Topic A: Business Facts That
Drive the Law
• Big $$
– Online advertising industry
•
•
•
•
$16.8 Billion revenue in 2006 (per IAB/PWC)
34% increase from 2005
Should exceed $55 Billion by 2010
2/3 spent on top 4 portals in ‘07, up from 48% in ‘04
American Conference Institute’s Corporate Counsel Forum
3
Business Facts That Drive the Law
• Where is most of this money being spent?
– Search Marketing
– Display Advertising
• Why keyword advertising?
– Allows for very targeted advertising. Ads match
search request.
– Billions of searches conducted daily
– 750 million people used the internet in January
American Conference Institute’s Corporate Counsel Forum
4
Some basic definitions
Intrinsic/Native Search results
Sponsored Results/Keyword Ad
Sponsored Links
Native Search
American Conference Institute’s Corporate Counsel Forum
5
Some basic definitions
Sponsored Links
Native Search
American Conference Institute’s Corporate Counsel Forum
6
Domain Parking
American Conference Institute’s Corporate Counsel Forum
7
More about PPC
• Main ways people reach PPC sites
–
–
–
–
Type in traffic. e.g. torontorealestate.com
Intrinsic search results
Links from content sites
Spam, Spim, Adware
• Every time someone clicks on one of these links,
the domain owner gets paid
– The domain owner (domainer) gets a percentage of
what the advertiser pays the search engine.
American Conference Institute’s Corporate Counsel Forum
8
Domain Registration growth
• Nearly a 100% increase in gTLD registrations from
Oct 2002 to Dec 2005
• Another 40% increase in 2006, to 80 million
• Plus 22.5 million in top 6 ccTLDs (.de, .uk, .nl, .eu,
.it and .fr)
• Plus 250+ other TLDs, with .asia, .tel and many
more to come
American Conference Institute’s Corporate Counsel Forum
9
How PPC Impacts TM Owners
• Domain Name ‘Taste Testing’
– Domain registrations appear for a few days
only to disappear.
• Some Domainers register 10,000+ names a week
• They will track how much traffic (revenue) that
name generates
• They will keep the names that are profitable, and
cancel the registrations of the other
– 5 Day cancellation provision for registrars
American Conference Institute’s Corporate Counsel Forum
10
Schemes Affecting Search Engine Results
& Consequences for Trademark Owners
American Conference Institute’s Corporate Counsel Forum
11
Schemes Affecting Search Engine Results
& Consequences for Trademark Owners
American Conference Institute’s Corporate Counsel Forum
12
Schemes Affecting Search Engine Results
& Consequences for Trademark Owners
American Conference Institute’s Corporate Counsel Forum
13
Schemes Affecting Search Engine Results
& Consequences for Trademark Owners
• Search engine spam – computer generated pages used
to generate PPC advertising revenue.
• Big, growing business that has spawned the ‘domain
tasting’ problem affecting TM owners.
• Generally is not valuable content for users, and engines
will remove or will lower ranking below ‘original’ sites.
• Both Yahoo! and Google have policies to take TM
infringements out of their parked page programs.
American Conference Institute’s Corporate Counsel Forum
14
Topic C: Trademarks As Keywords For Paid
Results And Advertising In Search Engines
• Current search engine policies re trademarks
– Summary of keyword ad programs
– Allow use of or prescreen for trademarks as
keywords?
– Suggest use of trademarks as keywords?
– Reactions to complaints by trademark owners
American Conference Institute’s Corporate Counsel Forum
15
Trademarks As Keywords
Search term: Ford
Ad text:
Compare Escape to Equinox
See For Yourself How Chevy Equinox
Stacks Up Against the Escape Now!
www.chevyfirst.com
GM 100,000—Mile Warranty
Compare New GM Powertrain
Warranty on 2007 GM Cars and Trucks
Now!
www.gm.com/warranty
American Conference Institute’s Corporate Counsel Forum
16
Why are Sponsored Ads a trademark issue?
• Trademark owners do not like to see
competitors’ advertisements appear
• Some trademark owners object to
resellers using the mark as a keyword
• Some trademark owners do not allow
franchisees or affiliates to use the mark to
advertise in competition to the trademark
owner
American Conference Institute’s Corporate Counsel Forum
17
Google’s trademark policy –
general principles
• Google provides advertising space; it does not
“sell keywords”
• Advertisers are responsible for their choice of ad
text and keyword triggers
• Google created TM complaint procedure to try to
balance the interests of TM owners, advertisers,
internet users
American Conference Institute’s Corporate Counsel Forum
18
Google’s trademark complaint
procedure
•
•
•
•
Upon receipt of a reasonable complaint from a
trademark owner,
Google will conduct a limited investigation,
US/Canada:
and disable use of the term
in ad text
Outside US/Can: and disable keywords
and/or ad text
American Conference Institute’s Corporate Counsel Forum
19
Yahoo!’s trademark policy
• Yahoo!’s relevancy guidelines for advertisers allow an
advertiser to bid on a third party trademark ONLY IF
– the advertiser’s website contains content relevant to the
trademark AND the trademark as used in the ad:
• constitutes nominative fair use (either a reseller, or NONCOMPETITIVE information site, such as product reviews,
comparisons, commentary, or news information); or
• is in a generic or merely descriptive manner;
• The trademark must be included in the ad itself in a way
which makes clear to the user the nature of the relevant
content on the advertiser’s website and why the listing
appeared in response to the query.
American Conference Institute’s Corporate Counsel Forum
20
Yahoo!’s trademark complaint
procedure
• US: Upon receipt of a trademark complaint in
the U.S., Yahoo! will delete the ad if the
advertiser does not comply with Yahoo!
relevancy guidelines.
• Outside U.S.: Yahoo! applies local country fair
use principles.
American Conference Institute’s Corporate Counsel Forum
21
Microsoft’s trademark policy
•
An advertiser may use a third party's trademark as a
keyword only when that use is truthful and lawful.
Examples of use that may be appropriate include:
–
–
–
Resellers. Advertisers who sell authentic goods or services
that are lawfully distributed under the trademark.
Information Sites. Advertised sites whose purpose is to
provide information (for example, product reviews) about
goods or services represented by the trademark, and the
Advertiser does not sell or facilitate the sale of any product or
service that competes with the goods or services represented
by the trademark.
Dictionary Terms that are Trademarks. The Advertiser is
clearly using a term only to convey its ordinary meaning in
accordance with its dictionary definition, and the Advertiser's
site does not sell products or services that compete with those
offered under that term when it is used as a trademark by
another party.
American Conference Institute’s Corporate Counsel Forum
22
Microsoft’s trademark complaint
procedure
• Upon receipt of a sufficiently detailed trademark
complaint, Microsoft will conduct a limited
investigation and remove ads that do not comply
with our policies. Due to the differences in
national trademark laws, the assessment of
complaints and the resultant actions may vary
from country to country.
American Conference Institute’s Corporate Counsel Forum
23
Working with Ad Networks and Portals to Police
Infringement
• Notice and Takedown procedures for
Domain Parking and Keyword Advertising
complaints
• http://searchmarketing.yahoo.com/legal/d
mtrademarks.php
• http://www.google.com/tm_complaint_afd.
html
American Conference Institute’s Corporate Counsel Forum
24
Trademarks As Keywords For Paid Results
And Advertising In Search Engines
• Does the sale and use of trademarks as
keywords violate U.S. trademark law?
– An improper attempt to profit from the good
will of others’ trademarks? Or…
– Not commercial (trademark) “use” and
therefore no infringement ?
– Even if “use,” is there a likelihood of
confusion?
American Conference Institute’s Corporate Counsel Forum
25
Trademarks As Keywords For Paid Results
And Advertising In Search Engines
• Requirement for commercial (trademark) use by an
infringer stems from Lanham Act, Sec. 32(1):
“Any person who shall, without the consent of the
registrant – (a) use in commerce any reproduction,
counterfeit, copy or colorable imitation of a registered
mark in connection with the sale, offering for sale,
distribution, or advertising of any goods or services on or
in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive…(b)…shall
be liable in a civil action by the registrant for the
remedies hereinafter provided...”
American Conference Institute’s Corporate Counsel Forum
26
Trademarks As Keywords For Paid Results
And Advertising In Search Engines
• Requirement for commercial (trademark) use by an
infringer may also stem from Lanham Act, Sec. 45:
“… a mark shall be deemed to be in use in commerce …
on goods when … it is placed in any manner on the
goods or their containers or the displays associated
therewith or on the tags or labels affixed thereto, or if the
nature of the goods makes such placement
impracticable, then on documents associated with the
goods or their sale, and … the goods are sold or
transported in commerce, and … on services when it is
used or displayed in the sale or advertising of services
and the services are rendered in commerce …”
American Conference Institute’s Corporate Counsel Forum
27
Trademarks As Keywords For Paid Results
And Advertising In Search Engines
• Key cases have lead to differing rulings:
– Merck & Co. v. Mediplan Health Consulting, Inc.
(S.D.N.Y. 2006)
– Edina Realty v. Themlsonline.com (D. Minn. 2006)
– Rescue Com v. Google (N.D.N.Y 2006)
– Buying for the Home v. Humble Abode (D. New
Jersey 2006)
– 800-JR Cigar v. Goto.com (D. New Jersey 2006)
American Conference Institute’s Corporate Counsel Forum
28
Trademarks As Keywords For Paid Results
And Advertising In Search Engines
• Analogy to pop-up ad cases:
– Courts have held that use of others’
trademark to trigger ads is not commercial
“use” of a trademark:
• 1-800 Contacts, Inc. v. WhenU.com, Inc. (2d Cir.
2005)
• Wells Fargo & Co. v. WhenU.com, Inc. (E.D.
Mich. 2003)
• U-Haul Int’l., Inc. v. WhenU.com, Inc. (E.D. Va.
2003)
American Conference Institute’s Corporate Counsel Forum
29
Trademarks As Keywords For Paid Results
And Advertising In Search Engines
• Likelihood of Confusion Theory
– Initial interest confusion: consumers
mistakenly believe that a sponsored listing
triggered by a trademark search term is
sponsored or affiliated by the trademark
owner and click on the sponsored link based
upon that belief.
American Conference Institute’s Corporate Counsel Forum
30
Trademarks As Keywords For Paid Results
And Advertising In Search Engines
• Under this theory, it is irrelevant whether the
consumer remains confused after he opens the
landing page on the sponsored link. The initial
confusion occurred before he or she clicks on the
sponsored link and it is not “cured” if that
confusion is later dispelled.
American Conference Institute’s Corporate Counsel Forum
31
Trademarks As Keywords For Paid Results
And Advertising In Search Engines
• Leading initial interest confusion cases are
Playboy Enter., Inc. v. Netscape Comm. Corp.,
354 F.3d 1020 (9th Cir. 2004) and Brookfield
Comm., Inc. v. West Coast Entm’t Corp., 174
F.3d 1036 (9th Cir. 1999). But see the Fourth
Circuit’s apparent skepticism about this doctrine
expressed in Lamparello v. Falwell, 420 F.3d
309, 316-17 (4th Cir. 2005).
American Conference Institute’s Corporate Counsel Forum
32
Court
Activity
Infringement?
2nd Cir
•1-800 Contacts v.
WhenU.com,
Sale of marks for popups
Not use in trademark
sense
Northern Dist. of NY
•Merck & Co. v.
Mediplan
Purchasing ZOCOR
as a keyword
Does not constitute a
trademark use.
•Rescuecom v.
Google
Sale of marks as
keyword
Not use – no
allegation of use of
mark on goods, etc.,
or that D’s internal use
is visible to the public
American Conference Institute’s Corporate Counsel Forum
33
Court
9th Cir
•Playboy Enterprises
v. Netscape
Minnesota
•Edina Realty v.
TheMLSonline.com
Activity
Infringement?
Sale of mark as
Defendant used mark
keyword for sponsored in commerce when it
links
sold sponsored links
for terms playboy and
playmate
Purchase of marks as
keywords
While not
conventional, D’s
purchase of search
terms that includes P’s
marks = use in
commerce
American Conference Institute’s Corporate Counsel Forum
34
Court
Activity
Infringement?
New Jersey
•Buying for the
Home v. Humble
Abode
Purchase of mark as
keyword.
Defendant’s use was “in
commerce” and “in
connection with goods or
services” as required by the
Lanham Act.
Sale of mark as
keyword for
sponsored links
“trademark use” of P’s TM
found where D (1) accepted
bids on P’s TM from P’s
competitor’s; (2) ranked paid
advertisers before non paid
listings among the search
results, thereby acting as a
conduit to steer competitors
away from P; (3) suggested
search terms inc. P’s TMs to
P’s competitors.
•800-JR Cigar v.
Goto.com
American Conference Institute’s Corporate Counsel Forum
35
Court
Virginia
•GEICO v.
Google
Activity
Infringement?
Sale of mark as
keyword for
sponsored links
Allegations that D allowed
advertisers to bid on TM as
search terms and to pay for
advertising linked to TMs were
sufficient to establish TM use.
American Conference Institute’s Corporate Counsel Forum
36
Trademarks As Keywords For Paid Results
And Advertising In Search Engines
• Should there be a distinction between
keyword ads that include the trademark in
the body of the ad and those that do not?
• See Geico v. Google, Inc., 2005 WL
1903128 (E.D. Va. Aug. 8, 2005) (finding a
likelihood of confusion only when
trademark appears in heading or text of
the ad)
American Conference Institute’s Corporate Counsel Forum
37
Trademarks As Keywords For Paid Results
Trademark Dilution
• Dilution Theory
– Likelihood of confusion irrelevant.
– Theory: “Blurring” of distinctiveness of the
mark as associated exclusively with
trademark owner’s goods or services occurs
as a result of sponsored listings triggered off
of the trademark when used as a search term.
American Conference Institute’s Corporate Counsel Forum
38
Trademarks As Keywords For Paid Results
Trademark Dilution
– The Trademark Dilution Revision Act of 2006
(HR 683) allows a claim likelihood of dilution,
“regardless of the presence or absence of
actual or likely confusion, or competition, or
the presence or absence of actual economic
harm.”
• Nullifies the Supreme Court’s 2003 ruling in
Moseley v. V Secret Catalogue, Inc.
American Conference Institute’s Corporate Counsel Forum
39
Trademarks As Keywords For Paid Results
Trademark Dilution
– The TDRA allows for a claim of “dilution by
tarnishment” arising from an “association arising from
the similarity between a mark or trade name and
famous mark that harms the reputation of the famous
mark.”
– The TDRA also allows for dilution by blurring; the
“association arising from the similarity between a
mark or trade name and a famous mark that impairs
the distinctiveness of the famous mark.”
American Conference Institute’s Corporate Counsel Forum
40
Trademarks As Keywords For Paid Results
Trademark Dilution
No dilution by blurring or dilution by tarnishment for:
• (A) Any fair use, including a nominative or descriptive fair
use, or facilitation of such fair use, of a famous mark by
another person other than as a designation of source for
the person's own goods or services, including use in
connection with-• (i) advertising or promotion that permits consumers
to compare goods or services; or
• (ii) identifying and parodying, criticizing, or
commenting upon the famous mark owner or the
goods or services of the famous mark owner.
• (B) All forms of news reporting and news commentary.
• (C) Any noncommercial use of a mark.
American Conference Institute’s Corporate Counsel Forum
41
Trademarks As Keywords For Paid Results
And Advertising In Search Engines
• Contributory Infringement
– An untested theory as applied to search
engines and paid listings.
– Requires direct infringement by someone
(advertiser?).
– Requires knowledge or inducement of
infringing activity.
• Search engine liability versus advertiser
liability
American Conference Institute’s Corporate Counsel Forum
42
Topic D: Defenses: First Amendment, Fair
Use, And Nominative Use
• The First Amendment guarantees US citizens the right to
comment and criticize others by name (or trademark).
Exceptions:
• “Use” of a mark commercially, in a manner which is likely
to cause confusion, deception, dilution, or to further
unfair competition
– “Commercial use” issue is same inquiry as in keyword, pop-up
and metatag cases – correct?
• State trade libel or defamation law
American Conference Institute’s Corporate Counsel Forum
43
Defenses: First Amendment, Fair Use,
And Nominative Use
• Fair use defense
– Lanham Act, Sec. 33(b)(4): descriptive fair
use
– Nominative use defense (comparative
advertising or other legitimate need to refer to
trademark owner)
American Conference Institute’s Corporate Counsel Forum
44
Topic F: Spyware as a Tool for
Advertisers
• Spyware - Any software that covertly gathers user
information through the user's Internet connection
without his or her knowledge, usually for advertising
purposes. Spyware applications are typically bundled as
a hidden component of freeware or shareware programs
that can be downloaded from the Internet. Once
installed, the spyware monitors user activity on the
Internet and transmits that information in the
background to someone else. Spyware can also gather
information about e-mail addresses and even
passwords and credit card numbers. Also called adware
American Conference Institute’s Corporate Counsel Forum
45
Spyware as a Tool for Advertisers
• Specific Laws Addressing Spyware
– California (Bus & Prof §22947); Texas (Bus. & Comm.
§48.001); Washington (Rev. Code §19.270)
• Other Applicable Statutes
– New York Gen. Business Law §349.350 & common
law trespass to chattels; Texas Deceptive Trade
Practices / Consumer Protection Bus. & Comm.
§17.47; California Penal Code §502 and B&P §17500
(false advertising); Washington Consumer Protection
Act
American Conference Institute’s Corporate Counsel Forum
46
Spyware as a Tool for Advertisers
• Applicable Federal Law
– 18 U.S.C. § 2511; 18 U.S.C. § 2512 18 U.S.C.
§ 1030;
American Conference Institute’s Corporate Counsel Forum
47
Spyware as a Tool for Advertisers
• FTC Action
– In re Advertising.com: consent order against
company who did not adequately disclose
adware which collects user information and
serves substantial pop-up ads.
– FTC v. Odysseus Marketing: settlement with
company who did not adequately disclose
adware which collects user information,
replaces search engine results and serves
substantial pop-up ads.
American Conference Institute’s Corporate Counsel Forum
48
Spyware as a Tool for Advertisers
• State Action
– New York’s lawsuit against DirectRevenue
and the settlement of Cingular Wireless,
Priceline.com and Travelocity.com
– Texas and California’s lawsuit against Sony
BMG Music Entertainment
American Conference Institute’s Corporate Counsel Forum
49
Thank You
American Conference Institute’s Corporate Counsel Forum
50