What is Google Adwords?
Google is currently the most widely used search engine in the world. Millions of businesses use the search engine to promote themselves and attract customers. Google’s search engine allows Internet users to locate web sites that match certain “keywords” they enter into a search box. In response to a search, Google provides a list of links of relevant sites. In addition to the basic search engine, Google also offers a keyword-triggered program called Adwords. Advertisers participating in Adwords purchase or bid on certain keywords, paying Google for the right to have links to their websites displayed in the Sponsored Links section on the right hand side of the screen whenever an Internet user searches for those words., Google charges a fee to the Adwords participant for every time an Internet user clicks on the sponsored link.
Adwords are different from meta tags. “Meta tags” are pieces of HTML source code which contain keywords used to describe the contents of a web page. There are three types: (1) those which describe the content of a web page; (2) those used by search engines to determine whether a particular web page is relevant to a search term; and (3) those which indicate which web pages are not relevant. The meta tags contain keywords used by the search engine to produce a results list. They are not visible to any user, as in the case of Adwords. Adwords are also different from using another’s trademark directly in the advertisement, which is much more problematic.
Businesses have been battling with their competitors over trademark disputes ever since Google’s Adword program began. Often, a business owner will pay to use its competitor’s trademark as an Adword on Google, such that whenever a potential consumer types in the competitor’s name into the search engine, the business owner’s name will appear in the list of Sponsored Links as well. Competitors often allege that this constitutes trademark infringement because it is intended to confuse their consumers and divert potential consumers and causes their trademarks and brand to lose distinctiveness, and in turn, their businesses to lose profit.
Generally speaking, trademark law grants the owner of a trademark the exclusive right to use the trademark to identify his or her goods/services and to either authorize or prohibit others from using the same or similar mark, on the same or similar goods/services to prevent consumer confusion. [To learn more about trademark law, please see the “Trademark Basics” article in the FAQs section of our website].
For example, when your competitor uses your trademark as an Adword to benefit its own business, you could make the argument that the competitor is making an unauthorized use of your trademark, and that it is creating confusion in the minds of your potential consumers as to whether or not your competitor’s goods and services are really from the same source as yours. The question that remains to be completely settled is, does this argument work?
Is it legal for my competitor to use my trademark as a Google Adword or Meta Tag?
The law as to whether it constitutes trademark infringement for a competitor to use your trademark as an Adword is unsettled. The Lanham Act protects valid trademarks from being used in commerce by others in a way likely to cause confusion or to deceive the public. Thus, to be infringing, the use by a competitor of your trademark as a Google Adword must be considered use under the Lanham act, and it must be likely to cause confusion amongst consumers as to the source of the goods/services.
Use in Commerce Courts disagree as to whether use of a trademark as an Adword constitute use in commerce under the Lanham Act. On one hand, federal district courts in the Second Circuit, which covers Vermont, New York, and Connecticut, have consistently held that Adword and meta tag usage is not use in commerce and have found both Adword purchasers and Google itself not liable for trademark infringement through the use of trademarked terms in Google’s Adwords program. On the other hand, federal district courts in Illinois Minnesota, Pennsylvania, New Jersey, and Ohio have held that Adword and/or meta tag usage is use in commerce and may lead to trademark infringement under the Lanham Act. A court in the Southern District of Ohio has even gone so far as to hold meta tag usage is per se trademark infringement, meaning that simply using a trademark as a meta tag is infringement, even if there is no likelihood of consumer confusion.
Consumer Confusion Even when a court decides that Adword usage is use in commerce for the purposes of the Lanham Act, there is a lack of consensus as to whether or not the use is likely to cause consumer confusion. The issue can best be demonstrated by examining a recent case where Geico sued Google for selling the use of its trademark to its competitors. The big question in the case is whether, when a consumer sees as a Sponsored Link, “California Car Insurance- Low Rates, instant quotes, fast local service for cars & trucks, www.allaccess-insurance.com California,” does he or she really think it is a website sponsored by Geico? And if that consumer were to access the link, would he or she really believe they were on Geico’s site? Google says the answers to those questions are “no”. Trademark owners disagree, claiming that such use of their marks causes “initial interest confusion.”
The idea of Initial Interest Confusion arose in Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999). The dispute involved West Coast Video’s use of another video store’s trademark, “MovieBuff” as a meta tag. The Court of Appeals for the Ninth Circuit found that the use of another’s trademark as a meta tag resulted in what they referred to as “Initial Interest Confusion.” Initial Interest Confusion can be explained as a sort of ‘bait and switch’ luring away of a producer’s potential consumers by initially passing off its goods as those of the producer’s, even if the consumer’s confusion later goes away. For example, even though the results that popped up after searching “moviebuff” on Google included both businesses’ websites, the fact that some consumers might end up on West Coast Video’s website instead was problematic. Because West Coast’s website was so similar to MovieBuff’s, many consumers might initially be confused and not realize they are on the wrong website, or might realize but decide to go ahead with the new video store, essentially luring MovieBuff’s consumers away.
This concept of Initial Interest Confusion has been re-visited by courts in their analysis of whether or not the use of another’s trademark as an Adword also constitutes infringement. Many courts have analyze the issue the same as it was in Brookfield, arguing that using another’s trademark as your Adword is no different than using another’s trademark as a meta tag, and is infringement. However, other courts have held differently, disagreeing with Brookfield, even as to its analysis of the use of trademarks in metatags.
For example, in J.G. Wentworth, SSC LP v. Settlement Funding LLC d/b/a Peachtree Settlement Funding, the defendant, plaintiff’s nearest competitor in the settlement fund industry was accused of infringing plaintiff’s trademarks by using them both in Google’s Adword program and in its meta tags. 2007 U.S. Dist. LEXIS 288. In this case, the Court found that the defendant’s use of plaintiff’s trademarks in the Adwords program and in its meta tags did not result in any real likelihood of confusion amongst consumers. The court disagreed with the decision in Brookfield, stating that it was a “mischaracterization of the operation of Internet search engines,” because search engines do not actually take the user directly from the search box to competitor’s website. Instead, a link to the defendant-competitor’s website appears on the search results page as one of the many choices for the potential consumer to investigate. Each link appears as its own separate distinct link, such that potential consumers have no opportunity to confuse the services, goods, links, or websites that appear as a result of their search. The consumer, in reality, sees both a link to the website of the business that it sought, and links to various competitors’ websites. The consumer ultimately has the final choice as to which site he or she ends up visiting.
The Utah “Trademark Protection Act”
In March 2007, the Utah legislature enacted Senate Bill 236, also known as the “Trademark Protection Act”. This new law prohibits businesses from purchasing another business’ trademark as a keyword for any ad displayed in Utah, and for any advertiser or keyword vendor located in Utah. It is too soon to know the impact of the Utah law on Utah businesses or on nationwide trends regarding the purchase trademarks as keywords, but this development is definitely something to watch.
There is no clear answer when it comes to Adwords and Meta Tags Thus, other than the Utah law, there is no clear answer to the question of whether or not it violates the law for another company to use your trademark as an Adword or meta tag, or whether or not it violates the law for Google to sell your trademark to that company. Liability may depend on the jurisdiction in which the keyword purchaser or meta tag user is located. What is known, however, is that Google and its competitors make millions from doing keyword sales; much will be at stake when the answer is finally flushed out in the courts.
What can do if my competitor uses my Trademark in the text of his Advertisement?
In contrast, the law surrounding use of a competitor’s trademark in the text of a Google Adwords advertisement is much clearer. Going back to the Geico example, Geico was able to prevail with respect to the use of their trademarks in advertisement text. Google’s policy is to prohibit this type of use anyway. In general, using a competitor’s trademark directly in the text of your own advertisement inevitably constitutes use in commerce under the Lanham Act, and also is likely to confuse consumers as to the source of the goods or services being advertised.
For an example outside of the keyword realm, if an advertisement for a Kia, a lower-end automobile, were to also include a Mercedes, a higher-end automobile, driving on the same road in the advertisement, consumers may be likely to be confused, thinking that the Kia brand is a new line created by Mercedes. Many consumers may actually choose to purchase the Kia, being confused into thinking that it is more high-end than it actually is. Unlike with Keyword advertising, the brands are not being listed in separate distinct links in this case, but rather are being depicted in the exact same screen.
On the other hand, it is generally legal to engage in “comparative advertising”. In comparative advertising, a business uses a competitor’s trademark in to compare its product to the competitor’s, rather than to trick consumers into believing its product is from to the same source as its competitor’s product. For example, many laundry detergent advertisements show two washing machines along with two equally filthy items of clothing. The ad shows the results after washing the item with brand A as compared to brand B. The goal of the advertisement in this case is to show that brand A is a better product than brand B. Use of a competitor’s trademark in this context, solely for comparative advertising, is legal so long as it is not false or deceptive as provided in Section 43(a) of the Lanham Act.
An interesting case arose with LegalPPC, a California based Internet search engine marketing company specializing in creating online advertising campaigns for professionals which utilizes the Google Adword program as a part of servicing its clients. While working on one client’s campaign, Google allowed LegalPPC to use “Kenmore” as an Adword but not in the text of any actual advertisements because it is a trademark of Sears Roebuck. However, LegalPPC was not seeking to use the word “Kenmore” to refer to the Sears Kenmore brand of appliances or to confuse consumers, but rather it was seeking to use the word to refer to Kenmore, Washington, the city its client was targeting.
This situation raises some interesting questions. Should Google allow us to LegalPPC to use “Kenmore” as a search phrase? If so, why not also then allow us to use it in an ad? The likely answer to would be that “Kenmore” can be used as a search phrase because, as analyzed in JG Wentworth, no consumer who searches “Kenmore” looking for an Internet marketing company is going to be confused by a link to Sears’s Kenmore brand appliances. Second, Google probably should allow LegalPPC to use “Kenmore” in the text of their advertisement because it also will not confuse consumers with Kenmore brand appliances if it is listed on LegalPPC’s website as “Kenmore, Washington”. The result here, as to Google’s decision to prohibit LegalPPC’s use of “Kenmore” in its advertisement, can probably be chalked up to Google’s policy of removing advertisements containing trademarks of other companies almost automatically. LegalPPC’s best bet in this scenario is to argue that it is uses the term “Kenmore” not as a source-identifier, but as a geographically descriptive term. However, Google, a private entity, probably does not have any obligation to allow businesses to advertise in any certain way on their Adwords service.
How can I take advantage of Google’s Adwords Program while still limiting my potential liability for trademark infringement?
The issue of whether or not purchasing another’s trademark for use as a Google Adword constitutes trademark infringement has no clear-cut answer. As a result of the differing interpretations by the courts, businesses that purchase the trademarks of a competitor in order to trigger Internet advertising are at risk of liability for trademark infringement. Further confusing things, liability may depend on the jurisdiction in which the keyword purchaser is located, at least for the foreseeable future. However, there are a few steps that any business owner thinking about purchasing a Google Adword can take to minimize potential liability under trademark law.
1. Consider purchasing a general or descriptive term instead of the exact trademark of your competitor. For example, purchasing “athletic shoes” or “sneakers” as keywords is less likely to infringe someone’s trademark than the purchase of “NIKE” or “CONVERSE.”
2. Perform a trademark search before purchasing the term. To the extent the competitor has not used or registered the mark, the risk that the competitor will launch a lawsuit may be lower than if the competitor has registered its trademarks.
3. Do not use the competitor’s trademark in the text of any advertisement. Courts generally find this practice infringes on the plaintiff’s trademark.
Google’s Policy Google does not arbitrate trademark disputes, but they will perform a limited investigation of “reasonable complaints” about the use of terms that may be trademarks in advertisements, which are clearly marked as Sponsored Links. They only investigate the use of a trademark in ad text. If they find a trademark being used in the text of an advertisement by an advertiser who is not the trademark owner, they will require the advertiser to remove the trademark and prevent them from using it in ad text in the future. They do not, however, take action on objections to the use of trademarks in keywords, or Adwords. Google holds the advertisers who use the Adwords responsible for the possible legal repercussions of their advertising. For more information on Google’s Trademark Complaint Procedures, please visit www.google.com
Are Your Trademarks Being Used by Other Companies on Google? - To learn more about this author, visit Daliah Saper's Website.
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