By Rich Stim
Keywords (or adwords or keying) are terms (words or phrases) sold by search engines to advertisers. When an Internet searcher types the keyword into a search engine, an advertisement related to the keyword appears. For example, typing the keyword "patent" might trigger specific ads by Nolo for its patent products. Trademark issues sometimes arise when keywords are trademarks — for example a competitor of Nolo buys "nolo" as a keyword. As a general rule, the practice is not illegal in the United States (although results are not always predictable when parties litigate). Using a rival company's keyword is much more likely to become illegal when the competing company's name also appears in the paid advertisement that is triggered by the keyword.
EXAMPLE: MotelCo buys the keyword 'Hotelco', the trademark of a competitor. When an Internet searcher types in 'Hotelco,' a paid advertisement for MotelCo appears. This practice has been found to be legal in the U.S. But if the ad that is triggered says something like "Get HotelCo Services at Half the Price" or "Hotelco Services Available Here," then Motelco has gone too far and is liable for trademark infringement.
Are Consumers Confused?
The key issue, as with most trademark disputes, is whether consumers are confused. When consumer confusion is not found, the practice is permitted. (3Gov't Employees Ins, Co. v. Google (2004).) Similarly, a court held that consumers were not confused by Google’s sale of the keyword "Geico." (GEICO v. Google, 330 F.Supp.2d 700 (2004).) In a 2004 case, Netscape sold the keywords "playboy" and "playmate" to explicit websites and, as a result, users searching for Playboy magazine were confronted with advertisements for sites with sexually explicit content. The court of appeals sent the case back to determine if consumers were confused as to the source of the generated ads. (Playboy Enterprises v. Netscape Communications (2004).) A contrary result seems to have been reached in Rescuecom Corp. v. Google Inc. (2009). Rescuecom sued Google over its sale of Rescue.com trademark as a keyword to trigger competitors’ ads. The Second Circuit Court of Appeals permitted the case to go forward because 15 United States Code Section 1127 defines “use in commerce” to include when "displayed in the sale or advertising of services." In a related keyword case, a district court ruled that a company could allege trademark infringement when a competitor's sponsored link was triggered by its trademark and also included within the sponsored ad. (Romeo & Juliette Laser Hair Removal, Inv. B. Assara I L.L.C.(2009)). The issue becomes even more complex when companies do business outside the United States. A French court ruled against the sale of trademarks as keywords in 2005.
Consult With an Attorney If ...
Keyword purchasing is a fairly complex area of law and as with all Internet legal issues, it's not always clear whether the practice of purchasing a competitor's trademark as keyword is legal. You should consult with an attorney if a competitor has sent you a legal letter demanding that you stop your practices, or if you are commencing the practice and are concerned whether a competitor will object.
Portions of this article are derived from Patent, Copyright & Trademark: An Intellectual Property Desk Reference by Richard Stim.