Saturday, May 29, 2010

A New Defense for Brand Owners Against Unwanted Key-Word Advertising

Just came back from the International Trademark Association (INTA) annual meeting in Boston. Being on the Key-word Advertising Working Group of the Internet Committee, I spent quite a bit of time talking to colleagues from around the world about issues surrounding key-word advertising. From these discussions (and some recent developments in the law), it dawned on me that there may be a new way for brand owners to defend themselves against unwanted key-word advertising.

By way of reminder, key-word advertising (in its most traditional sense) is a dynamic form of advertising where search engine's selling (and advertisers buying) the ability to have the advertiser's advertisement displayed automatically when an end user enters that key-word into the search engine.

There are at least two primary things that frustrate brand owners about key-word advertising. First, companies can purchase the brands of their competitors as key-words and thereby use their competitors' trademark (and arguably their good will) to divert Internet traffic to the competitor's website and divert potential buyers to the competitor's products. Second, search engines are making money using the brand owner's trademark.

One of the significant legal developments in the last year in this area is that the majority of US courts seem to have reached a consensus that a search engine's sale of a trademark as a key-word constitutes a use of the trademark in commerce. The unsettled issue is whether and under what circumstances, that use gives rise to a likelihood of confusion so as to constitute infringement. Reflecting on this, it occurred to me; what if a brand owner used its brand not only as its trademark for its goods, but also used its brand for its own key-word advertising?

Bear with me here. Suppose Widgco, Inc. sells widgets under the brand SPARROW. (What's a widget?). Now, ordinarily, a search engine could then sell SPARROW as a key-word to the highest bidder (e.g., perhaps Widgco's competitor). But what if Widgco also had its own search engine and used the word SPARROW as a key-word to trigger its own advertisements on its own search engine. Under the majority of current cases, this should constitute "use in commerce." As such, Widgco would be using the brand SPARROW not only for widgets, but would also be using the word SPARROW for the advertising service of providing the key-word to trigger advertising displays. Now imagine that Widgco registers its SPARROW brand for "advertising services, namely, use as a key-word to trigger advertising displays." Okay, I admit, the description could use some refining, but you get the point. It would potentially be problematic for any search engine that wanted to use the SPARROW brand as a key-word.

Anyone else think this might work as a good defense against use of a trademark by search engines as a keyword? How long do you think it will be before someone tries this out and brings the first case like this? Just a thought ...