Search marketers who want to bid on competitors’ trademarks as keywords may have a tough time figuring out the significance of two conflicting judicial decisions on the practice issued last week.
On Wednesday, a ruling issued by a U.S. District Court in Minnesota found that a trademark infringement lawsuit by Edina Realty against TheMSLOnline.com could proceed. Edina’s suit charges that by purchasing its business name as a keyword in searches on both Google and Yahoo!, its real-estate listing rival committed false advertising, trademark infringement and trademark dilution. Edina alleges that the term was also used in hidden links and text on the MLS Web site to ensure that the page appeared in organic search results for “Edina Realty”.
But on Thursday, the U.S. District Court for the Southern District of New York dismissed trademark infringement claims brought by pharmaceutical maker Merck against a group of online Canadian pharmacies that bought the name of Zocor, Merck’s cholesterol-reduction drug, as a search term. The court did agree that Merck’s suit against Mediplan Health Consulting could proceed for both false advertising and trademark dilution.
Neither case has been given a court date at press time.
Trademark infringement is usually considered to be improper use of someone else’s mark in commerce, leading to confusion in the marketplace. In the Minnesota ruling, the court found that TheMLSOnline.com “could have done more to prevent an improper inference regarding the relationship” between itself and Edina Realty. Both trademark infringement and dilution depend on finding that consumers may be confused by the improper use of a trademark and thus patronize some company other than the mark holder. That lowers the mark’s value for the proper holder and might constitute trademark dilution—something most courts expect a mark holder to prove with consumer survey data.
But in the Merck case, the New York court ruled that using a trademark as a keyword was not using it “in commerce” and therefore not infringement; that would only occur if the name was used on a label or displayed in the sale of services. Instead, the court ruled, using a rival’s name or trademark to produce ads on search results pages is “internal use” within the search engine index.
The cases are notable because they are two of the first that bring suit directly against the advertisers buying the keywords and not against the search engines that sell them. In an earlier notable trademark infringement case, insurance provider Geico sued Google for letting its name be used as a keyword to deliver paid search ads. In that case, a judge issued a written decision that dismissed the infringement charges but let the case proceed on the use of trademarks in the text of paid-search ads. The dispute was settled out of court in September 2005 without any further resolution of the trademark questions.
Several other trademark keywords suits against the search powers are still in the courts. One suit against Google by American Blind and Wallpaper Factory has been in process for about two years.
Yahoo! and Google have both altered their stance over time on buying trademarked terms as keywords to trigger search ads. After initially prohibiting the practice, Google allowed it in 2004, claiming that limiting sales of trademarks as keywords was impairing the completeness of Web searches on those terms. Google search advertisers can bid on competitors’ trademarks but cannot use those terms in the headline or text of their paid-search ads.
More recently, Yahoo! announced in February that it would only sell trademarked keywords to advertisers who were the legal holders of those marks. The move was widely seen as an attempt to appeal to a broad range of advertisers who have worried about protecting their trademarks in search marketing.
