Brand Protection in the World of Keyword Advertising

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Brand Protection in the World of Keyword
Advertising

• Mike Rodenbaugh Yahoo! Inc.
• Scott Hervey Weintraub Genshlea Chediak

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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

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Topic A Business Facts ThatDrive 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

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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

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Some basic definitions
Intrinsic/Native Search results
Sponsored Results/Keyword Ad
Sponsored Links
Native Search
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Some basic definitions
Sponsored Links
Native Search
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Domain Parking
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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.

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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

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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

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Schemes Affecting Search Engine Results
Consequences for Trademark Owners
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Schemes Affecting Search Engine Results
Consequences for Trademark Owners
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Schemes Affecting Search Engine Results
Consequences for Trademark Owners
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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.

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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

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Trademarks As Keywords
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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

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Googles 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

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Googles 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

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Yahoo!s trademark policy

• Yahoo!s relevancy guidelines for advertisers
  allow an advertiser to bid on a third party
  trademark ONLY IF
• the advertisers website contains content
  relevant to the trademark AND the trademark as
  used in the ad
• constitutes nominative fair use (either a
  reseller, or NON-COMPETITIVE 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 advertisers
  website and why the listing appeared in response
  to the query.

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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.

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Microsofts 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.

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Microsofts 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.

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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/dmtrademark
  s.php
• http//www.google.com/tm_complaint_afd.html

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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?

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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...

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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

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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)

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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 Intl., Inc. v. WhenU.com, Inc. (E.D. Va.
  2003)

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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.

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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.

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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 Entmt Corp., 174 F.3d 1036
  (9th Cir. 1999). But see the Fourth Circuits
  apparent skepticism about this doctrine expressed
  in Lamparello v. Falwell, 420 F.3d 309, 316-17
  (4th Cir. 2005).

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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)

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Trademarks As Keywords For Paid ResultsTrademark
Dilution

• Dilution Theory
• Likelihood of confusion irrelevant.
• Theory Blurring of distinctiveness of the
  mark as associated exclusively with trademark
  owners goods or services occurs as a result of
  sponsored listings triggered off of the trademark
  when used as a search term.

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Trademarks As Keywords For Paid ResultsTrademark
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 Courts 2003 ruling in
  Moseley v. V Secret Catalogue, Inc.

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Trademarks As Keywords For Paid ResultsTrademark
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.

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Trademarks As Keywords For Paid ResultsTrademark
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.

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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

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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

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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)

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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

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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 BP 17500
  (false advertising) Washington Consumer
  Protection Act

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Spyware as a Tool for Advertisers

• Applicable Federal Law
• 18 U.S.C. 2511 18 U.S.C. 2512 18 U.S.C.
  1030

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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.
  

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Spyware as a Tool for Advertisers

• State Action
• New Yorks lawsuit against DirectRevenue and the
  settlement of Cingular Wireless, Priceline.com
  and Travelocity.com
• Texas and Californias lawsuit against Sony BMG
  Music Entertainment

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• Thank You