Keyword Advertising

Keyword advertising allows companies to deliver advertisements based on user keyword searches.  When consumers type in the purchased keywords from the purchased category the company’s advertisement(s) will appear.  The keywords are used to target the correct market.  For example, when you go to Google and conduct a search on the right hand size of the page you will see a section titled “Sponsored Links”.  Under this title are advertisements created by keyword advertising.  Other companies use advertising banners or pop-up advertisements. Regardless of form, the advertisements were selected based on the terms used in the search engine.  Many of the lawsuits regarding Keyword advertising have been aimed at the search engine providers.

Some search engine providers have created provisions in their keyword advertising agreements that permit the advertiser to receive a refund if the trademark owner seeks the keyword advertisement within two weeks. Nevertheless, trademark owners are not satisfied and are seeking legal remedy.  Unfortunately, due to mid-trial settlement and mediations, the law on this issue is not clear. 

Legal Guidance for the Future

Playboy Enterprises, Inc. v. Netscape Communications Corp.

2000 U.S. Dist. LEXIS 13418 (C.D. Cal. Sept. 12, 2000).

In Playboy Enterprises, Inc. v. Netscape Communications Corp., the court provides valuable guidance for future cases.  In this case Playboy sued Netscape and Excite for keyword advertisements triggered by terms such as “playboy” and “playmate.” Playboy claimed that these advertisements infringed and diluted its trademark.  The court denied Playboy’s claim and granted summary judgment on behalf of Netscape, et al.  Nevertheless, the court makes note of several errors on behalf of the Playboy.  The court notes the following missed opportunities:

• Playboy should have alleged that Netscape’s search engine infringed or diluted their marks when it generated a list of Web sites related to “playboy” or “playmate.”

• Playboy failed to demonstrate that Netscape used its trademarks in commerce. It is important to establish that Netscape actually used Playboy’s trademarks and not just the English word Playboy.

• Playboy, in regard to its claim of blurring, failed to prove that the use of its trademark severed a connection between Playboy and its trademark. In particular, Playboy needed to prove that Netscape used Playboy’s trademarks to identify goods or services.

• Playboy, in regard to its claim of tarnishment, failed to prove that Netscape associated Playboy’s trademark with inferior or offensive products or services, by presenting evidence that Netscape associated Playboy’s trademark with other types of adult entertainment, which thereby harmed Playboy’s use of its trademark.

On appeal the decision of the district court was reversed, finding that the Netscape’s use of Playboy’s trademarks could result in consumer confusion.  Nevertheless, Netscape and Playboy settled the dispute. 

Gov’t Emples, Ins. Co. v. Google, Inc.

330 F. Supp. 2d 700 (D. Va., 2004).

While some courts have not had taken a position on this issue, a Virginia court has.  In 2004, Google was sued by GEICO Insurance for allowing, “competitors to bid on trademarks that, when searched, will trigger their advertisements.” The Virginia court found, on summary judgment, that there was no infringement for using a trademark term as a “trigger in a selection method.”  Specifically, the court found that “GEICO had not shown that using a trademark as a search term to trigger competitive ads amounts to infringement.  The judge did not find enough evidence of consumer confusion.”  However, whether GEICO has a claim against the competitors who use the trademark within the text of their advertisements has not been determined.

Additional Concerns with Keyword Advertising

Another concern with keyword advertising is click fraud.  Advertisers who use keyword advertising are charged every time some clicks on its advertisement.  Click fraud is the practice of clicking on pay-per click advertisements to intentionally increase the advertiser’s cost.  See Click Fraud for more information.

REFERENCES:

• Gov’t Emples, Ins. Co. v. Google, Inc., 330 F. Supp. 2d 700 (D. Va., 2004).

• Playboy Enters. v. Netscape Communs., 2000 U.S. Dist. LEXIS 13418 (C.D. Cal. Sept. 12, 2000).

• Dee McAree, Key Battle over search engine fees is not over, The National Law Journal, Feb. 7, 2005. 

• Grant Crowell, Search Engines and Legal Issues, at http://store.1choice4ystore.com/seenandleisb.html (last visited Apr. 11, 2005).

• Danny Sullivan, Search Engines and Legal Issues, at http://searchenginewatch.com/resources/article.php/2156541 (Apr. 21, 2004).