The PPC Trademark Battle Continues

But first, a little background information. When you search at almost all search engines these days, you are presented with two types of results: paid and non-paid. (The non-paid results are often known in the business as organic or free results.) In other words, some results appear on the page because someone is paying to put them there ' an advertiser said, in effect, “when someone searches for term x, display my ad.” To be a little more specific, the advertisers are not actually paying to display the ads on the search-results page; rather, they only pay if someone clicks on their link, and so these ads have come to be known as PPC ads.

These PPC results are generally identified through the use of a label: “Sponsored Links” the label says on Google, “SPONSOR RESULTS” on Yahoo!, and “Sponsored sites” on Bing/MSN. PPC ads are also set apart from the organic results, and in some situations displayed with a background of a different color. (Note, however, that Yahoo's search results sometimes contain PPC results ' from Yahoo's Search Submit service ' secretly mixed in with the organic results.)

Here's how these PPC ads work. An advertiser provides the search engine with a list of keywords of interest. For instance, let's consider a company selling
perfume; it might use keywords such as perfume, discount perfume, fragrance, and so on. It might also include brand names, such as Chanel, Versace, and Eternity. The PPC companies even provide tools to help advertisers pick keywords, based on what search-engine users are actually searching for. In fact Google's Keyword Suggestion Tool has become the focus of some trademark complaints, because it actually suggests trademarked terms to advertisers (search for perfume and Google will suggest a couple of hundred terms, including many trademarked terms ' Joop, Versace, Armani, Hugo Boss, and plenty more).

Now, let's say someone comes to the search engine and searches on one of those terms; what happens? The advertiser's ad is displayed, and if the searcher chooses to click the ad, the advertiser pays the search engine, perhaps just a few cents, though in many cases several dollars.

Keyword Disputes

So, when you hear about a PPC dispute related to keywords, what does that mean? Well, there are two ways in which keywords come into play. As I just mentioned, keywords can be used as “triggers”; the searcher enters the keyword and clicks Search, and the ad appears in response to that keyword. But a keyword might be used in another way; the advertiser might place it into the ad itself. In fact the search engines have encouraged advertisers to do this, because it's been shown to increase the likelihood of the ad being clicked. If the ad contains the keywords for which the searcher looked, the keywords will be displayed in bold text. This bolding, and the fact that the searcher has these keywords in mind already, tends to attract the eye and increase the chance of the searcher clicking on the ad.

It's important to understand, however, that sometimes advertisers use keywords in their ads accidentally. Because placing the searched keywords into an ad is such an effective way to get people to click on the links, the search engines have provided simple mechanisms to make sure an ad matches the search. For instance, when building an ad using the Google Adwords system, an advertiser might place this into the ad title line: {keyword: }. This means, “place the keyword that the searcher used here.” Thus it's possible for an advertiser to end up with trademarked keywords displayed in its ads, without really intending to do so.

Thus there are really two areas of dispute here; but of the major search engines, only Google makes a distinction between the two. According to the stated trademark policies of the three big ad networks ' Google Adwords, Yahoo Search Marketing, Microsoft AdCenter ' only Google is unwilling to block the use of trademarked-keyword triggers. Microsoft (on the MSN/Bing search engines) “does not allow you to bid on as a keyword, or use in the content of your ads '. Any term whose use would infringe the trademark of any third party or otherwise be unlawful or in violation of the rights of any third party.” Yahoo states something similar: It “requires advertisers to agree that their search terms, their listing titles and descriptions, and the content of their Web sites do not violate the trademark rights of others.” So the stated policy of both Microsoft and Yahoo is, in effect, that if someone complains about trademark use in either the trigger keywords or the ads themselves, they'll investigate and perhaps block the use.

Google, however, has a very different policy. Of course it understands and accepts that the use of trademarked terms in the ad text can sometimes infringe on another party's trademarks, and it will investigate trademark use on request. However, it makes a critical distinction between the use of a trademark in the keyword triggers and the use in the ad text. Google's policy is clearly stated on its site: “We will investigate ad text only '. We will not disable keywords in response to a trademark complaint.”

Keywords Not Inherently Infringing

Why is that? Well, this brings us to the very heart of the debate about the use of trademarked terms in PPC advertising. “Google is dedicated,” its Web site states, “to providing relevant advertising to our users, advertisers, and publishers alike. Accordingly, our trademark policy not to investigate the use of trademarks as keywords in the regions listed above [most of the world] aims to provide users with choices relevant to their keywords. At the same time, we investigate trademark violations in ad text, both as a courtesy to the trademark owner and to ensure that ads are clear to users.”

Here's the basic argument that's made by people who believe the use of trademarks in the keyword triggers is not an infringement (the same argument that Google is making in this statement). When someone's ad is displayed on the search results page in response to a particular keyword being typed by the searcher, it is not intrinsically an infringement. Sure, if the ad itself is misleading ' if a user searches for chanel perfume and an ad appears saying “Huge Selection of Chanel Perfume,” yet the site the ad leads to doesn't sell Chanel, well, clearly that's misleading and thus an infringement. But that doesn't mean all ads are misleading. Let's say, for instance, that in response to a search for chanel perfume an ad for a site selling other perfumes is displayed (and doesn't use the word chanel in the ad text). Is that an infringement? Google argues no, and in fact further argues that not only is allowing other advertisers to place ads in response to these keyword triggers not an infringement in and of itself, but that it's actually a benefit to people searching on Google. That is, Google is “providing users with choices relevant to their needs.” If you're searching for chanel perfume, after all, you may be willing to consider another brand. (As I write this, Walmart is advertising Halle: Eau De Parfum in response to the chanel keyword, for example.)

Those who oppose the idea that trademarked-keyword triggers are intrinsically infringing argue that placing an ad on a page in response to a keyword is analogous to many other advertising activities. For example:

• Brand A might buy a billboard across the road from Brand B's store;
• Brand A might buy a Yellow Pages ad close to Brand B's ad;
• Brand A might buy advertising in a magazine or newspaper in response to an upcoming article about Brand B;
• Brand A might buy an ad close to a long-running Brand B ad in a magazine; and
• Brand A might buy a supermarket placement close to Brand B's goods.

Conclusion

Thus recent PPC disputes are more than run-of-the-mill trademark disputes. The question becomes: is the mere act of displaying an ad an infringement, even if the ad itself is in no way misleading? Some have also positioned this as a free-speech issue; the Electronic Frontier Foundation's (“EFF”) amicus brief pointed out that giving trademark holders the right to block any and all ads they don't like would disrupt “Constitutionally-protected [sic] activities” such as campaigns against corporations by labor and environmental groups. Thus many believe that if Rescuecom wins this case it rewrites trademark law. The EFF's amicus brief quotes Prestonettes, Inc. v. Coty (1924) in pointing out that “[a trademark] does not confer a right to prohibit the use of the word or words. It is not a copyright. A trademark only gives the right to prohibit the use of it insofar as to protect the owner's good will against the sale of another's product as his.” Rescuecom argues, in effect, that trademark law should go much further than that.

The Second Circuit's recent decision in Rescuecom Corp. v. Google, Inc. is but one more step in a long-standing battle that's likely to continue for some time; it's been five years already, and the court merely ruled on a technicality that allows the case to run longer still. Most Google users and advertisers are blissfully unaware of what's going on, and even many involved in Internet commerce don't understand the implications. One CEO recently told me point blank that the use of trademarks in PPC advertising was a resolved issue: “It's illegal,” he said.

Well, it's a little more complicated than that. In fact, few people even seem to realize that there are actually two ways to use keywords in Pay-Per-Click (“PPC”) advertising, though only one is at issue in Rescuecom v. Google.

PPC Basics

But first, a little background information. When you search at almost all search engines these days, you are presented with two types of results: paid and non-paid. (The non-paid results are often known in the business as organic or free results.) In other words, some results appear on the page because someone is paying to put them there ' an advertiser said, in effect, “when someone searches for term x, display my ad.” To be a little more specific, the advertisers are not actually paying to display the ads on the search-results page; rather, they only pay if someone clicks on their link, and so these ads have come to be known as PPC ads.

These PPC results are generally identified through the use of a label: “Sponsored Links” the label says on Google, “SPONSOR RESULTS” on Yahoo!, and “Sponsored sites” on Bing/MSN. PPC ads are also set apart from the organic results, and in some situations displayed with a background of a different color. (Note, however, that Yahoo's search results sometimes contain PPC results ' from Yahoo's Search Submit service ' secretly mixed in with the organic results.)

Here's how these PPC ads work. An advertiser provides the search engine with a list of keywords of interest. For instance, let's consider a company selling
perfume; it might use keywords such as perfume, discount perfume, fragrance, and so on. It might also include brand names, such as Chanel, Versace, and Eternity. The PPC companies even provide tools to help advertisers pick keywords, based on what search-engine users are actually searching for. In fact Google's Keyword Suggestion Tool has become the focus of some trademark complaints, because it actually suggests trademarked terms to advertisers (search for perfume and Google will suggest a couple of hundred terms, including many trademarked terms ' Joop, Versace, Armani, Hugo Boss, and plenty more).

Now, let's say someone comes to the search engine and searches on one of those terms; what happens? The advertiser's ad is displayed, and if the searcher chooses to click the ad, the advertiser pays the search engine, perhaps just a few cents, though in many cases several dollars.

Keyword Disputes

So, when you hear about a PPC dispute related to keywords, what does that mean? Well, there are two ways in which keywords come into play. As I just mentioned, keywords can be used as “triggers”; the searcher enters the keyword and clicks Search, and the ad appears in response to that keyword. But a keyword might be used in another way; the advertiser might place it into the ad itself. In fact the search engines have encouraged advertisers to do this, because it's been shown to increase the likelihood of the ad being clicked. If the ad contains the keywords for which the searcher looked, the keywords will be displayed in bold text. This bolding, and the fact that the searcher has these keywords in mind already, tends to attract the eye and increase the chance of the searcher clicking on the ad.

It's important to understand, however, that sometimes advertisers use keywords in their ads accidentally. Because placing the searched keywords into an ad is such an effective way to get people to click on the links, the search engines have provided simple mechanisms to make sure an ad matches the search. For instance, when building an ad using the Google Adwords system, an advertiser might place this into the ad title line: {keyword: }. This means, “place the keyword that the searcher used here.” Thus it's possible for an advertiser to end up with trademarked keywords displayed in its ads, without really intending to do so.

Thus there are really two areas of dispute here; but of the major search engines, only Google makes a distinction between the two. According to the stated trademark policies of the three big ad networks ' Google Adwords, Yahoo Search Marketing, Microsoft AdCenter ' only Google is unwilling to block the use of trademarked-keyword triggers. Microsoft (on the MSN/Bing search engines) “does not allow you to bid on as a keyword, or use in the content of your ads '. Any term whose use would infringe the trademark of any third party or otherwise be unlawful or in violation of the rights of any third party.” Yahoo states something similar: It “requires advertisers to agree that their search terms, their listing titles and descriptions, and the content of their Web sites do not violate the trademark rights of others.” So the stated policy of both Microsoft and Yahoo is, in effect, that if someone complains about trademark use in either the trigger keywords or the ads themselves, they'll investigate and perhaps block the use.

Google, however, has a very different policy. Of course it understands and accepts that the use of trademarked terms in the ad text can sometimes infringe on another party's trademarks, and it will investigate trademark use on request. However, it makes a critical distinction between the use of a trademark in the keyword triggers and the use in the ad text. Google's policy is clearly stated on its site: “We will investigate ad text only '. We will not disable keywords in response to a trademark complaint.”

Keywords Not Inherently Infringing

Why is that? Well, this brings us to the very heart of the debate about the use of trademarked terms in PPC advertising. “Google is dedicated,” its Web site states, “to providing relevant advertising to our users, advertisers, and publishers alike. Accordingly, our trademark policy not to investigate the use of trademarks as keywords in the regions listed above [most of the world] aims to provide users with choices relevant to their keywords. At the same time, we investigate trademark violations in ad text, both as a courtesy to the trademark owner and to ensure that ads are clear to users.”

Here's the basic argument that's made by people who believe the use of trademarks in the keyword triggers is not an infringement (the same argument that Google is making in this statement). When someone's ad is displayed on the search results page in response to a particular keyword being typed by the searcher, it is not intrinsically an infringement. Sure, if the ad itself is misleading ' if a user searches for chanel perfume and an ad appears saying “Huge Selection of Chanel Perfume,” yet the site the ad leads to doesn't sell Chanel, well, clearly that's misleading and thus an infringement. But that doesn't mean all ads are misleading. Let's say, for instance, that in response to a search for chanel perfume an ad for a site selling other perfumes is displayed (and doesn't use the word chanel in the ad text). Is that an infringement? Google argues no, and in fact further argues that not only is allowing other advertisers to place ads in response to these keyword triggers not an infringement in and of itself, but that it's actually a benefit to people searching on Google. That is, Google is “providing users with choices relevant to their needs.” If you're searching for chanel perfume, after all, you may be willing to consider another brand. (As I write this, Walmart is advertising Halle: Eau De Parfum in response to the chanel keyword, for example.)

Those who oppose the idea that trademarked-keyword triggers are intrinsically infringing argue that placing an ad on a page in response to a keyword is analogous to many other advertising activities. For example:

• Brand A might buy a billboard across the road from Brand B's store;
• Brand A might buy a Yellow Pages ad close to Brand B's ad;
• Brand A might buy advertising in a magazine or newspaper in response to an upcoming article about Brand B;
• Brand A might buy an ad close to a long-running Brand B ad in a magazine; and
• Brand A might buy a supermarket placement close to Brand B's goods.

Conclusion

Thus recent PPC disputes are more than run-of-the-mill trademark disputes. The question becomes: is the mere act of displaying an ad an infringement, even if the ad itself is in no way misleading? Some have also positioned this as a free-speech issue; the Electronic Frontier Foundation's (“EFF”) amicus brief pointed out that giving trademark holders the right to block any and all ads they don't like would disrupt “Constitutionally-protected [sic] activities” such as campaigns against corporations by labor and environmental groups. Thus many believe that if Rescuecom wins this case it rewrites trademark law. The EFF's amicus brief quotes Prestonettes, Inc. v. Coty (1924) in pointing out that “[a trademark] does not confer a right to prohibit the use of the word or words. It is not a copyright. A trademark only gives the right to prohibit the use of it insofar as to protect the owner's good will against the sale of another's product as his.” Rescuecom argues, in effect, that trademark law should go much further than that.