<b><i>Commentary:</b></i> Trademarked Keywords Become Legitimate PPC Targets

In the Oct. 2009 edition of Internet Law & Strategy, I wrote about Rescuecom Corp. v. Google Inc. (see, “The PPC Trademark Battle Continues”; www.ljnonline.com/issues/ljn_internetlaw/7_10/news/152832-1.html), in which Rescuecom, a computer-support company, complained that Google was recommending and selling the keyword rescuecom to competing pay-per-click (“PPC”) advertisers to be used as a trigger for their PPC ads. At that time, the Second Circuit ruled that Google's use of keywords constituted a “use in commerce,” and thus Rescuecom was able to continue its suit. So it seemed that the concept of using keywords to trigger PPC ads would get its day in court. It didn't quite work out that way.

In fact, since 2009, the legal landscape relating to PPC keyword triggers has continued to evolve, with a number of events that will please those of us who believe that the use of a trademarked term to trigger a PPC ad is not inherently a trademark infringement.

First (and certainly most amusing), Rescuecom found itself in a battle with Best Buy for using the keywords geek squad to trigger its own PPC ads, in effect doing exactly what it complained that its competitors had been doing ' using a trademarked term to trigger ads. Best Buy (BBY Solutions, Inc.) had demanded that Rescuecom stop, so Rescuecom quickly sought a declaratory judgment that its use of the keywords was valid. Ironically, Rescuecom argued that the use of the keywords not only as a trigger, but also within the ad text itself, strengthened its case, not weakened it as many might at first assume. The text, “Leave the geeks,” argued Rescuecom's CEO, left no doubt that Rescuecom was a competitor to Geek Squad. (I believe he's correct, but it's still fun watching people scramble to explain away contradictory positions.)

Of course this put Rescuecom in a position of having to litigate against Google using the same arguments being used by Best Buy against Rescuecom. As law professor Eric Goldman wrote in his blog: “Rescuecom was caught in the duplicitous position of making plaintiff-side arguments against Google while making highly contradictory defense-side arguments against Best Buy.” Rescuecom's solution was to declare a victory and drop the lawsuit against Google, so the court never got to the core issue of whether trademarked terms can be used as ad triggers. (For Prof. Goldman's explanation of why their claim of victory was “disingenuous,” see, http://blog.ericgoldman.org/archives/2010/03/rescuecom_aband.htm.)

Rescuecom and Best Buy battled it out for a few months until the case was dismissed with prejudice in January of this year. So today, Rescuecom PPC ads still run on Google in response to a search for geek squad. (In a case of Rescuecom having its pie and eating it too, no PPC ads run in response to a Google search for rescuecom.)

Free Credit Report Case

In another recently resolved case, the owners of FreeCreditReport.com sued the owners of FreeScoreOnline.com for using variants of freecreditreport.com to trigger ads pointing to competing Web sites. See, Consumer Info.com, Inc. v. One Technologies LP & Adaptive Marketing, LLC, CV-09-3783-VBF. (Full disclosure note: I served as an expert witness in this case.)

In this dispute, as in all such cases, the question essentially came down to whether the ads triggered by the use of a trademarked keyword are likely to confuse the consumer into thinking that the competing ad leads to the trademark holder's Web site. It's my belief that there is no confusion, and in fact that this is so obvious, it's hard to understand how keyword-trigger cases continue to be filed and taken seriously.

After all, a search-results page generally comprises from 10 to 20 results, sometimes more, along with various other links to, for instance, results pages for similar search terms. Clearly, not all these results lead to the same Web site, or even to different Web sites owned by the same company, and searchers know this; anyone who has used a search engine for more than a few minutes knows that if they search for the term ibm, for example, they will get links to Web pages containing information about IBM, most of which will not be owned by IBM itself. (A search on Google for this term provided 16 links, of which 4 led to IBM.com.)

Google's policy on keyword triggers has changed over time, but it currently allows advertisers to use competitors' trademarked terms as keyword triggers because it believes that doing so not only isn't confusing, but is actually helpful. Google has stated that its goal is to “provide our users with the most relevant information, whether from search results or advertisements, and we believe users benefit from having more choice.” Unfortunately, the position of Yahoo! and Bing was quite different; both would disable trademarked keyword triggers in response to a complaint.

The jury in Consumer Info.com did get to decide on the keyword-trigger issue. When asked whether the defendant used freecreditreport.com or a similar term “in a manner that is likely to cause confusion among ordinary purchasers as to the source of the goods” ' the jury decided that, no, there was no confusion.

Keyword Triggers Accepted

There have been other important changes in the keyword-trigger debate. Yahoo! no longer runs its own PPC-advertising program. Under a partnership that began last year, Yahoo! search results ' both “organic” (non-paid) and PPC ads ' are provided by Microsoft's Bing search system. Furthermore, Microsoft Advertising adCenter, Bing's PPC service, recently announced that starting on March 3 of this year, it will no longer respond to complaints about trademarked terms used as keyword triggers, in order to “[align] the adCenter trademark policy with the current industry standard.” (For “align with the industry standard,” read “do what Google does”).

Thus the keyword-trigger policy for America's three largest search systems, providing over 95% of all search results, is now that advertisers can bid on competitors' trademarked terms. We may be close to a final resolution of this question, and an end to lawsuits related to keyword triggers.

In the Oct. 2009 edition of Internet Law & Strategy, I wrote about Rescuecom Corp. v. Google Inc. (see, “The PPC Trademark Battle Continues”; www.ljnonline.com/issues/ljn_internetlaw/7_10/news/152832-1.html), in which Rescuecom, a computer-support company, complained that Google was recommending and selling the keyword rescuecom to competing pay-per-click (“PPC”) advertisers to be used as a trigger for their PPC ads. At that time, the Second Circuit ruled that Google's use of keywords constituted a “use in commerce,” and thus Rescuecom was able to continue its suit. So it seemed that the concept of using keywords to trigger PPC ads would get its day in court. It didn't quite work out that way.

In fact, since 2009, the legal landscape relating to PPC keyword triggers has continued to evolve, with a number of events that will please those of us who believe that the use of a trademarked term to trigger a PPC ad is not inherently a trademark infringement.

First (and certainly most amusing), Rescuecom found itself in a battle with Best Buy for using the keywords geek squad to trigger its own PPC ads, in effect doing exactly what it complained that its competitors had been doing ' using a trademarked term to trigger ads. Best Buy (BBY Solutions, Inc.) had demanded that Rescuecom stop, so Rescuecom quickly sought a declaratory judgment that its use of the keywords was valid. Ironically, Rescuecom argued that the use of the keywords not only as a trigger, but also within the ad text itself, strengthened its case, not weakened it as many might at first assume. The text, “Leave the geeks,” argued Rescuecom's CEO, left no doubt that Rescuecom was a competitor to Geek Squad. (I believe he's correct, but it's still fun watching people scramble to explain away contradictory positions.)

Of course this put Rescuecom in a position of having to litigate against Google using the same arguments being used by Best Buy against Rescuecom. As law professor Eric Goldman wrote in his blog: “Rescuecom was caught in the duplicitous position of making plaintiff-side arguments against Google while making highly contradictory defense-side arguments against Best Buy.” Rescuecom's solution was to declare a victory and drop the lawsuit against Google, so the court never got to the core issue of whether trademarked terms can be used as ad triggers. (For Prof. Goldman's explanation of why their claim of victory was “disingenuous,” see, http://blog.ericgoldman.org/archives/2010/03/rescuecom_aband.htm.)

Rescuecom and Best Buy battled it out for a few months until the case was dismissed with prejudice in January of this year. So today, Rescuecom PPC ads still run on Google in response to a search for geek squad. (In a case of Rescuecom having its pie and eating it too, no PPC ads run in response to a Google search for rescuecom.)

Free Credit Report Case

In another recently resolved case, the owners of FreeCreditReport.com sued the owners of FreeScoreOnline.com for using variants of freecreditreport.com to trigger ads pointing to competing Web sites. See, Consumer Info.com, Inc. v. One Technologies LP & Adaptive Marketing, LLC, CV-09-3783-VBF. (Full disclosure note: I served as an expert witness in this case.)

In this dispute, as in all such cases, the question essentially came down to whether the ads triggered by the use of a trademarked keyword are likely to confuse the consumer into thinking that the competing ad leads to the trademark holder's Web site. It's my belief that there is no confusion, and in fact that this is so obvious, it's hard to understand how keyword-trigger cases continue to be filed and taken seriously.

After all, a search-results page generally comprises from 10 to 20 results, sometimes more, along with various other links to, for instance, results pages for similar search terms. Clearly, not all these results lead to the same Web site, or even to different Web sites owned by the same company, and searchers know this; anyone who has used a search engine for more than a few minutes knows that if they search for the term ibm, for example, they will get links to Web pages containing information about IBM, most of which will not be owned by IBM itself. (A search on Google for this term provided 16 links, of which 4 led to IBM.com.)

Google's policy on keyword triggers has changed over time, but it currently allows advertisers to use competitors' trademarked terms as keyword triggers because it believes that doing so not only isn't confusing, but is actually helpful. Google has stated that its goal is to “provide our users with the most relevant information, whether from search results or advertisements, and we believe users benefit from having more choice.” Unfortunately, the position of Yahoo! and Bing was quite different; both would disable trademarked keyword triggers in response to a complaint.

The jury in Consumer Info.com did get to decide on the keyword-trigger issue. When asked whether the defendant used freecreditreport.com or a similar term “in a manner that is likely to cause confusion among ordinary purchasers as to the source of the goods” ' the jury decided that, no, there was no confusion.

Keyword Triggers Accepted

There have been other important changes in the keyword-trigger debate. Yahoo! no longer runs its own PPC-advertising program. Under a partnership that began last year, Yahoo! search results ' both “organic” (non-paid) and PPC ads ' are provided by Microsoft's Bing search system. Furthermore, Microsoft Advertising adCenter, Bing's PPC service, recently announced that starting on March 3 of this year, it will no longer respond to complaints about trademarked terms used as keyword triggers, in order to “[align] the adCenter trademark policy with the current industry standard.” (For “align with the industry standard,” read “do what Google does”).

Thus the keyword-trigger policy for America's three largest search systems, providing over 95% of all search results, is now that advertisers can bid on competitors' trademarked terms. We may be close to a final resolution of this question, and an end to lawsuits related to keyword triggers.