Utah restricts keyword ads for trademark searches

[softwareNerd]

I think companies who have a long-standing trademark have some type of case that others who adopt it in a domain name, in a way that can cause confusion, infringe on their IP. A lot depends on the details, but there's at least some prima-facie reason for a claim.

On the other hand, there's another objection that I don't buy: some companies claim that competitors' ads that show up on key-word searches are infringing on their trademark. For example: let's say I search for "Lexus" and Google displays ads for Mercedes and Hummer dealerships. How is that an infringement on Lexus's trademark?

Suppose one sees a Fidelity advertisement, that convinces one to save for retirement and makes one think they're a good firm. So, one goes to a financial adviser and asks to open an account with Fidelity, and he suggests going with Vanguard instead. How is that a violation of a trademark?

Yet, the legislators in Utah have decided that Internet users who search for a trademarked word should not be shown ads by their search engine. Here's the law. Read a critique of the law here, and a defense from the legislative sponsor here. (HT: Slashdot)

[D'kian]

I think companies who have a long-standing trademark have some type of case that others who adopt it in a domain name, in a way that can cause confusion, infringe on their IP. A lot depends on the details, but there's at least some prima-facie reason for a claim.

Agreed. One of the detials, and a lot rides on them, is whether the trademark is also a common word or phrase. For example, Donald Trump tried to trademark the phrase "You're fired," which strikes me as rather ludicrous.

On the other hand, there's another objection that I don't buy: some companies claim that competitors' ads that show up on key-word searches are infringing on their trademark. For example: let's say I search for "Lexus" and Google displays ads for Mercedes and Hummer dealerships. How is that an infringement on Lexus's trademark?

It isn't. It wouldn't be even if, say, a Mercedes add began "Unlike Lexus...." so long as the claim of how Mercedes is unlike Lexus happens to be truthful.

I agree that such adds hurt the brand being searched for. Suppose I searched "Orbitz" and got an add for Expedia. I may wind up visiting both, when previously I dind't know about the latter. And I might choose Expedia for any number of reasons. That would hurt Orbitz, no doubt.

But no company has the right to supress any other company's advertising (except in cases of libel or fraud). Since all the big companies spend a lot on advertising, including on the web, they could try to pressure Google and Yahoo not to show competing brands on searches. The search companies would then have to decide based on what's best for their business.

To involve the coercive power of government, though, is throroughly despicable.

If search engines directed you to a Ford site when you looked up Nissan, that might be construed as fraud.

[Prometheus98876]

I agree with D'Kian about the first point. While it is perfectly reasonable to want to protect the use of say "Cisco" in a domain name, it is just absurd to claim one has Intellectual Property rights over say "programming", even if it is part of your tradmark in some way, sort of like trying to claim they invented / developed certain English words.

If search engines directed you to a Ford site when you looked up Nissan, that might be construed as fraud.

I think it would be pretty shaky to consider this fraud. For one thing how would you be able to verify it was fraud? Google could innocently be thrown off by a Ford site that mentions Nissan alot and is often visited without it being fraud. You would have to prove the search engine was built delibretely to give you results other than that which the search terms indicate....

[D'kian]

I think it would be pretty shaky to consider this fraud. For one thing how would you be able to verify it was fraud? Google could innocently be thrown off by a Ford site that mentions Nissan alot and is often visited without it being fraud. You would have to prove the search engine was built delibretely to give you results other than that which the search terms indicate....

That's why I said "could."

All search engines deliver more than a single result. I wouldn't even be surprised if I looked up Nissan to be shown a Ford link. But suppose all results were Ford? Now, suppose you try the "I'm feeling lucky" button on Google while searching Nissan and wound up at Ford. Sure it could be some sort of Google-bombing going on. Now suppose you try Chrysler and wind up at Ford again. If it happens with any car brand you try, I'd say odds are sky high something fishy's going on.

Of course if that happened, people would stop using Google for car-related searches.

[softwareNerd]

Also, since Google is free, one couldn't have a case against them if they purposel;y showed you "wrong" results.

[DavidOdden]

If we grant the validity of trademarks to begin with, then what's the actual problem? Before we grant that assumption, we ought say what we think trademark is about, and I'm claiming that it's a species of ownership, that is, Microsoft owns the name Microsoft and thus the values associated with the name, and only Microsoft can use the name (and I emphasize the word use, not mention) That's what this law states -- see the Infringement section:

• 70-3a-402 (1) c. uses an electronic registration mark to cause the delivery or display of an advertisement for a business, goods, or a service: (i) of the same class, as defined in Section 70-3a-308, other than the business, goods, or service of the registrant of the electronic registration mark;
  

Notice that the statute says "uses...to cause", and not "uses...and causes": that's a very important difference -- you can buy strawberries to make shortcake, but not make shortcake. It is not possible to buy strawberries and make shortcake, but not make shortcake. The law does not prohibit mentioning a trademark, nor does it prohibit using a trademark, it only prohibits using for a stated purpose, i.e. you cannot lard your ads with gratuitous mention of Nissan for the purpose of attracting customers to a competitor. That's one of the things that trademark is about: so the underlying question should be, ought we to have trademarks at all?

[softwareNerd]

In the sense of this law, if a consumer asks for one product by name and a retailer offers an alternative, the retailer can be said to be "using" the first name.

[DavidV]

As a Google advertiser (the majority of this site's budget is spent on Google Ads), I find this law disturbing. Even though it probably doesn't affect me directly, it is bound to raise my costs. I blogged about it here.

[DarkWaters]

Also, since Google is free, one couldn't have a case against them if they purposely showed you "wrong" results.

Yes, precisely! Furthermore, there is no explicit or implicit agreement that Google results are exactly what the users were searching for. Given that Google is nothing more than a (impressively) programmed end-to-end information retrieval system, it is expected in that competing products might be misordered in search results. It is ridiculous to accuse Google of any sort of wrongdoing here given what a search engine is.

A more interesting question might be what if automotive dealers (or anyone else) were intentionally trying to fool Google. For example, a Ford dealership repeating the words: HONDA SATURN TOYOTA NISSAN GM HYUNDAI ... on their website. Nevertheless, I am confident that the crucial issue here pertains to trademarks and that we could objectively determine when a violation has occured. In addition, the algorithmic geniuses at Google would eventually find a way to not be statistically misled by such basic tactics.

Edited April 11, 2007 by DarkWaters

[softwareNerd]

While a consumer could not have a case against Google in such a case, I can see how a trademark owner might have a case if Google (or a Google-advertiser) were to display the trademark in a way that causes people to think that they'll get more info on that subject, and then they're led elsewhere. That would be like a Ford dealer putting up a lot of other brand-signs and then trying to convert people who came looking for those brands.

Around 2004, GEICO sued Google on this issue. From what I understand, it ended with the judge deciding that the particular use did not cause confusion.

I think there may be a difference in two types of Google ads:

• simple user-search triggered ads; and,
  
• context-dependent ads
  

I can see no problem with the first type. In the second type, I think one might be able to frame content in such a way as to be deceptive and to actually use someone's trademark unfairly.

[DarkWaters]

context-dependent ads

Hi,

Could you please be more specific on what these ads would be and how they might be triggered in an algorithmic framework? I attended some lectures about algorithmic approaches to the Google Adwords Problem but I certainly am not claiming to be an expert.

While a consumer could not have a case against Google in such a case, I can see how a trademark owner might have a case if Google (or a Google-advertiser) were to display the trademark in a way that causes people to think that they'll get more info on that subject, and then they're led elsewhere. That would be like a Ford dealer putting up a lot of other brand-signs and then trying to convert people who came looking for those brands.

So I agree that a justified case is possible provided that one party is intentionally trying to deceive a large population of Google users. What about if a competing website (such as Ford's) was inadvertantly displayed higher than the intended website (such as GM's) by Google? By inadvertant here, I mean as the result of having a suboptimal information retrieval algorithm not through a programming bug or intentional deceit.

Edited April 11, 2007 by DarkWaters

[softwareNerd]

Could you please be more specific on what [context-dependent] ads would be and how they might be triggered in an algorithmic framework?

I mean like the Google Ads that display on the forum. Google calls their version "AdSense". Basically, they crawl sites anyway, looking for keywords for their search engine. So, if a site signs up to display Google ads, Google has a pretty good idea what to show. The same for ads displayed on blogs.

So, if a blogger is posting about Lexus, then the ads in the sidebar may well be those that are using "LEXUS" as one of their keywords, and could well be ads for competing brands. (i.e. advertisers who've told Google to display their ad when people search for "LEXUS"). Ordinarily, people would not have come to that ad-hosting site based on a search for LEXUS, because just putting the word LEXUS on ones page in all sorts of ways does not make it rise higher in Google's search algorithm. So, ordinarily, the site would not have used the word LEXUS to bring people in.

Of course, someone may create a web page that infringes on another person's trademarks. However, I assume that is something already covered by existing law. So, for instance, if my web-site sold "SHRAP" calculators that confused people into thinking they were "SHARP" calculators (based on a real story) a judge may well find there to be a violation.

[D'kian]

Let me tell you about two TV ads:

One shows Coca Cola employees being chewed out by their manager for buying Pepsi (something about Pepsi having a promotion at the time). The implication being that even the people who work for Coke prefer Pepsi. But as it's only an implication, not an explicit claim, I don't think there's anything wrong with it. Plus it's obvious it's meant to be a joke. Not that i expect Coke to be happy about it. And come to think of it, the ad ran only a few times.

Another I recall seeing in Florida. It was a bunch of teens taking a lunch break from their summer job. They were eating Burger King sandwiches, talking about how good the burgers were. When they go back to work, they all don McDonald's caps. Pretty much the same observation as the ad above.

However, for both ads, showing the competition's logo and name (and I don't recall if they did exactly) is a trademark infringement. At the very least it's a dirty trick. You can hint it's the competition all you want, but not use their name or logo.

Now, over two decades ago I recall an ad for 7up which made a point that, unlike Coke, it had no caffeine. The claim is undoubtedly true. But is it moral to use Coke's name (it did use the name, but not the logo)? 7up is a Pepsico brand.

At around that time, Bacardi had ads for its rum that mentioned other types of drinks. Not by brand or even name, but as a generic description. that is, it dind't comapre Bacardi white rum to vodka or gin, but to drinks that loose their flavor when mixed (meaning vodka and gin, of course).

[DavidV]

However, for both ads, showing the competition's logo and name (and I don't recall if they did exactly) is a trademark infringement. At the very least it's a dirty trick. You can hint it's the competition all you want, but not use their name or logo.

That's absurd. A trademark is a distinctive symbol by which a product is identified. It is meant to provide a means for organizations to uniquely identify themselves to others. As long as you are clear about whom the trademark you use belongs to, there is nothing wrong with using anyone's trademark. That's why ads that mention competitors will say in small print "Microsoft™ is a registered trademark of Microsoft Corporation." Restrictions on non-misleading use of trademarks is just censorship.

Edited April 12, 2007 by GreedyCapitalist

[D'kian]

Restrictions on non-misleading use of trademarks is just censorship.

The claim that Coke employees prefer Pepsi is misleading. Unless the ad offered proof about it, or it were a well-known fact.

If you've seen the Apple vs PC ads, you'll notice they really have a Mac vs Windows theme. But the series doesn't say Windows, it just hints about it (with the subtlety of a falling anvil, yes).

[softwareNerd]

The claim that Coke employees prefer Pepsi is misleading. Unless the ad offered proof about it, or it were a well-known fact.

...but, that's a different point from the idea that one may not use the name "Coke". You're implying that they may use the word "Coke" at least if they're telling the truth.

As to the point about telling the truth, I think -- in the context of that type of non-specific advertisement -- reasonable people know that Pepsi's joking when they show something like that. I don't see how it can be called deceptive. On the other hand, if they were to present it in a serious way, like "26% of Coke employees prefer Pepsi", that might be different.

[D'kian]

...but, that's a different point from the idea that one may not use the name "Coke". You're implying that they may use the word "Coke" at least if they're telling the truth.

Yes, of course. I can claim that my product is better or cheaper than the competition's. I can even claim it lacks something the competition's product has (like caffeine, say, or sugar). But all explicit claims must be true.

As to the point about telling the truth, I think -- in the context of that type of non-specific advertisement -- reasonable people know that Pepsi's joking when they show something like that. I don't see how it can be called deceptive.

Even if they're joking, I say it's a dirty trick. The intention is to harm the competition by using a falsehood (or at least an implied and unsopported claim). To say they're just kidding doesn't change the intention. and using the name or logo to do so should be some sort of infringement.

Typically the employees of a company can buy the company's products at a discount up to a certain amount. If Coke's employees prefered Pepsi so much they'd pay full price for it, wouldn't that be really big blow to Coke and a bonanza for Pepsi? That's what the joke implies.

I do enjoy publicity spats between competitors. Remember when Win95 came out? There was an ad from Apple saying "Cngrtltns Microsoft!" mocking the fact that filenames could now be mroe than 8 characters long, something apple had offered years before.

That's just as badly intentioned as the Pepsi ad, but it is also true.