WHAT IS KEYWORD ADVERTISING?
Keyword advertising refers to advertisements that appear alongside or above “organic” search results in response to terms or “keywords” in the user’s search query. A search for “cheapest unlimited cell phone plans,” for example, yields paid ads for mobile communication companies appearing above the organic results for this search. The attraction of keyword advertising is that an ad that is relevant to a user’s query is more likely to be clicked. Search engines such as Google, Bing, and Yahoo allow advertisers to bid on keywords, which may include both generic terms such as “cell phone” and trademark or brand terms, such as “Verizon.”
WHAT DOES THIS HAVE TO DO WITH TRADE
Purchasing generic terms (for instance, “golf course” or “golf club”) as keywords will almost never raise any trademark concerns. Problems in keyword advertising sometimes arise when a company buys a competitor’s trademark as a keyword so that its ad displays with search results for the competitor’s mark. One might wonder, for example, why there is an ad for Wendy’s in the results of a search for “McDonald’s.” Although this is common practice in online advertising, buying a competitor’s trade-mark as a keyword entails risk in the form of lost customers, increased ad spend, and potential legal repercussions for trademark infringement.
A successful brand-owner bringing a case for trademark infringement must satisfy four criteria: 1 the plaintiff must own a valid trade-mark, 2 the plaintiff must have prior rights to the trademark, 3 the defendant must use the plain-tiff’s trademark in commerce in connection with the sale of goods or services, and 4 defendant’s use must cause a likelihood of confusion about product source, or afﬁ liation with the plaintiff.
The ﬁ rst two criteria are relatively simple factual determinations; the uncertainty and danger lay in the second two criteria. Most courts have found that the purchase of another party’s trademark as a keyword that triggers an adver-tisement is a “use in commerce.” The more complicated question is whether that use is causing the “likelihood of confusion.”
WHAT IS ALLOWED AND WHAT IS PROHIBITED?
Generally, courts do not ﬁ nd a sufﬁ client “likelihood of confusion” only by the purchase of another’s trademark for keyword advertising. The ofﬂine equivalent of this happens frequently in competitive markets where companies set up shop right next to each other hoping that the site of their logo or advertisements will pull customers from their competitor at the last minute.
Where courts do draw the line, though, is when a company bids on a competitor’s trademark and then includes that trademark in the triggered advertisement. In fact, courts have stated that it is the labeling and appearance of these advertisements and the surrounding context of the screen displaying the search result that is the most critical factor in determining whether a likelihood of confusion exists in cases where the defendant has used a competitor’s mark as a keyword search term. There are exceptions to this rule, for example, an authorized reseller (or similar) of the trademarked product/services in question may be able to use the trademarked term in the advertisement.
- The ad text uses the term descriptively in its ordinary meaning rather than in reference to the trademark, or
- The ad is not in reference to the goods or services corresponding to the trademarked term
We don’t want users to feel misled by ads that we deliver, and that means being upfront, honest, and providing them with the information that they need to make informed decisions. For this reason, we don’t allow the following:
Misleading content – making false statements about your identity or qualiﬁ cations or falsely implying afﬁliation with, or endorsement by, another individual, organization, product, or service
Untrustworthy behavior – conceal-ing or misstating information about the business, product, or service.
Keyword advertising is no differ-ent. Do not divert or trick Internet users into coming to your website, even accidentally. Avoid attract-ing false advertising complaints, or any other disputes that could be used against you later in any legal proceeding. The wrongful use of another’s trademark in an adver-tisement; especially where the ad deceives or misleads the user is ac-tionable in court and may violate the search engine’s policies.
Can be Expensive – Stealing customers directly from a competitor is almost always more expensive than developing new customers. In keyword advertising, this is typically the result of the high bounce rates and low click-through rates of competitors’ marks as key-words. Accordingly, Google (and other search engines) will require you to pay more for those key-words than the competitor pays.
a competitor’s mark in keyword advertising. Samsung avoided us-ing any competitor’s trademarked terms anywhere in the ad-text and also added its perceived advan-tages over the competitor product. Samsung also took the “likelihood of confusion” challenge head-on by expressly acknowledging that it is not what the customer searched for, instead turning it into a lighthearted competitive jab. Importantly, rather than ruining the user’s experience and damaging Samsung’s reputa-tion for being deceptive or out of touch, this ad, at worst, generated a few laughs from even the most devout iPhone loyalists.