When bidding on competitor brand terms, you don’t have to worry about cannibalization of your own organic results; these are terms for which you probably weren’t going to rank anyway. If you were, that means you’re using competitor brand terms on your own pages – a risky proposition from a legal standpoint.

Yes, the FTC does have some regulatory language about mentioning competitors for the purposes of a factual comparison, but the risk of doing this poorly and opening yourself up to a lawsuit or a false advertising complaint probably outweighs pursuing strategies involving comparisons.

The Practice Is Fairly Common

As far as paid search goes, in the U.S. at least, my understanding is that it has been generally accepted in the online marketing industry for several years now that it’s OK to *bid* on competitor brand terms as longs as the competitor’s terms don’t show up *in your creatives* (i.e. the ad text itself).

Run some brand-name searches yourself and you’ll see plenty of examples where this appears to be happening.

Google AdWords has copious information on this topic, the easiest place to find them is here:

• Google’s Trademark Advertising Policies

I strongly encourage you to to read all of them.

By my reading of Google’s policies, it seems that in the U.S. at least, if you bid on competitor brand terms, Google’s policy is not to investigate complaints, as long as you don’t include any trademarked terms in your creatives.

It’s important to note that Google’s policies (and local law) vary by country. Of course, Google’s policies are one thing; they don’t prevent a competitor from suing you however, so proceed at your own risk.

Disclaimer: I’m no lawyer, so you should get your own legal advice and research these issues to your own satisfaction before proceeding with any of the ideas in this article. Also, if you’re going to use competitor brand terms on other platforms such as Bing/Yahoo or elsewhere, you should fully investigate their policies first as well.

Caution: This Is Still Somewhat Up In The Air

Notably, a case involving Rosetta Stone was recently revived on appeal, so the overall question of the legality of bidding on competitor trademarks is still somewhat fuzzy.

If the courts lead to a reversal on this, then it could create a huge, painful mess for the industry and spawn numerous lawsuits, given the prevalence of the practice in the last few years. SearchEngineLand’s Pamela Parker has been doing a great job covering this:

• Question of Whether It’s Legal To Use Trademarks As Keywords Revived On Appeal

What is a Trademark?

Per the U.S. Patent and Trademark Office (USPTO for short) , a trademark is:

” a word, phrase, symbol or design, or a combination thereof, that identifies and distinguishes the source of the goods of one party from those of others….you can establish rights in a mark based on use of the mark in commerce, without a registration….Common law rights arise from actual use of a mark…”

• See: USPTO Trademark FAQs

Just because a competitor has not registered a phrase as a trademark with the U.S. Government doesn’t mean the phrase isn’t their trademark; it still might be considered an unregistered trademark.

Something to look for is whether they use the “TM” mark in association with something rather than the “Registered Trademark” symbol (the circle with an R).

If they are not putting “TM” (or “SM” for a “Service Mark”), then they aren’t doing a very good job of protecting their rights in that mark, an important fact to note if there is ever any court case around it (most marketing organizations are adamant about using “R”, “TM”, and “SM” the first time a trademark is used on any piece of collateral for this reason).

The bottom line is that if you register a trademark, it’s much easier to prove that you have rights in it. Google, for instance, has  a process you can follow if someone is using your trademark in their creatives, and if you can send evidence that your trademark is a registered one, that will go a long way to resolving a dispute in your favor. (Twitter famously uses trademark registrations as a factor in resolving situations of Twitter-squatting as well.)

If you’d like to see what a registration certificate looks like, you can do a trademark search yourself (per my instructions in the next section), then go to an individual record and click on the “TDR” button at the top, then see if you can find the “Registration Certificate”.

It should look something like the one below (full disclosure: I added the color version of the Google logo since the USPTO’s scanned black and white version was choppy and frankly, ugly.) Marks are generally submitted in black and white – this particular certificate looks like a re-registration that was issued about a week ago for the term [google].  I would not be surprised if there is another record in there somewhere in the system for the full color logo version however:

Figure 1: Google's Trademark Registration Certificate

How To Do Your Own Trademark Searches

If you’d like to see whether a competitor has registered a trademark, you can do some searching yourself. It’s important to note that the USPTO allows trademarks to be obtained for different classes of goods and services.

For instance, Hershey Ice Cream can have a trademark on the use of the word “Hershey” in association with ice cream, while Hershey (the large one you’re probably more familiar with) can have a trademark on use of the word in association with chocolate:

1. Go to http://www.uspto.gov/
2. Select “Trademarks->Trademark Search”
3. Select “Basic Word Search” (a “Word Mark” is just a phrase; a “Design Mark” is a stylized phrase or picture-based logo. If someone trademarks a word in a particular logo style but doesn’t register it as a Word Mark, then they possibly open themselves up to would-be infringers that just use a different logo style).
4. Search on the term.
5. “Live” means a trademark, or its application, is “Live”; “Dead” means either the application has expired or the trademark has expired.

Try it yourself for “iphone”; I just did and the search resulted in 37 records, some live and some dead.  The second-oldest is the Cisco-owned trademark that Steve Jobs famously convinced Cisco to license to Apple (see figure 2):

Figure 2: iPhone Trademark Record at the USPTO

4 Different Types Of Competitor Terms To Consider

Now that you have some sense of what terms your competitor has bothered to trademark and which they haven’t, there are a wide variety of terms worth exploring from a keyword research standpoint:

1.  The competitor’s company name

This is pretty much a no-brainer, many end-users typing company names are either deep into the research phase of the buying funnel; when they start investigating individual vendors, they are pretty close to converting.

2.  The competitor’s product names

Also a no-brainer, you probably already thought of this one.

3.  The competitor’s website name and variations thereof

Don’t forget that many people use browser toolbars to perform searches, and rather than typing Web addresses into the address bar, the often type them into the search bar (many people confuse the two). So you’ll find that your competitor’s website actually shows up as a keyword.

Variations worth considering include:

• foo.com
• www.foo.com
• http://www.foo.com
• http;//www.foo.com/

4.  The competitor’s model numbers, SKU numbers, or replacement part numbers

This is a very neat trick; if a potential customer is typing a SKU or Model number, it’s likely that they are even further along in the purchasing funnel than if they typed the generic brand name of the competitor. They have likely already done all their research, know exactly what they want, and they are about to convert.

An easy way to find lists of competitor SKUs (let’s say your competitor is “foo”) is to perform the following searches; if it’s a BtoB industry, distributors and resellers often put pricing lists up on their websites, and often large Government deals require publication of pricing from vendors:

• [foo price list]
• [foo pricing]
• [foo prices filetype:xls]

Don’t forget discontinued products. If you can find any old pricing lists and diff them against newer ones, any discontinued product names or numbers can be a treasure trove (and may even deserve their own creatives). B-to-B customers especially will search for old product numbers to identify a replacement product when it wears out.

ISBN numbers, UPC codes, or industry-specific product codes might be worth some research as well, if applicable.

Do Model Numbers, SKUs & Part Numbers Constitute A Trademark?

The answer is: perhaps, but in many situations, probably not. I couldn’t find much on the USPTO’s website on this, but I found a few interesting articles detailing some court cases and aspects of this question by one law firm and one legal services firm, it seems that it largely depends on how the number is used:

• Selling Letters and Numbers: A Court Stops a Company from Claiming Rights in Part Numbers And Why Businesses Should Care
• Trademark Examples: Slogans/Model Numbers/Taglines

One particular aspect I have a problem with on this is, it’s hard for me to see how someone can put “TM” in reference to a SKU in every document in which it’s used, since the whole idea is that a SKU number is a number that resellers, distributors, etc. can look up in a database and display.

So  it seems to me that it would be impracticable to show that you tried to protect your rights in a SKU or Part number when it’s all over the Web everywhere without “TM” on it.

However, if a number is used as a sort of a brand name that consumers would recognize, it appears that you actually *can* trademark it.

Here are two interesting examples:

Dale Earnhardt, Inc.,  has trademarked the number “1″ for a pretty wide variety of products including license plate holders, which seems pretty ridiculous if you think about it (aren’t something like 30-50 million drivers in the U.S. infringing this trademark every day?):

• Dale Earnhardt, Inc.”s Trademark for the Number 1

Levi-Strauss has a registered trademark for “501″ (which actually makes a lot of sense, since it really does function as a very recognizable trademark/brand name for their line of blue jeans):

• Levi Strauss’s Trademark for the Number 501

Check Keywords For Alternate Meanings Before Using

I would recommend using phrase match; that way, if a part number is 2139283423, you’ll also pick up some great lower-funnel variations like [2139283423 cheap], [2139283423 price] and so on.

However, if you’re trying to attract traffic focused on a competitor’s SKU (say, a steak knife set), and one of the variations it attracts traffic on is [2139283423 battery], that might be an indication that the term means something in another industry.

For this reason, it’s  important to test all keywords out in both Google Suggest and Google Search. If all the Google suggest searches seem to be related to the product or service you want to bid on, and the search results all seem to be related to it, then you have  a good candidate.

In a real-world example, a search of “ruby tuesday” clearly brings up the restaurant, which is great if that’s who you’re targeting, but a significant number of search results, and presumably searchers, are searching for the lyrics for the Rolling Stones song title “Ruby Tuesday”. That term may not be a great one to go after (or you could perhaps manage the situation by using negatives like [lyrics] and so on).

Often if you look in Google suggest, you can see whether the Model or SKU number means something in another industry right off the bat. Try typing the number, a space, and then try every letter of the alphabet to see what comes up.

Let’s say we’re a manufacturer of smartphones and we want to bid on Samsung’s “Stratosphere” Android smartphone. One of its SKU numbers is [i405]. Figure 2 shows the result of checking that term out in both Google Suggest and Google Search:

Google's Trademark Registration Certificate (source: USPTO)

Samsung does show up as a variation, but it’s easy to tell that many people searching on that term are interested in traffic conditions on the 405 highway in Los Angeles (I don’t know whey they bother searching, current traveling time is almost always “4..Oh..5..hours” ;-)

Checking against Google suggest can be a lot of work, but Ubersuggest is one way to speed the process. Don’t neglect doing the actual searches though, often a search will show query diversity not reflected in Google Suggest.

Typically, if you have a 6 to 9 character SKU number, it’s usually long enough to be unique, but sometimes you’ll run into another manufacturer in an unrelated field that uses a similar SKU numbering system.

As always, running Search Query Reports and put appropriate negatives in place is an important best practice regardless of the type of keywords you’re targeting.

Be Careful With Your Creatives

You might think this goes without saying as it should always apply to your paid search efforts, but I think it bears pointing out.  While it’s important to exclude competitor terms from your creatives, you should also make sure that any creatives you use are neither *misleading* nor *confusing*.

You shouldn’t trick searchers into coming to your website, even inadvertently. You certainly don’t want to attract any false advertising complaints, or create any fodder that could be used against you later in any legal proceeding.

For example, I would not personally be comfortable bidding on a competitors part number, and then using the vague creative “Replacement Parts: Best Prices Here”. I think a reasonable person would expect that if they clicked on that ad, they would be likely to be able to purchase the competitors part at my website.

A creative focused instead on the customer problem that my product or service solves, or perhaps describing my own offering in some specific way, would probably be much clearer.

Besides, telling the truth and being clear are just plain good business practices anyway! So write your creatives in such a way that they accurately represent the landing page, taking into account the keyword being searched on and the searcher’s likely intent.

What Results To Expect

Brand terms, and SKU/Models, on average, should have a very high click-through rate, perhaps twice the normal average.  They should also convert at a higher rate than the typical keyword.

In the ideal world, if you were targeting 800 competitor SKU numbers, you’d have 800 campaigns, each with one keyword and one ad group, and would include the SKU or Model in the creative, for maximum relevance, highest click-through rate, highest quality score, and lowest CPC after the AdWords auction adjusts for quality score.

In reality, you should probably not use the SKU or Model in the creative, even if a competitor has not trademarked those terms. Doing so is still more risky, in my opinion, from a legal standpoint, than just using the keywords as bidding targets. You’re likely to want to organize keywords together for convenience anyway, perhaps resulting in a few campaigns, a few ad groups, and a few creatives.

However, the low quality score you may experience as a result should be more than balanced by the fact that many of these terms are very long-tail in nature.

In my experience, the AdWords Keyword Traffic Estimator won’t return estimates for many of these types of term because the numbers are so low;  as a result, they’re relatively uncompetitive and inexpensive. If you have numerous competitors and competitor SKU numbers, the volumes should add up to a substantial number.

If you have high impression volume and high positions just about everywhere on your existing keywords, that may  indicate that increasing the budget or bids on existing keywords is not going to help much – what you need are more keywords.

If you run an analysis on keywords based on the categories above, you will often find that there is additional opportunity, on the order of 10-30% of your spend, available in those keywords. So, if you compete in a fragmented industry with many players, this strategy may be a useful way to expand an account to cover some relatively high-converting long-tail terms.

What About Your Own Terms?

Surprisingly, when you do this, you’ll often notice that your competitor isn’t even bidding on their own Website Address, Model Numbers, Part Numbers, or SKU numbers.

Are you doing so with your own? Doing so may be worthwhile, but there is also an argument for cannibalizing your competitors’ organic search traffic prior to cannibalizing your own organic traffic.

Be Careful Out There!

Again, none of this constitutes legal advice, you’re on your own with what you do. If you do decide to pursue this approach, then if a competitor complains about a particular keyword or set of keywords you are advertising against, the best policy, in my opinion, would probably be to simply stop using those keywords immediately.

If a competitor is bidding on your terms, why not at least complain, even if you’re on unclear legal grounds?

The ROI of writing up a threatening letter, putting a stamp on it, and sending it,  is probably pretty high if you can get your competitor to knock some high-converting keywords out of their campaign (unless of course, you’re awakening a sleeping giant by doing so – in which case – maybe you should just live with it).

Keep Up On The Issues As They Evolve

Shameless (but appropriate) plug for SearchEngineLand: Pamela Parker has been doing a great job covering this evolving area. If you’re thinking of pursuing a strategy like this, you’d be wise to read any SearchEngineLand coverage, going forward, particularly regarding the ongoing RosettaStone appeal.

Editor Postscript: This post was updated on 5/1/2012 to include the “Be Careful With Your Creatives” section.

The U.S. Court of Appeals for the Fourth Circuit today revived part of Rosetta Stone’s trademark lawsuit against Google, meaning the search giant’s permitting the use of trademarked terms in AdWords is still legally questionable in the United States. It’s the first time an appellate court has ruled in a case of this kind.

Previously, a federal court in the Eastern District of Virginia issued a summary judgment in the case in 2010, essentially saying that the language software maker didn’t have a valid trademark infringement claim against Google. Rosetta Stone appealed.

The company had accused Google of trademark infringement, contributory and vicarious trademark infringement, trademark dilution and unjust enrichment — all related to Google allowing advertisers to use Rosetta Stone’s trademarks as either keywords or ad text in its AdWords program.

Though the appeals court affirmed the lower court’s decision with respect to the vicarious infringement and unjust enrichment claims, the judges said the direct infringement, contributory infringement and dilution claims need to be sent back to the Virginia court for further action.

In the direct infringement matter, the appellate court believes the lower court didn’t properly or fully consider some of the evidence, especially where a likelihood of confusion is concerned. Additionally, though the district court applied the “functionality doctrine” in the case, saying that Rosetta Stones trademarks became a part of the function of Google’s technology, the appeals court said the functionality doctrine doesn’t apply.

On the subject of contributory infringement, at issue is whether Google knew or should have known that people using its service were infringing on Rosetta Stone’s trademarks. The court of appeals said this question deserves a closer look, rather than a summary judgment.

Additionally, the court of appeals found that the lower court hadn’t properly applied the legal precedents with regard to trademark dilution, so that matter needs to be reconsidered.

As you’ve no doubt read there are two pieces of anti-piracy legislation before the US Congress: SOPA and the PROTECT IP Act (“PIPA”). While their stated purpose is to prevent piracy, copyright and trademark violations in another sense they can be seen as media companies and others using legislation to protect their legacy business models.

SOPA has been widely written about and criticized. It’s now increasingly unlikely to pass in its current form — luckily. The less-exposed PIPA is equally bad in many respects and grants sweeping powers to private litigants and courts in the interest of protecting copyright owners’ property.

This explanation of what SOPA would permit comes from the New York Times:

Under the bill, copyright owners could direct payment providers like Visa and advertising networks like Google’s to cut off business to a Web site simply by filing notice that the site — or “a portion” of it —“engages in, enables or facilitates” intellectual property infringement or is being willfully blind to it . . .

If copyright owners could starve a Web site of money simply by telling a payment processor that the site was infringing on intellectual property, the bill could stymie legitimate speech . . .

Another provision would allow the attorney general to sue foreign sites that “facilitate” piracy, and to demand that domestic search engines stop linking to them and that Internet service providers redirect traffic . . . 

Despite the fact that SOPA isn’t law, a federal (district court) judge in Nevada named Kent Dawson is acting as though it is. Numerous articles have been written this week about his order to Google, Bing, Yahoo, Facebook, Twitter and others to  ”de-index” the domain names of literally hundreds of websites that luxury goods maker Chanel alleges sell counterfeit versions of its products.

Here’s the relevant portion of Dawson’s order (.pdf) regarding de-indexing:

The Group II Subject Domain Names shall immediately be de-indexed and/or removed from any search results pages of all Internet search engines including, but not limited to, Google, Bing, and Yahoo, and all social media websites including, but not limited to, Facebook, Google+, and Twitter until otherwise instructed by this Court or Plaintiff that any such domain name is authorized to be reinstated, at which time it shall be reinstated to its former status within each search engine index from which it was removed.

There are numerous procedural and jurisdictional problems with the case. In particular, Google, Bing, Facebook, Yahoo and Twitter are not parties to the litigation. The court has no jurisdiction or authority to order de-indexing of these allegedly offending sites. However, under SOPA it would have such authority to order social networks and search engines like Google to de-index sites without having formal jurisdiction over them.

The implications are pretty scary from a legal-due process standpoint and from a free speech perspective as well.

We reached out to both Google and Microsoft for comment and they offered official “no comment” statements. It’s in their respective interests to not comply with the court’s order. Doing so would validate the actions of a “rogue judge” exceeding his authority.

Postscript: Texas Republican Congressman Lamar Smith “blasted” Google’s opposition to SOPA as self-serving. However many of the bill’s supporters in Congress are responding to intense lobbying by commercial interests in the US such as the motion picture industry. The problem is not piracy, which everyone agrees is bad, but the potential authority granted private litigants and the courts on their behalf to seize domains, chill speech and shut down businesses, with limited due process.

The European Union’s Court of Justice has ruled in the long-running Interflora case against Marks & Spencer, which involves bidding on trademarked terms, and the decision is no clear victory for either party. Instead, it OKs trademark bidding so long as the resulting ad offers an alternative to the mark holder’s service and doesn’t cause dilution, tarnishment or adversely affect the functions of the trademark.

The case involved a situation in which retailer Marks & Spencer bid on the florist network’s trademarked keywords and phrases, including variants, in Google AdWords in the United Kingdom. Interflora accused M&S of unfairly trading on its trademarks.

Interflora, for its part, says it is “delighted” with the ruling. It does limit advertising including trademarked keyword bidding in certain cases:

• Where a reasonable internet user might be confused about the origin of the goods or services offered in the advertisement.
• Where it damages the trademark holder’s ability to maintain a good reputation or advertise itself successfully.
• Where the ad takes unfair advantage of the “distinctive character or repute” of the trademark or where the advertising harms the distinctive character or repute. An example would be if the advertising would contribute to turning the trademark into a generic term.

The final decision as to whether Marks & Spencer is liable in the case will come when the High Court of the UK applies the ruling of the European court. That’s expected to occur next year.

Previously, the European Advocate General had recommended against allowing trademark bidding.

In the European Union, Google permits the use of trademarks as keywords, except in cases where they would be “confusing as to the origin of the advertised goods and service.” It allows other uses such as competitive keyword bidding and bidding by resellers of the goods being advertised.

The watchdog group sued Google over deceptive ads back in 2007. The federal judge, Justice John Nicholas dismissed the case saying the Google was not liable for advertisers using competitors’ names and trademarks in their ads.

You can read the full court document over here.

A Google spokeswoman said, “Our guiding principle has always been that advertising should benefit both advertisers and users, and our aim is to ensure that ads are relevant and useful.” You can read the ACCC’s response to the ruling over here.

Related Stories:

• Australian Watchdog Sues Google Over Deceptive Search Ads
• Australian Watchdog Has Day In Court Over Google “Selling Top Spot”

Today’s decision involves five of the 50 defendants that Google originally sued: Bloosky, Just Think Media, Crush, Hyper Interactive, Search 4 Profit, and Viable. Google had previously settled with another defendant, Pacific WebWorks, last June.

The companies created a variety of online marketing schemes that used Google’s name, such as “Google Cash,” “Google Profits” and “Google Money Kit.” In its suit, Google said that not only do customers of those companies not get the chance to make money, but they also face monthly fees that range as high as $80/month.

Among other things, the settlement permanently forbids the companies from “using in any manner the term GOOGLE, any of Plaintiff’s Google Marks, or any terms phonetically or confusingly similar thereto in connection with the marketing, selling, offering for sale, displaying, promoting or advertising of work-at-home business opportunities, work-at-home products, and/or work-at-home services.”

As part of the settlement, none of the five companies are admitting that Google’s claims are true. And Google is dismissing its claims against the remainder of the original 50 defendants.

(Via TechCrunch. Image courtesy of Shutterstock.)

Image courtesy Shutterstock.com

The European Advocate General is recommending that the Court of Justice of the European Union rule against retailer Marks & Spencer for bidding on the trademarked terms of Interflora, the flower delivery network company.

If the Court of Justice acts on the findings, it could effectively spell the end of bidding on competitors’ trademarks in the European Union. Unlike other cases, like Luis Vuitton v Google, this case pitted the trademark owner, Interflora, directly against the advertiser bidding on the trademarked terms, rather than involving Google, or any other search engine, as an intermediary. In the Louis Vuitton case against Google, the search engine was awarded a victory last year.

Interflora is, understandably, pleased. “Together with our network of 1800 independent florists, we have spent a lot of time and money over the last 80 years building the reputation of the Interflora brand. We are known as ‘the flower experts’ and our brand stands for quality and service,” Michael Barringer, Interflora’s marketing director, said in a statement. “We are very proud of the Interflora brand and want to protect it for our customers, florists and the future.”

In the European Union, Google permits the use of trademarks as keywords, except in cases where they would be “confusing as to the origin of the advertised goods and service.” It allows other uses such as competitive keyword bidding and bidding by resellers of the goods being advertised. The Advocate General found whether the search engine allows trademark bidding or not is immaterial to the case, letting Google and other search engines off the hook.

The European Advocate General found that the trade mark owner is entitled to bar someone from using a trademark as a keyword, “in the case where that ad does not enable an average internet user, or enables the said user only with difficulty, to ascertain whether the goods or services referred to in the ad originate from the proprietor of the trademark or an undertaking economically connected to it or from a third party.” Additionally, he found that that the trademark owner has the right to bar the use of the term “when the competitor’s sponsored link is liable to lead some members of the public to believe that the competitor is a member of the trademark proprietor’s commercial network when it is not.”

The EU Court of Justice is reportedly expected to issue a ruling on the case within six months.

Thanks to Blogstorm.co.uk for the tip!

Image courtesy Shutterstock.com

A website builder and SEO firm has been held liable in federal court in a case in which it was accused of enabling the sale of counterfeit goods. Bright Builders faces a $770,000 fine for damages in the judgment, handed down in U.S. District Court in South Carolina last week, while its client was only fined $28,000.

The lawsuit was filed by the Roger Cleveland Golf Company, which makes golf clubs and related products, accusing Christopher Prince, the owner of the copycatclubs.com web site, of selling counterfeit Cleveland clubs. It also contended that Bright Builders helped Prince, and his company, Prince Distribution, to build a web site. This included helping with search engine optimization (SEO) — so that the site would come up on searches for Cleveland’s trademarked terms. Bright Builders denied the charges in a written motion, and hadn’t responded to a request for comment by publication time.

According to the plaintiffs, Bright — like many site hosting companies — provided SEO services, including review of the sites for search engine visibility, a “quick start” for marketing, keyword research, a “tune up” including a “keyword rich title and description,” along with submission of the site to more than 2,500 search engines and directories. The word “Cleveland” was embedded within the site metadata, the plaintiffs say, and the online store featured marketing copy advertising that, “we are your one stop shop for the best COPIED and ORIGINAL golf equipment on the internet.”

Additionally, the plaintiffs said that Bright Builders helped Prince find drop-shippers to provide products to the business. Because of its activities, Cleveland contended that Bright Builders should have known about the counterfeiting activities, and therefore contributed to the liability.

“For Internet Intermediaries like SEOs and web hosts, this should be a cautionary warning,” wrote Christopher Finnerty, a partner at Nelson Mullins Law Firm in Boston who represented Cleveland Golf and its parent company, Srixon. “The jury found that web hosts and SEO’s cannot rely solely on third parties to police their web sites and provide actual notice of counterfeit sales from the brand owners. Even prior to notification from a third party, Internet intermediaries must be proactive to stop infringing sales when they knew or should have known that these illegal sales were occurring through one of the web sites they host.”

Though Bright Builders, along with Prince, have been found liable in a jury trial, it’s unclear exactly what implications this case has for other SEOs or website hosts, in part because of the seeming lack of a vigorous defense. The attorney for Bright Builders submitted a very vague motion arguing that it be dropped as a defendant from the case, denying everything but failing to cite legal principles or provide supporting evidence.

“We don’t have a good sense of how likely it is that other web designers or SEOs/hosts will be sucked into the same liability trap,” writes intellectual property attorney Eric Goldman on his Technology & Marketing blog. “I do think we have some good reason to believe that courts are allergic to the entire ‘copycat’/'replica’ business. Those code-words aren’t fooling anyone.”

The ruling was done in an appeals court in the case between Network Automation and Advanced Systems Concepts. Both companies sell scheduling and management software and Network Automation purchased the keyword “ActiveBatch,” a trademarked product of Advanced Systems Concepts on the Google and Bing search ad networks. Advanced Systems Concepts sued Network Automation and won in court, but that was overturned in appeals court.

The reason the appeals court overturned the original decision was because the lower court did not take into account the landing page nor the ads being sectioned off and labeled as ads. Due to those facts, the appeals court felt there was no confusion as to the ad.

I should note that both Google AdWords and now even Microsoft adCenter share the same trademark rules, allowing advertisers to bid on trademark keywords, in many cases. Plus, advertisers can use the trademarked text in their ad, again – in many cases.

You can read Google’s official AdWords trademark policy as well. For the full court ruling, see this PDF document, courtesy of Gary Price.

Related Stories:

• Bing & Yahoo Align With Google’s Trademark Rules For Search Ads
• Google AdWords Trademark Case Goes To U.S. Court of Appeals
• Google Wins Legal Battle Over AdWords Trademark Issue In Europe
• Google Approves Anti-Google Ad Despite AdWords Trademark Issue
• Court Reversal Brings Surprising Loss For Google In AdWords Trademark Case
• Louis Vuitton Offers Google More Trademark Trouble In Europe
• Google To Allow Trademarks To Be Used In AdWords Copy In US
• Google Wins Legal Victories In Europe, US On Copyright & Trademark Issues
• AdWords Trademark Policy Q&A With Terri Chen, Chief Trademark Counsel

Image courtesy Shutterstock.com

A Federal judge in California has denied Google’s motion to dismiss a “false association” claim in Daniel Jurin’s case against it, surprisingly reversing his own previous rulings. Intellectual property attorney Eric Goldman reported the development in his Technology and Marketing Law Blog.

Jurin has been waging a legal battle against Google for years, alleging that the search engine’s AdWords program infringes on his “Styrotrim” building materials trademark.

Federal District Judge Morrison C. England, Jr. issued the ruling in response to Google’s motions to dismiss various parts of Jurin’s second amended complaint in the case, which accused Google of breach of contract, false designation of origin, and false association.

Though the Judge has dismissed most of Jurin’s claims, this time he declined to dismiss the false association claim. In the claim, the Plaintiff alleges that Google’s AdWords program and its keyword suggestion tool create confusion about who the producer of Styrotrim is, or whether competitors are associated with the product.

“Plaintiff alleges that internet users who enter the keyword ‘Styrotrim’ on Defendant’s search engine, and view the websites for Plaintiff’s competitors in ‘Sponsored Links,’ may become confused as to which company is the producer of ‘Styrotrim,’ or whether competitors are associated with ‘Styrotrim,’” the Judge wrote in his ruling.

Hold off on filing those lawsuits, though, because Google’s argument in the motion to dismiss was that it had to be a competitor in the building materials industry to be subject to the false association claim. The judge denied that rationale, but hasn’t yet made a final ruling in the case.

Goldman warns prospective plaintiffs that they shouldn’t see this as encouragement to file lawsuits. “Listen up, plaintiffs: this case only offers false hope! This is a bad ruling and Jurin will unquestionably lose in the end,” he wrote on his blog. “Don’t buy your lawyer a new boat when you could invest those dollars in a better product or more effective marketing.”