Among online advertisers using pay per click type ads, such as Google’s Adwords and Yahoo Search Marketing you hear a lot of talk about click fraud and surely click fraud is the largest problem facing PPC advertisers. However, little attention is paid, in the media and in wholesale trade publication covering the unfair practice of trademark infringement by advertisers.
Trademark infringement by PPC advertisers usually takes one of two forms. Either an advertiser includes a registered brand name in their advertising, as was the case in a suit brought against Google and Yahoo in 2004 by the GIECO auto insurance company. In this case other insurance companies were paying to appear as a search result when Internet users entered GIECO or GIECO Direct as a search term.

The courts determined that Google’s sale of GEICO trademarks as keywords was not unlawful. But GEICO established a likelihood of confusion with regard to those sponsored links that use GEICO’s trademarks in their headings or text. So the sale of GEICO as a keyword was lawful; but ads that included GEICO’s marks in their text were not. If the keyword GEICO triggered an ad without GEICO’s marks in its text, there would be no infringement.

In other circumstances an advertiser will include a rival company’s web address as a paid search term. For example, a company selling wholesale sunglasses might have a rival whose domain name is bettersunglasses.com. They then spend PPC monies to have their ad appear in the results for that domain name.

It is estimated that approximately 20% of all Internet searches are for trademarked terms such as urls or brand names. It should be kept in mind that most Internet users do not search by manufacturer or product name. Generally searches use broad terms that do not include a manufacturer’s name. This kind of search terms account for 70% of total searches and 60% of total conversions to web site visits.

The different PPC providers have differing policies regarding advertisers placing bids on trademarks belonging to other companies or entities. Below are the relevant texts taken directly from the terms of service for three of the biggest search and PPC providers, Google, Yahoo, and MSN.

From MSN;

Microsoft requires all advertisers to agree that they will not bid on keywords, or use in the text of their advertisements, any word whose use would infringe the trademark of any third party or would otherwise be unlawful or in violation of the rights of any third party.

From Yahoo Search Marketing;

On March 1, 2006, Yahoo Search Marketing will modify its editorial guidelines regarding the use of keywords containing trademarks. Previously, we allowed competitive advertising by allowing advertisers to bid on third-party trademarks if those advertisers offered detailed comparative information about the trademark owners’ products or services in comparison to the competitive products and services that were offered or promoted on the advertisers’ site.

In order to more easily deliver quality user experiences when users search on terms that are trademarks, Yahoo! Search Marketing has determined that we will no longer allow bidding on keywords containing competitor trademarks.

From Google;

Our terms and conditions with advertisers prohibit intellectual property infringement by advertisers and make it clear that advertisers are responsible for the keywords they choose to generate advertisements and the text that they choose to use in those advertisements.

On the surface it looks as if all three search engines prohibit the use of trade marked phrases in a competing company’s keywords but it isn’t as simple as that. All three and especially Google place the onus of identifying trademark infringement on the victimized party and documenting these violations can be a time consuming and expensive chore. Most PPC provider have a dispute resolution system but want to avoid any overly direct connection with the trademark violation and so encourage the parties involved in a dispute to settle the problem between themselves but the if a company is willing to violate a copyright it is reasonable to assume that they might not work with their victim in straight forward and meaningful manner. Sometimes dealing with the violation even requires hiring of a third party to gather evidence if the trademark violation leads to a lawsuit.

In order to protect against trademark infringements an advertiser should conduct search audits at least once month. You not only need to look over organic search results, but also paid search results or PPC context ads.

Art Micklewraith is a freelance writer and regular contributor to Top Ten Wholesale. He can be reached at Content and Solutions or by email at artmicklewraith@gmail.com.