Trademark infringement and pay-per-click (PPC) advertisers

Online brand names and trademarks are not fully protected by law.

Trademarks distinguish your brands from your competitor’s brands. They reflect on your reputation and your identity. Successful brands and trademarks are the results of serious investment of time and capital. The goal is to give you an advantage over your competitors. Trademark infringement issues are of great concern to online Pay-per-Click (PPC) advertisers. It is estimated that twenty percent (20%) of all searches online are trademark searches. Businesses around the world are losing millions of dollars because of trademark infringements. It also drives the price of PPC ads upwards.

While 1 in 5 searches for trademark terms may seem high, most conversions do not originate from trademarked terms. A study by comScore and Yahoo Search Marketing (Overture) found most buyers do not search by manufacturer or product name. Rather, buyers use broad search terms that do not include a manufacturer’s name. Broad search terms account for 70% of total searches and 60% of total conversions.

Companies often bid on the brand names of their competitors. This means that when a searcher types in your brand name the ads for your competitors appear. They click on your competitor’s site thinking it is related to your site. This is basically a form of bait and switch fraud, which offers your customers an alternative brand to your product.

Currently it is possible to stop all advertisers from bidding on the terms within Yahoo and MSN. Google is the only one of the top three search engines that still maintains a strong stance in allowing advertisers to bid on trademarked search terms -as long as the trademarked term is not used within the advertiser’s ad-copy.

Defending Your Brand Against Trademark Violations

To defend against trademark violations it is advisable to conduct search audits at least once every month. The search audits should include:

• Organic Search Results • Paid Search Results • PPC Contextual Ads

If there are sites listed that use your trademark look at both the questionable result that is listed and also the site displayed in the result. When looking over the possible violator’s site, don’t just look over the visible content on the site; look over the code as well to uncover hidden text, image alt tags, and keyword meta tags that may include your trademarked names.

There is also the possibility that they may be using a cloaked page, which includes your trademark. To check this out, you will need to view the search engine’s cached page on file.

If there is evidence of a trademark violation document all of your findings by dating the violation as well as the site owner’s complete contact information. Obtain Whois information for the site. For both organic and paid results, use a “screen capture” of the page displaying the mark infringement. For mark infringements that are visible on a website, save the entire page’s code as an .htm file. Once you have all of this information documented, you should send your findings to the appropriate search engine.

You also have the option to take legal action. In this case you should present your complete set of records to your legal counsel. You may want to gather evidence by hiring a third party to collect evidence against the infringer of your trademark or copyrighted material.

Individual Search Engine’s Policy on Trademarks

Yahoo on Trademarks: "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 owner's products or services in comparison to the competitive products and services that were offered or promoted on the advertiser's 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."

MSN AdCenter on Trademarks “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”.

Google Adwords on Trademarks: “Google takes allegations of trademark infringement very seriously and, as a courtesy, we're happy to investigate matters raised by trademark owners. Also, 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.”

Solution or More Problems If all search engines move toward a trademark policy standard, it would offer many benefits to both advertisers and searchers. This standard would be good for marketers who would have to be more creative in their copy creation creating increased demand for qualified marketers which would translate into higher fees. Search engines hosting the ads would maintain revenue levels, but online public relations firms may lose out as they would not be required to police search engines for their clients with trademarks. Finally, the trademark owner would continue to be protected and user experience would not be affected.

Trademark Case Study A Google Adwords client, who is a leader in the very competitive Network Marketing field, recently noticed a surge of infringements against their trademark which was being used in competitor ad copy on the Google Network. Competition within the Network Marketing industry is extremely competitive and aggressive.

The client became aware that their competitors were bidding on their trademarked search terms. This caused the cost to secure top positions for their ads to skyrocket from an initial $2.00 per click to $15.00 per click. Monthly expenditures increased from $1,200 to nearly $30,000. The estimated budget increased to $500,000+ for the year. Control of the top ad space in Google was their primary objective in order to dominate the ad-space for their branded trademarked term.

As advisors to the client we were reluctant to suggest that they increase their spending especially in light of Yahoo’s new trademark policy. Given the level of aggression by the competitors and the extortionate cost been borne by the client, there was only one solution and that was to stop all advertisers from bidding on the terms.

Is it right that a business owner has to spend $500,000+ to buy their own branded name – a name that has already cost them millions of dollars to build? This is $500,000+ in revenue for Google which is being generated by a policy that disavows elementary business ethics. Yahoo and MSN have recognized the injustice of such a slippery-slope policy and have taken steps to change it.

Because Google lives and dies by a “what’s good for the goose is good for the gander” credo, Google did not treat this policy uniquely. We had no alternative but to advise the client that we could not help them any further and their only option was to resort to legal action against Google if Google was going to continue to allow competitors to use our client’s trademark within their ad-copy who were deliberately trying to confuse the searchers who were searching on our client’s trademarked terms.

One part of Google’s guidelines is that it advises that trademark holders to take the matter up with individual advertisers. In many cases this is impossible because of private registrations and foreign-based companies. The additional costs in time, material and money are again absorbed by the trademark owner, if trademark owners have to send cease and desist orders to all infringers. Which begs the question, “what number of trademark infringers would respond to such an order?”

The conclusion is that protection from classic bait and switch infringement tactics does not seem to apply to the Internet. The obvious solution is for Google to create two-pronged approach: trademark owners allowing or not allowing trademarked terms to be bid on in Google would have to be indexed in a database which would automatically grant or deny the use of a Trademarked term to a Google advertiser.

Contact the Search Engines You can also contact the search engines directly if you believe an advertiser is infringing on your trademark. The respective search engine contact information is below.

Google adwords-support@google.com Google Inc. Attn: Google AdWords, Trademark Complaints 2400 Bayshore Parkway Mountain View, CA 94043

Yahoo! Search Marketing trademarkconcern-ysm@yahoo-inc.com. Formerly: Overture Services, Inc. Attn: Business & Legal Affairs - Trademarks 74 N. Pasadena Ave., 3rd Floor Pasadena, California 91103 Fax: 626 685-5601

Microsoft Corporation Online Trademark Concern form Attn: MSN Search Trademark Concerns One Microsoft Way Redmond, WA 98052 USA

Trademark Infringement Resources International Trademark Association www.inta.org American Patent & Trademark Law Center www.patentpending.com Internet patent, copyright, trademark, and legal issues www.bitlaw.com Trademarks on the Internet www.bitlaw.com/trademark/internet.html