Can I Bid on a Competitor's Trademarks on AdWords?

morguefile.com/ppdigitalbidding-on-competitors-keywords-copyright-infringementIf you have ever developed metatags or researched pay-per-click keywords to help your company's website rank for search results, you may have felt the urge to use the names of of your well-known competitors. If someone starts out looking for a competitor and ends up coming to you instead, not only is it good for your business, but it's one less loyal fan for the competitor. As it turns out, however, this might not be the best idea-at least not right now.

In the early days of commercial use of the Internet (remember those days? They weren't that long ago.), it was not unusual for one company to slip a competitors' trademarks and brand names into its website's metatags, or to "hide" names in the site's background, or try other tricks to compete when a potential customer was searching online for a business. As these practices lost favor with the major search engines, more companies began bidding on competitors' trademarks as keywords for pay-per-click advertising campaigns.

Not surprisingly, the companies who were losing placement wars to their competitors weren't too happy about this, and trademark infringement lawsuits started popping up alleging trademark infringement by both (a) the keyword-purchasing competitor, and (b) the search engine that sold the keyword bids and advertising placement.

As the body of case law dealing with trademarks and keywords began to grow over the last decade, courts in different jurisdictions took different approaches to the issue-and often reached different outcomes. For example, while some courts have found both the sale and use of "trademarked" keywords to be unlawful trademark infringement, others have said that there isn't a sufficient likelihood of confusion (the test for trademark infringement) to give rise to liability. These courts have frequently relied on the visual layout of search results and the growing general understanding of how search engines work to find that consumers will either (a) be smart enough to look out for the issue, or (b) turn back and keep searching if a search link doesn't take them where they wanted to go.

However, one important trend is emerging. Where use of a competitor's trademarks in metatags or keyword bidding is just one of several alleged infringing activities, some courts seem to be willing to consider this as evidence of intent to cause confusion-a factor that often weighs in favor of a finding of trademark infringement. In short, the courts seem to be saying that companies who purchase competitors' trademarks as search engine keywords or use them as metatags are probably doing so because they see value in the competitors' marks, and believe that they will be able to capitalize on this value when consumers search for their competitors. Not exactly a novel concept, but one that is increasingly more important to recognize as it works its way into the common law.

As a result, companies need to be careful about their keyword selection. On the opposite end, if a competitor is using your trademarks to win search traffic, the success of your claim for trademark infringement might depend on where you are able to bring the case.

 

Jeff Fabian assists business owners in protecting their brands so that they can stay focused on running their businesses. Visit www.fabianip.com for more information, and follow Jeff on Twitter @FabianOnIP.

This article is provided for informational purposes only, and does not constitute legal advice.

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