Is Google Selling Paid Search Ads That Violate Trademark Law

Wendy Davis talked about EFF: Trademark Search Buys Protect Free Speech in Media Post’s Just An Online Minute last week.  “A federal appellate court is getting ready to decide whether Google’s method of selling paid search ads violates trademark law.”  Can you imagine if the entire concept of buying another company’s name on Google were to become a violation of trademark?


I know that “…the case is nearly identical to a lawsuit brought by insurance company Geico. In that case, a trial judge in December 2004 decided the key issue in Google’s favor,” but just imagine the possibilities.


First of all, every B2B player is guilty of buying their competitor’s name when buying search on Google, MSN, AOL and the other engines.  If that becomes a trademark violation it would be HUGE.  The number of keywords, and the combination of keywords would be drastically reduced that one could buy.  Furthermore, the keywords that remained available for one to buy would go WAY up in demand.  Words like ad server would shoot from $1-$10 to $50-$150! 


When my company buys all the other ad server’s names (which c’mon, we all do it) we buy it at reasonable auction rates.  But if we could no longer do it, we would be relegated to only buying descriptors.  Buying competitor names simply would no longer have a justifiable ROI.  And all of the competitors in the space would be competing for those descriptor terms too.  Search advertising as a whole would become terribly more expensive and far less justifiable.


My wife said to me last week, “did you know that the average person using the internet has no idea that the listings on the side of a search engine are paid listings?”  Of course I could not believe what she was saying, being so close to the industry myself.  My wife works in Healthcare Insurance and has no data to support her statement.  How could she possibly know what she was talking about I thought?  But I also thought about it for a minute and something else that my wife does came to mind.  She ‘surfs’ the Internet.  She literally sits in front of the computer and clicks on things late at night.  She follows links and goes places.  And I know this is a popular past-time.  I don’t do it.  I am very focused online, in-and-out, on-and-off.  I do what I am there to do and I get off.  Granted, I spend hours doing it.  But I never really surf.  So maybe she is right.  Maybe the average individual really doesn’t know those are paid listings.


If advertisers buy their competitors names, then there is a benefit to it all.  When a user types in a company name, competitors show up – giving the user other options to consider.  This is not good for the primary company that was entered, but it’s good for the other advertisers and it’s good for the user.  Take away the right to buy your competitor’s names and you lose all of those listings.


My wife also told me that she clicks on those side listings.  I do too sometimes.  The paid listings can get you to the products you want more quickly sometimes – especially the obscure ones.  If you know they are paid listings, nobody is getting hurt.  If you don’t know, you’re still benefiting.


Back to the negatives.  If you can’t buy your competitors names, all of those listings will no longer be there when you type in a company name, like Nike.  If I were type in Nike today, Adidas and Starter and some shoe companies would all pop up.  If you could no longer buy Nike, then only Nike would come up and the user would lose out.


Wendy says: “people use search engines to discover information not just about companies, but also about their competitors and critics. It’s easy to understand why some companies might not be happy with this state of affairs, but their recourse is to offer better or cheaper goods or services, or to counter critics with arguments, as opposed to filing trademark infringement lawsuits.”


Reactionary with Insight

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