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Protect your trademark against abuse in sponsored ads

Sponsored links can bring your Web site lots of business, but you need to make sure that someone else isn’t using your good name to undermine your efforts.

Your competitor may be using your trademark illegally to lure business to its own Web site. If a competitor places ads under the heading "sponsored sites" or "sponsored links" on popular Internet portals such as Yahoo!, Google and Altavista and uses your trademark as a keyword, its ad will appear when someone searches for your trademark. Such a use of your trademark is often, but not always, an infringement of your intellectual property rights.

Here’s how sponsored sites and links work. A company "buys" keywords, e.g., "bar code reader" or "garage door opener" that its potential customers are likely to use when they are browsing the World Wide Web for information about products it offers. Whenever a person enters that keyword as a search term, the company’s ad appears on the page that displays search results. Clicking on the ad takes the potential customer to the company’s web site. The company pays the search engine provider a fee only when someone clicks through to its Web site.

More and more businesses are using these "sponsored" ads on search engines because of the accuracy with which this method matches ads to search terms. Some unscrupulous businesses have bid on their competitors’ names and trademarks with the intent of diverting potential customers searching for information about their competitors’ products to their own Web sites. Trademark owners must beware: If a competitor misuses your trademark in this way, the potential for confusion and lost business is high.

There are three things a trademark owner should do in case of trademark abuse:
1. If your trademark is not already registered, do so on a state and, preferably, federal, level. In the United States you can establish a trademark under common law simply by using it, but registering your trademark with the US Patents and Trademarks office gives you certain protections, including the right to collect damages for trademark infringement.
2. Send a strong "cease and desist" letter to the unscrupulous competitor, demanding that it stop abusing the trademark. A trademark owner usually cannot collect damages at this point, but if litigation ensues, the fact that it sent this letter may strengthen its case.
3. In parallel with the cease and desist letter, file a complaint with the search engine companies. Google has its own trademark complaint procedure, described at www.google.com/tm_complaint.html. Overture, a company owned by Yahoo! that provides other search engines with technology to match search terms and ads’ posts its procedure at www.content.overture.com/d/USm/about/company/trademarkinfo.jhtml for information.

More than a few businesses, including well-known companies such as Geico Insurance and Louis Vuitton, have complained to, and filed lawsuits against, Google and Overture to force them to stop selling keyword phrases that they claim violate their trademarks. Last year American Blind and Wallpaper Factory sued Google for selling its trademarks to competitors. Google responded by saying that it would block advertisers from buying keywords that directly infringe on American Blind’s trademarks, such as "American Blind," but that it could not block descriptive phrases such as "American wallpaper" and "American blind." In the mean time, Google sought a court ruling on whether its keyword advertising policy is legal. The courts have not decided either matter.

In April 2004, however, Google altered its policy, declaring that its US and Canadian advertisers could bid on any keyword, including trademarks. Google will review trademark complaints that relate only to the content of the ads. It will not disable keywords.

Overture’s policy is similar. It states that it will allow bids "only if the advertiser presents content on its Web site that (a) refers to the trademark or its owner or related product in a permissible nominative manner without creating a likelihood of consumer confusion or (b) uses the term in a generic or merely descriptive manner." Examples of nominative use of trademarks are descriptions of a person, place, or an attribute of a product or service when there is no reasonable alternative description, e.g., comparative advertising.

Filing a complaint may not stop the search engines from offering your trademarks to other companies, but if the dispute against your competitor ends up in litigation, it will put you on record as intending to protect your trademark.

The law in the United States is unclear about whether search engines are responsible for policing trademarks in paid searches. Critics claim that, by selling keywords that may be trademarks, the search engines are profiting from the trademark holders’ significant investments in their marks. Search engines counter that there is no infringement in the use of a trademark unless there is a likelihood of consumer confusion, that consumer confusion can arise only from the ads that appear on the screen and that their policy of monitoring trademark use in these ads will preclude this confusion.

Until the courts sort out these issues, which may be years, a trademark owner must take every opportunity to protect its trademark both by registering it and vigilantly prosecuting infringers. Given the popularity of the Internet as a marketplace for products and services, trademark owners must extend their fight to cyberspace.

David V. Radack is vice chair of the Intellectual Property Law Group at the national law firm Eckert Seamans Cherin & Mellott, LLC (www.eckertseamans.com).

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