Trademark Infringement Issues for Pay Per Click (PPC) Advertisers

Yahoo has just announced that it will no longer allow PPC advertisers to advertise or offer trademarked terms.

Could this be a trend of things to come from the other major search players?

MSN’s new adCenter (still in beta) states that trademark infringement is not allowed within its editorial guidelines (see policy below).

However, Google still takes a strong stance on allowing advertisers to bid on trademarked search terms, as long as the trademarked term is not used in the advertiser’s ad text.

numbers to consider

Next to click fraud, trademark infringement is the second biggest concern for pay-per-click (PPC) advertising. Of the total number of online searches, 20% are brand searches. That is, company-owned trademarks like “Pontiac” account for 20% of all search traffic. While 1 in 5 searches for trademarked terms may seem high, the majority of conversions do not originate from trademarked terms. A study by comScore and Yahoo Search Marketing (Overture) found that most shoppers do not search by manufacturer or product name. Rather, buyers use broad search terms that do not include the manufacturer’s name. General search terms account for 70% of total searches and 60% of total conversions.

Search Engine Policy on PPC Trademark Offers

Yahoo on Brands:

“On March 1, 2006, Yahoo! Search Marketing will change its editorial

guidelines on the use of keywords containing trademarks.

Previously, we allowed competitive advertising by letting advertisers

bid on third-party trademarks if those advertisers offered

comparative information about the products of the owners of the brands or

services compared to competing products and services

that were offered or promoted on the advertisers’ site.

In order to more easily deliver quality user experiences when

users search for terms that are trademarked, Yahoo! search marketing

has determined that we will no longer allow bidding on keywords

containing competing trademarks.

MSN AdCenter on Trademarks

“Microsoft requires all advertisers to agree that they will not bid on keywords or use in their ad text any words the use of which infringes a third party’s trademark or is illegal or infringes the rights of any third party.” party”.

Google AdWords in Brands:

“Google takes reports of trademark infringement very seriously and, as a courtesy, we are happy to investigate matters raised by trademark owners. In addition, our Terms and Conditions with advertisers prohibit intellectual property infringement by from advertisers and make it clear that advertisers are responsible for the keywords they choose to serve ads and the text they choose to use in those ads.

Solution or more problems

With all the engines moving towards a TM standard, it would have many benefits for both advertisers and search engines. This standard would be good for marketers who would have to be more creative in creating copy, creating more demand for qualified marketers, which would translate to higher rates. The search engines that host the ads would maintain revenue levels, but online PR firms stand to lose, as they would not be required to police their trademarked clients’ search engines. Lastly, the brand owner would still be protected and the user experience would not be affected.

Case study:

I’m currently working with an AdWords client in a situation where their competitors are bidding on their trademarked search terms. In addition to constant monitoring and reporting of trademark infringements used in the ads themselves, advertising spend to secure top positions for their ads has skyrocketed from an initial $2.00 per click to $15.00 per click. In addition, the monthly expense has increased from $1,200 to almost $30,000.

I have to get back to my client with an estimated budget of $500,000 for the rest of this year to control the space for his own trademark term. I’m reluctant to do that as it doesn’t make sense with Yahoo’s announcement of their new trademark policy. Given the level of aggression from competitors and the exorbitant cost my client now bears, there is only one solution and that is to stop all advertisers from bidding on the terms. In my opinion, it’s just not right that a business owner has to spend over $500,000 to buy their own brand term that has already cost them millions of dollars to build. This is more than $500,000 in revenue for Google that is being generated by a policy that goes beyond elementary business terms. Yahoo and MSN have recognized the unfairness of this policy and have taken steps to change it.

If we can’t address this policy on a case-by-case basis, then I have no choice but to inform my client that we can’t help him further and that his only option is to take legal action against Google.

Google also advises that you deal with individual advertisers, which is often impossible with private registries and foreign companies. You could dramatically add to your high costs by having to send cease and desist to all violators. Many will ignore you.

The classic bait and switch doesn’t seem to apply to the Internet. Many companies are okay with their terms being bought for comparison shopping and by resellers. The solution here is for those companies to give Google permission to let their resellers buy the name. With the strength and sophistication of Google’s technology, how difficult can this be? I doubt it would be any more cumbersome than filtering the search results for China.

Your Defense Against Trademark Violations

Website businesses where the majority of their revenue is generated through online sales rely heavily on search engines to drive traffic to their website. To defend against trademark infringements, you’ll need to conduct search audits at least once a month. You not only need to check organic search results but also paid search results or PPC contextual ads. You should look through the top 30 search listing results.

For organic search engine results, you need to look at both the questionable result and the site shown in the result. When reviewing a potential infringer’s site, don’t just review the content visible on the site; review the code also to discover hidden text, alternate image tags, and keyword meta tags that may include your trademarked names.

Then document your findings. For search engine results and PPC results, use a “screenshot” of the page showing the trademark infringement. For trademark violations that are visible on a website, save the full page code as a .txt file.

What if you see a violation in organic search results, but when you click through to the page, there is no violation? They may be using a covert page that includes their trademark. To verify this, you will need to see the search engine’s cached page in the file. Be sure to keep a copy of this code as well.

You will need to properly document your findings by dating the violation and full contact information for the site owner. Use http://www.dnsstuff.com to get the site’s whois information. Once you have all of this documented, you’ll need to submit your findings to the appropriate search engine.

You may also want to take the legal route, in which case you should keep a record of all your paperwork to present to your legal advisor.

The best way to collect evidence is to hire a third party to collect evidence against the infringer of your trademark or copyrighted material. Recently, at Search Engine Strategies in New York City during February 2006, Deborah Wilcox, a partner at Baker & Hostetler LLP, who specializes in the legal areas of copyright and trademark law, said, “Use a third party to print and audit the search results. If the case goes to court, you’ll need hard evidence for the judge.”

Get in touch with search engines

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

Google

Google Corporation.

Attention: Google AdWords, Trademark Claims

2400 Bayshore Parkway

Mountain View, CA 94043

yahoo! search marketing

Formerly: Overture Services, Inc.

Attn: Business and Legal Affairs – Trademarks

74 N. Pasadena Ave., 3rd Floor

Pasadena, California 91103

Fax: 626 685-5601

Microsoft Corporation

Attn: MSN Search Trademark Concerns

A form of Microsoft

Redmond, WA 98052

USA

Trademark Infringement Resources

International Trademark Association

American Center for Patent and Trademark Law

Internet patents, copyrights, trademarks and legal issues

Trademarks on the Internet

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