How can a Trademark be used in Keyword Advertising?

The reality is people can bid, or users can bid on any kind of a word. It just so happens that some words that people bid on are trademark protected. They can be trademark protected in one of two ways. They can be registered trademarks, with either the United States Patent and Trademark Office or some other country's registration office. Or they can be common law trademarks. The mere difference is one is actually registered whereas the other relies upon the common law, since they made use of a distinctive trademark in commerce. What happens is someone can go and say I want my sponsored advertisement to appear when that particular trademark is searched. For example, if Nike has some third party bid on their keyword Nike, so that third party's product or service appears when Nike is searched by a user, that's how a trademark can be used in key word advertising.

Welcome to Trademark Law Radio, a top web resource on issues of trademark infringement, trademark licensing, trademark protection, and trademark registration. 

Matt: Hi, it's Matt Plessner for Trademark Law Radio. We're going to be talking about key word advertising today. To help us understand that better we have Attorney at Law Brian Hall from Traverse Legal in Traverse City, Michigan. Brian, how are you?

Brian: Doing well. Thanks Matt.

Matt: Good to hear. Now, could you please tell us exactly what is keyword advertising?

Brian: Sure, key word advertising really refers to advertising done online, typically with the major search engines. That could be Google, Yahoo, Bing, or maybe some others. What key word advertising does is it allows an individual to, essentially, purchase key words, and when a user inputs that key word as part of a search in a search engine, such as Google they can have advertisements appear in the search results. Those advertisements appear typically as sponsored or paid advertisement results, either on the side or in some other place, other than the natural search engine results that would appear in Google, Yahoo, or Bing.

Matt: Brian, how can a trademark be used in keyword advertising?

Brian: Well, that's a good question. The reality is people can bid, or users can bid on any kind of a word. It just so happens that some words that people bid on are trademark protected. They can be trademark protected in one of two ways. They can be registered trademarks, with either the United States Patent and Trademark Office or some other country's registration office. Or they can be common law trademarks. The mere difference is one is actually registered whereas the other relies upon the common law, since they made use of a distinctive trademark in commerce. What happens is someone can go and say I want my sponsored advertisement to appear when that particular trademark is searched. For example, if Nike has some third party bid on their keyword Nike, so that third party's product or service appears when Nike is searched by a user, that's how a trademark can be used in key word advertising.

Matt: What are the courts held regarding liability for trademark infringement in key word advertising?

Brian: That's a great question and there's really two types of scenarios that have appeared in courts of law throughout the United States and actually throughout the world as it relates to trademarks in key word advertising. The first is where trademark owners file a trademark infringement lawsuit against an individual or an entity who has actually bid on a trademark protected key word so as to have that third party's advertisement displayed.

In that first scenario what happens is the trademark owner says that third party who's bid on the key word, is making a use in commerce of their trademark and it creates a likelihood of consumer confusion. Therefore it shouldn't be allowed, and the trademark owner is entitled to damages. The reality is the courts haven't been very clear on whether or not you can satisfy the test for trademark infringement. Which is really that likelihood of confusion test as well as making sure that there was the use of the mark in commerce.

What I always say is, and I don't just say this because I'm a trademark attorney, I think if you talk to any trademark attorney or trademark lawyer they would say the same thing. You need to look at your particular jurisdiction to see whether or not the courts have held, that this kind of bidding and use of key words or, excuse me, trademarks in key word advertising amounts to trademark infringement. That's the first scenario and the first set of cases.

The second one actually deals with trademark owners filing trademark infringement lawsuits against a search engine operator, such as Google. The case that's in the news right now is where Rosetta Stone filed a lawsuit against Google, saying that they used Rosetta Stone's trademark as keywords or, excuse me, allowed third parties to use Rosetta Stone's trademark as key words, in advertising. What happened in that case was, it was a case out of Virginia, that the court held, that there couldn't be any liability for Google. However, when that case when up on appeal to the fourth circuit court of appeals, that court essentially has said that there could be a likelihood of confusion and a sustainable trademark infringement action. Therefore, it's been remanded back down to the district court to be addressed.

Matt: Now Brian, regarding all this do these laws vary by country?

Brian: Yes, they do. That's what makes it even more difficult. Ultimately it varies from country to country, and it's similar to how it varies from state to state, or jurisdiction to jurisdiction in the United States. One common example is if you look at Google advertising of key words and use of third party trademarks. In the United States, as long as you're not using the trademark owner's mark in the actual advertisement itself, or in the text of the advertisement, you can bid on the key word under Google's policy. However, that policy is different in foreign countries such as France or the European Union. Where Google may not allow such bidding. Or if they do they may allow actual use of the trademark itself in the key words and in the advertisement itself.

Matt: Well thank you Brian. One final question for you. What should companies that own trademarks do about key word advertising?

Brian: Well, they need to be vigilant about protecting their trademarks and that includes online. The primary way that people are using third party or, excuse me, trademarks online is in key word advertising, domain names, and other type areas. It's critical that they do Google searches or other search engine searches, of their trademarks and see what the results are. If they're seeing that competitors are coming up as sponsored advertisements when their trademarks are searched they may have a causative action for trademark infringement. They should do that not only for trademarks they have registered but also for any brands, company names, names of owners or key personnel in their company, whatever it might be so as to ensure that there isn't trademark infringement based upon the key word advertising of others.

Matt: Again, we've been speaking with trademark attorney Brian Hall from the Traverse Legal Office. Brian, I want to say thanks for hanging out with us today.

Brian: Thanks a lot Matt. I appreciate it.

Matt: This is Matt Plessner. Join us next time on Trademark Law Radio.

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