Internet search engines such as Google and Yahoo! earn a majority of their profit from selling advertisements to appear next to search results. Google's coveted advertising space, however, causes nightmares for trademark holders when their trademarks are auctioned by Google to competitors as keywords to trigger the competitors' advertisements when the trademark is used as a search term. Advertisers strategically bid on trademarks of competitors to ensure that their ads appear whenever the trademark is used as a search term, instead of the advertisements of the trademark holder. For example, Nike could bid on the trademark for "Adidas," with the result that Nike ads appear whenever a computer user searches for Adidas. This strategy can allow advertisers to gain visibility by having their ads appear next to search results of a competitor, often a more popular brand. Advertisers also admit to employing the strategy for the purpose of drawing consumers to their websites, and away from the website of the trademark holder.
Trademark holders object to this practice on the basis that it allows competitors to free ride off the goodwill and reputation of a trademark when used for the specific purpose of diverting consumers. Because Google derives such a large share of its revenue from advertising, it has been loath to cater to the desires of trademark holders and restrict the sale of keywords as advertising triggers, instead choosing to allow the use of keyword triggers in countries such as the U.S. where the courts have not taken an aggressive stance against search engines on the issue.
Courts both inside and outside the U.S. have struggled to resolve the issues of trademark use and likelihood of consumer confusion in a way that promotes fair competition while also upholding policies that protect trademark owners' rights, including those of the mark's reputation and goodwill. Now that courts are in agreement that the sale or purchase of a trademark keyword constitutes a use in commerce, claims will boil down to the issue of a likelihood of confusion.
Because the harm of a keyword case--misappropriation of a mark's goodwill--falls on the trademark owner, rather than the consumer, this Note proposes that keyword plaintiffs should not have to prove the element of consumer confusion. Rather, the defendant's intent to divert consumers and free ride off the mark's goodwill should replace the element of confusion. This Note examines the doctrine of initial interest confusion as evidence that courts are already moving in this direction. Finally, the Note argues that, rather than precluding the development of case law, Google and other search engines should help remedy the situation by adopting policies that are more favorable to trademark holders and consistent across national boundaries.
Rachel R. Friedman,
No Confusion Here: Proposing a New Paradigm for the Litigation of Keyword Advertising Trademark Infringement Cases,
12 Vanderbilt Journal of Entertainment and Technology Law
Available at: https://scholarship.law.vanderbilt.edu/jetlaw/vol12/iss2/4