Keyword-Linked Advertising and Trademark Infringement

January 30, 2009

Educomp Solutions is using AdWords, a Google advertising option on the Internet that allows users who spot these ads to click on a link that opens a page on the advertiser’s website. When people search on Google using one of the advertiser’s keywords, the ad may appear next to the search results.

According to a news report, the education solutions provider, Educomp’s resort to this innovative way of advertising is an attempt to ward off the consequences of malicious e-mails alleging account manipulation. The webpage on the website of Educomp Solutions contains clarifications addressing the allegations about the company that were circulated.

The major search engine companies Google, Yahoo! and MSN among them generate revenue from their sale of search terms as a way to generate advertising revenue. AdWords, Google's flagship advertising product and main source of revenue contributes about $16.4 billion (Rs 78,720 crore in 2007). AdWords offers pay-per-click (PPC) advertising, and site-targeted advertising for both text and banner ads. A customer may purchase one or more “keywords.” When an Internet user enters one or more of these keywords in a search engine, the search results screen, in addition to the list of the organic search results, shows “Sponsored Links” to the websites of the companies or persons who purchased the keywords. The hyperlinks are displayed in a separate column labeled “Sponsored Links” to the right of the search results (and sometimes at the top of the search results). The links are typically displayed with a short text advertisement for the “sponsor” or the sponsor's website.

Keyword purchasers may purchase keywords that are descriptive of their goods and services. Purchasers have, however, also purchased as keywords the trademarks of their competitors. The paid search term or keyword may or may not be used in the sponsor's advertising text.

As the use of search engines becomes more and more omnipresent in the business and personal lives of Internet users, the controversy surrounding use of trademarks in keyword advertising has increased while underscoring the tension between trademark owners and Internet search companies and the level of protection that should be accorded to trademark owners in the age of the Internet.

An expert consultant on computer and technology laws expresses that in the event of a competitor embedding the trademarked word into a list of keywords, every time the word is entered into a search engine, another manufacturer’s goods or website would appear which would be an obvious misuse of a trademark. According to the consultant ‘Keyword-Linked Advertising’ raises some pertinent issues:

A company’s trademark may be used without authorization by search engines and directories in advertising sales practices.
Comparative advertising practices.
Are visitors to websites sophisticated enough to realize they are being led by advertisements which are directly linked to the words they are searching for?
Are they able to differentiate between ‘use’ as defined in relation to trademarks, and merely being misled by savvy advertisers? Even if the chance of confusion is small, does that make it acceptable?
Are search engine owners responsible for the alleged infringement, or is the site-owner that has purchased the keyword culpable? Should portal operators be required to ‘purify’ the use of keywords and ensure that trademarks are not used in an unlawful manner?
How distinctive must a trademark be to have success in a case of keyword use? Can only unique, coined words be proper subject matter for protection against use as ‘keywords’?

A trademark owner mandated by trademark law if aware about a potential unauthorized use of his mark, he must seek to prevent the same.

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