Inside Trademarks Trademark Analytics, Research & Strategy

An Understanding of Keyword Advertising and Trademarks is Critical to Internet Marketing Success (Part III)

Part III in a series of excerpts from the upcoming Inside Trademarks™ Advertising Guide (2010).

Trademark Law and Keyword Advertising

A number of trademark infringement cases involving keyword advertising have gone to court over the past decade, however, the courts are still playing catch up when it comes to applying trademark law to keyword advertising.

The courts lag in addressing this issue is not entirely their fault. The majority of keyword advertising cases brought in the U.S. are settled out of court and do not proceed to trial - leaving courts unable to make legal decisions on issues brought in these cases. This has left many unanswered questions on the issue of whether the sale or purchase and use of a trademark as a keyword to trigger Internet advertisements is trademark infringement.

To successfully bring a keyword-based trademark infringement suit, a business has to prove: (1) the infringing use of the trademark as a keyword is a "use in commerce", meaning that the good or service at issue is being sold; (2) the use of the trademark as a keyword has or is likely to confuse typical consumers; and (3) the use of the trademark as a keyword is not protected by any defenses, including license (e.g. permission from the brand owner), nominative fair use (e.g. product comparison), descriptive or generic use, or resale.

So far, courts trend towards ruling that: (1) use of a trademark as a keyword is a "use in commerce", but that use alone is not enough to show likelihood of consumer confusion; and (2) use of a trademark in ad copy is a "use in commerce", but courts must conduct case-by-case analysis in the context of how the advertiser uses the trademark in order to determine whether the use is proper and legitimate, or improper and confusing to consumers. 

Court decisions to date also indicate that brand-owning businesses will need detailed evidence, e.g. surveys based on observation and sampling of how Internet consumers perceive and interact with keyword campaigns based on their trademarks, to show consumer confusion.

Pre-Order the Inside Trademarks™ Advertising Guide (2010) for more insight into how to use developing trends in trademark law to your advantage in keyword advertising campaigns.  See our earlier posts from this series (Part I and Part II).