Google, PPC Campaigns and Trademark Infringement Lawsuits

I think I was a lawyer in a previous life... but in this one I didn't want to put in the extra years of university.

However, I love to bite into a good legal question... and these days the question of whether putting a competitor's trademarked term as a keyword in your pay per click campaign is legal or not comes up from time to time.

I hope to help clarify the current status of the answer to that question here... but first, let's look at two scenarios...

Scenarios:

There are two scenarios companies tend to complain & sue about:

Scenario 1: Someone searches on ‘Competitor A’, and Competitor B’s ad appears. Competitor A is not referred to within the ad.

Scenario 2: Someone searches on ‘Competitor A’, and Competitor B’s ad appears. Competitor B’s trademarked term is included in the ad.

Current Practices & Norms:

- Google’s policy in both the US and Canada is that Scenario 1 is allowed.

- Feb 9, 2006 – latest case on this issue. ‘Check ‘n Go’ sued Google for the same issue. It hasn’t been settled or gone to court yet.

- March 30, 2006 -- The most recent US case which backs up Google’s policy is Merck v. Mediplan, where the judge ruled that there was nothing improper with the defendants’ purchase of ‘Zocor’ as a keyword in a PPC search campaign. The Merck v. Mediplan Ruling is here.

- March 20, 2006 – A ‘substantive ruling’ for another case - Edina Realty, Inc. v. TheMLSonline.com - contradicted the above ruling and has just been okayed to head to trial. The substantive ruling for Edina Realty, Inc. v. TheMLSonline.com is here.

- Aug 2005 -- Prior to these cases, the most significant precedent was the GEICO vs. Google/Yahoo case which was brought to court in the US in 2005. Which just goes to show that in the US, even obnoxious little lizards have lawyers. Yahoo settled before it went to court – Google didn’t.

The judge made a ruling in this case and then later provided a clarification of the ruling in Aug 2005 which can be interpreted that Scenario 1 is okay, but Scenario 2 is not, since (as per the judge) it causes confusion.

Google then settled with GEICO in regards to the Scenario 2 issue. Here's the judge's clarification on GEICO vs. Google/Yahoo.

Bottom Line

So what is the bottom line in all of this? Here's my advice ( but like I said, I'm not a lawyer, so check with yours if you decide to take it):

I think you are probably still 'in the right' if you include competitor's keywords as a search term. (ie. Scenario 1)

But even if there are some PPC engines out there that still allow you to include their trademarks in your ad, I probably would avoid that. (ie. Scenario 2)

If you are the nervous type (who wants all those nasty legal letters delivered by courier even if you are justified? Yuck), then consider the tradeoff between removing the competitive terms from your campaign and the exposure/conversions you'll lose if you do.

I'm $500/hr if your lawyer wants to discuss this with me.