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Search Engines and Legal Issues

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Combating Search Engine Fraud and The A competitor is running a search engine ad with your trademarked brand name. Another has copied your web site without permission. You suspect another of driving up your advertising costs through click fraud. What are your legal options?

A special report from the Search Engine Strategies conference, December 13-16, 2004, Chicago, IL.

What can you do to protect your site from these online thieves? At this session, a panel of experts explored a wide range of issues related to search engines and legal protection.

Copyright infringement

Copyright protection for a web site is just as enforceable as it is for traditional media. U.S. copyright law states that electronic files—including web files—are copyrighted the moment they're put into a tangible form, even if they're not on display to the general public. Protected web files may include the site's content, code, scripting, graphic images, sound and video files.

"One way to determine if your site's content has been stolen is to use the search engines," said Matt Naeger, Vice President and General Counsel at IMPAQT. "The primary way is to see your copy in the search results. Copy-paste an extended piece of text from your web site and see what other web sites show up for that same text. Typically two sites shouldn't legitimately show up for the exact same web copy. I would say I have seen higher rates of recidivism, if you can show publication through the search engine."

If part of a site's content has been stolen, one course of action is to send a cease-and-desist letter to the alleged online thief or an intermediary.

"A lot of ways these things are resolved is by going after an intermediary, so you don't have to go to court directly with the infringer if there's somebody else that's pulling the strings," said Eric Goldman, Assistant Professor of Law at Marquette University School of Law. "Send a notice to an intermediary, like a web host, and get them to take down content that is alleged to be infringing. You do have to do a little homework, but it is still pretty easy to do, and most of the times it can be resolved."

Additionally, Goldman has found that sending a notice on a legal firm's letterhead and citing the DMCA (Digital Millennium Copyright Act) is also a good way of getting people to remove infringed content.

"If I have a $500 million/year company, and a cease-and-desist letter is sent, 70 percent of the time its effective," said David Rammelt, Partner at Kelley, Drye, and Warren, LLP. "If the company is too large of an entity, about half the time."

"However, you also have to look out for recidivism, where that same person may go out and do it over and over again," Goldman further explained. "So you may find yourself having to go after that person."

Panelists also recommended formally registering the site for copyright protection.

"You always register, especially when you make substantial changes," said Mark W. Ishman of Stark Law Group, LLC. "Obviously with a site that make changes daily, you may want to get yourself on some kind of schedule, with updates and all. I do a three-month cycle, since the spiders take about three months to entirely update their index. That seems to be a safe approach, since the search engines will be able to entirely update their databases by then."

"In terms of filing registration, it is difficult to manage registrations on a timely basis," Goldman continued. "Someone has to be in charge of it. You have to be serious and set up a program and set up someone in charge of it."

Trademarks and search engine advertising

The main issue with paid search—in the sponsored links—is legally allowing bids on competitor's trademarks. Can competitors legally use your actual trademarks in the ad copy itself?

"You don't have to have a registered trademark to receive protection of that mark. If fact, only a small percentage of the trademarks that come to us are actually registered," Rammelt explained. "Typically, as first use in commerce, you have priority rights to that mark, even in the face of a later registered mark. Trademark registration is much easier than copyright registration. You have to pay between $2K-$3K, but you only have to do it one time."

"Let's talk about Google and what they do. They are a long-standing brand that has all this value invested in it. Why do people use Google? Simply because it gets them to where they want to go," said Goldman.

"Say somebody does a search on Google using a trademarked term, they want to have a good search and find exactly what they wanted. You have to simultaneously believe that somebody is so brand-loyal that every time they enter a trademarked term, they only really want to see that trademarker's site. Any time they see a competitor's site, that brand loyalty just goes out the window. There's some kind of discomfort with this kind of rationale about not really knowing where they're coming from or what they're looking for," said Goldman.

"The reason is that lots of things happen from the time that content is displayed at the search engine level and somebody transacts; most transactions are episodic," Goldman further explained. "There is additional content that must be displayed after the click to help them make a decision to consume. I think that focusing on the search engine level about what the advertising does is too early in the process to make any assumptions on whether an advertiser is treading on that good will... and whether the advertiser is going to use that good will to pull somebody much further down the chain of conversion to the point that we see a transaction. I think we have this assumption that we can make a determination on what that searcher really wants from the keywords they enter into the search engine."

"My client spent 75 years and hundreds of millions of dollars building a brand name," said Rammelt. "And now after all that time and hard work, Google has decided that they are going to come in and profit and sell that to my competitors. They are profiting off of, and getting a free ride on, my client's name. And there is no reason that a competitor pays money off of my trademark except for one thing: if they're a fly-by-night company and not spend a dime on ethical advertising and don't care about good will."

Naeger stated that he falls in the middle on this debate. "I agree with Eric (Goldman) on the point that of brand loyalty—if someone was really that brand loyal then why wouldn't they just do their search in the address bar?" he said. "They could easily begin their search there. I think my problem is why won't the search engine produce a more reliable report? The search engine is making incremental revenue, sure, but the person who is doing the infringement is the advertiser. The infringement, in my mind, occurs within the ad, and then the web site they have you driven to. If there is an infringement, I believe it occurs there."

"On the other side of it," Naeger continued, "you have this whole concept of comparative advertising. And if I am a competitor to American Wall Paper and I want to produce and ad saying why I think my blinds are better than theirs, why shouldn't I be able to buy that trademark? It provides relevant information back to that search."

"One of the things Eric talked about is a concept in the law called initial interest confusion," said Rammelt. "Many courts have adopted it and said, in order to show a confusion, you don't want to have consumers confused when they're trying to find goods or services, their origin, designation. It is the whole reason that trademark laws are there."

If a client states competitor is bidding on his trademark in Google, Ishman first asks them if they have a registered trademark, and if so, what class is the trademark registered in. "I think its crystal clear in this situation when you're dealing with consumer confusion," he said. "What competitors are doing is counterfeiting the quality of searches. Take for instance American Blinds—people go there expecting to find the main site, but conversions are being made on the competitor site (as a result). American Blinds built up all this good will and quality control, and it is being subverted through searches."

"As for parody sites, those can exist under fair use," Ishman continued. "Other types of terms would apply to other sites, where you can piggy-back on your competitor as long as you're doing it to compare. As long as you are identifying that trademark as of your competitor to your goods and services—that's OK. But what's happening at American Blinds is completely, in my opinion, making trademark law more confusing than it is now."

Click fraud

Click fraud is the practice of clicking on PPC (pay-per-click) advertisements to increase advertiser costs. According to Jeffrey Rohrs, President of Optiem LLC, some of the reasons for click fraud include:

  • Make money, if you are an AdSense producer
  • Run up competitor's costs
  • Exhaust competitor's budgets, especially if your competitors are dayparting. You can exhaust your competitor's budget early in the day, and drive your own click costs down later in the day.

One of the problems with refunds offered from Google is the lack of information provided. "It doesn't give me a date and time stamp of when the click fraud occurred, nor does it tell me about the alleged infringing IP address," Rohrs explained. "So as the person who is in the campaign, I have to have things on my side of the equation that allow me to perceive click fraud."

The one who is liable for the click fraud is the person or company who runs the click bot, a piece of software used to automatically generate fraudulent clicks. "Once you've found the person, the legal end is the second step," said Naeger. "I think you can go after them in a fraud case, and for damages from taking away what would have been quality traffic to your own site."

"From the program perspective," he continued, "find out the people who are actually running the program. Send your cease-and-desist letter also to the engine, to show them that you've taken legal action. The person who is the AdSense partner has clearly violated their own contract with Google and a good cause of action."

"Does Google has some kind of duty to self-police trademark usage on the Internet? We've never advocated that," said Rammelt. "I don't think that Google has any kind of duty, other than a contractual duty, to police its click fraud. I'm not sure if, absent a contract, it would be fair to put them in a position to legally require them to police it. From a technological standpoint, they are the only ones that can do it, I think."

Naeger recommended doing some of the work for Google. "Produce some of that own information. Track your own log files and see where the clicks are coming from, and show it to Google yourself," he explained. "Look for where you might be getting an unusual increase in traffic from different parts of the country than two weeks ago. Are you advertising there or doing anything else? No? Then you can already show some kind of path that proves that click fraud is occurring."

"Their fraud departments are growing by the day," he said, "but the amount of click fraud is increasing so much that they're never going to have the ability to root out all instances of click fraud on their own."

Grant Crowell is the CEO and Creative Director at Grantastic Designs, Inc.. He has 15 combined years of experience in the fields of print and online design, newspaper journalism, public relations, and publications.


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