Adding more confusion to the case law surrounding trademark issues and search advertising, a Sixth Circuit federal court in Kentucky found that keyword advertising is a "trademark use in commerce" under the Lanham Act. Actually, what they decided was that there was not enough case law to prove it wasn't, so a motion to dismiss the case based on that argument could not be granted.
While the decision was not an overwhelming one, and should not affect future cases, it showcases the confusion in the courts surrounding keyword advertising, and overall search engine marketing issues. In most Circuit Courts – other than the Second Circuit courts in New York, Vermont and Connecticut – the findings have been that keyword advertising is a trademark use in commerce, as Eric Goldman, an Internet law professor at Santa Clara University School of Law, outlines on his Technology & Marketing Law Blog.
"This case reinforces the pattern that Second Circuit-controlled courts aren't finding trademark use in commerce from keyword triggering and all other courts are," he writes.
If buying an ad triggered by a trademarked keyword is eventually found to be a trademark use in commerce, that would essentially prevent advertisers from doing so legally. Goldman has written quite extensively about online trademark law, and he agrees with the Second Circuit courts.
The Lanham Act defines "use in commerce" as using a trademark on physical packaging or displays, or "in the sale and advertising of services," an ambiguous definition when it comes to the Internet and search engine marketing, says Goldman. He expects the matter to remain unresolved until Congress passes a new law or the Supreme Court makes a ruling.
Google's current trademark policy allows advertisers in the U.S. and Canada to trigger an ad from another party's trademarked keyword, but not to use the trademarked term in the ad text. In all other countries, advertisers are not allowed to do either.
Yahoo's trademark policy "requires advertisers to agree that their search terms, their listing titles and descriptions, and the content of their Web sites do not violate the trademark rights of others."
Microsoft's trademark policy is similar to Yahoo's (and Google's non-North American policy). It "requires all advertisers to agree that they will not bid on keywords, or use in the text of their advertisements, any word whose use would infringe the trademark of any third party or would otherwise be unlawful or in violation of the rights of any third party."