Search Engines and Trademark Issues

The use of trademarked phrases in search engine marketing is controversial, with owners of protected marks at risk of misuse from both competitors and affiliates.

A special report from the Search Engine Strategies 2003 Conference, August 18-21, San Jose, CA.

Companies that have relied on unique names to set their brand apart from others are now facing increased competition online to come up on the top of search results, which may lead to brand dilution or customers being diverted away from the official website. In some cases, companies are being undercut by their own distribution partners even more so than their competitors, and this scenario has many struggling for an effective method of managing online partnerships without diminishing their own market share.

Of course, search engines such as Google are used worldwide, and the laws surrounding trademark infringement are nearly impossible to manage from country to country. In the U.S., rights trademarks are based on first use or registering terms with the United States Patent and Trademark office to have legal rights to use ® after the word, and many other countries use first registration for determining proper use.

At the most recent Search Engine Strategies conference, a panel of experts discussed the implications of trademark infringement and suggesting solutions for dealing with affiliates. Search marketers and legal experts participating in the discussion agreed that the process for monitoring for infringement can be time consuming, and worse, the legal implications of misuse in search marketing are harder to resolve because the judicial system does not have a solid understanding of the continually changing marketplace.

Issues of Liability

Pharmaceuticals and financial institutions were pointed to as examples of industries at greatest risk, because of the federal regulations involved regarding advertising limitations for other media.

Bidding on a competitor’s brand name or trademarked product is at the top of the list when it comes to claims of fair trademark use. In terms of competition, the only legitimate use of trademarked terms comes with statements of absolute truth or fair comparative advertising, followed by a side by side comparison of products.

Infringement can come in several forms, said Deborah Wilcox, a partner at Baker & Hostetler LLP, including use of another party’s trademark that is likely to “cause consumer confusion, or to cause a mistake, or to deceive as to source, affiliation, sponsorship, origin or approval.”

In pay per click advertising, many of the search engines have their own policies regarding use of another company’s trademark. For example, Google allows you to file an official complaint to prevent unauthorized (non-affiliates or partners) from showing ads on your trademarked keywords or within the text of their ads. In addition, affiliates who are allowed to bid on trademarked terms must designate themselves as such in ad copy.

Even still, the advent of broad and phrase matching keywords is helping Google and Overture facilitate the dissemination of trademarks and further blurring the line of infringement upon trademarked keywords, argued one of the panelists during the Q&A session. Brand owners need to put more pressure on the search engines with trademark disputes, but the shopping engines will only stop marketing trademarked terms if asked.

The auction style of bidding that ensues in paid search engines led several trademark holders to File complaints, because unauthorized websites have been able to place bids on keyword terms which may also be considered generic phrases by the search engines. This particular practice was at issue in the infamous Mark Nutritionals vs. Overture case of Body Solutions, where the official website of the manufacturer was listed below competitors who were allowed to bid on their trademarked terms.

Jeffrey Rohrs of Optiem said that “courts are inherently unoriginal” in deciding actual court cases surrounding online trademark abuse because there are no precedents that are comparable, and often make a poor attempt to create an analogy from other media, and judges tend to avoid creating unique resolutions in such cases.

Seeking an SEM Solution

Larger retailers and branded companies who are using the web as direct sales channel and have implemented affiliate campaigns are among those facing increased competition in paid search for the top slots sold to brand names or trademarked keywords. Meanwhile, marketing partners may be achieving high organic listings at the same time, often putting the official dealer in a position of having to pay more for advertising and still have to make maximum profits.

Catherine Seda, of Seda Communications, contended that poorly managed affiliates can lead to higher per click fees and profit losses, as the combination of competitors and those authorized affiliates force the original seller to bid higher than necessary on unique terms just to be competitive.

Lisa Riolo of Commission Junction says that the advantage of running affiliate programs is to use independent publishers as independent marketers, which can be less costly than having one in-house expert or vendor to manage paid placements, and profitable because performance driven marketing creates effective results by nature. However, she also recommends building complimentary efforts rather than competing, and said that you can protect your own interests by establishing solid guidelines for partners to follow. This strategy may include restrictions and policies surrounding paid advertising, natural SEO and paid inclusion, and further empower your affiliates by providing them with approved copy suggestions and keyword phrases.

Seda agreed with the practice of creating a manageable affiliate strategy, and if you already have one in place, it should be reviewed for effectiveness from a search point of view. After studying its impact on your own branding and direct sales from search referrals, you may consider making changes or dropping the program altogether if the negatives are outweighing the potential increase in profits, and make sure that your affiliates are not cannibalizing your efforts.

If you’re going to run an affiliate program while managing your own SEM campaign, Seda also suggest putting some restrictions on your partners, but to also make some concessions at the same time. You may want to prohibit partners from marketing specific trademarked terms, but allow them to promote the generic phrases.

Restrictions on keywords in domains, meta tags and PPC keywords, specific search engines or placing regional boundaries all may be effective tactics for reducing competition with your own partners. Total search volume and the amount of your total affiliate payouts should also be factors to consider while making these decisions.

Managing and Monitoring Misuse

Keeping tabs on who might be improperly using your company name, registered brand or trademark, or reprinting your copyrighted content without prior approval can be a time consuming task, but one that should be made part of your normal routine. At the very least, check your competitive landscape every month may turn up new competitors advertising in your ‘space’.

The quicker indexing of natural results makes it easier to spot check for those abusing your trademarks or publishing your original content without attribution, by simply searching for a unique combination of your key terms. One swift follow up with a cease and desist order from your attorneys should quickly take care of any trademark infringement or copyright issues that arise.

Elisabeth Osmeloski is a Search Engine Marketing Consultant at Beyond Ink and the Skiing Editor.

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