Court: Bidding on Competitor’s Name OK in AdWords, adCenter

Buying ads based on a competitor’s name doesn’t violate trademark law, a court has ruled, overturning a lawsuit over AdWords and adCenter ads displaying trademarked names.

A hearing between Network Automation, Inc. v. Advanced Systems Concepts, Inc, in the United States Courts for the Ninth Circuit (California), brought forth a ruling that finally clears up buying competitor names, business names, and trademarked names in pay-per-click campaigns.

The case itself was two companies vying for top rankings on automation and management software. Advanced Systems Concepts, Inc., has a registered trademarked on their service called ActiveBatch. The district court was faced with the issue of whether Network Automation’s usage of ActiveBatch in AdWords was legal. Everything from ad copy intentions, trademarked usage, and site placement was clarified in the hearing.


The hearing was largely focused on the intention of users and the ability to identify paid sponsorship listings versus organic search results. Since the company Network Automation bought ads on both Bing and Google on the keyword, ActiveBatch, but made no mention of the trademarked name on the destination URL page, ad copy, or titles, they ended up winning the case. This is a very solid takeaway for advertisers,

It is OK (currently) to buy trademarked names in AdWords, if:

  1. You don’t mention that product/service on your site.
  2. You don’t mention that trademarked name in your ad.
  3. Don’t try to harm the competitors reputation or product.
  4. Don’t have comparisons with trademark infringements.

Google AdWords is no stranger to trademark infringement law suits. In a Search Engine Watch forum post, AussieWebmaster does an excellent job putting the AdWords model into perspective:

It is tough, when you go to the grocery store for Coke but you really mean cola, get to the soda aisle and see all the selections and buy Pepsi.
You ask for a Kleenex but really only want a tissue…
Buy the terms – to not do so is leaving profits on the table and not fair to your company or client… when the rules change change with them.

The US & Canada advertisers have had more slack on competition-based keyword targeting. However, just recently, Google won similar cases for European Trademark Laws,
British Columbia, and France.

Anyone can listen to the recording of the case, or view the PDF.

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