In
creating a new kind of electronic trade mark with specific online
protections, the state hopes to clamp down on one company buying
the right to display search engine adverts when a person searches
for a rival's products.
Court cases across the US have largely backed the right of
companies to purchase an association with a search for a rival's
products, though one state ruled that that term must not appear
within the actual advert.
Google and Yahoo! operate the most popular search advertising
programmes which display adverts related to the term typed into the
search engine itself. The ads are displayed separately to the
actual search results, which are unaffected by any company's
purchase of advertising space.
Under the Trademark Protection Act, trade mark owners can apply
for additional protection in Utah which will mean that their marks
cannot be used as a trigger by rivals. "This bill establishes a new
type of mark, called an electronic registration mark, that may not
be used to trigger advertising for a competitor and creates a
database for use in administering marks," says the Act.
The law "prohibits the use of a registered electronic
registration mark to trigger advertising for a business, goods, or
services of the same class as those represented by the electronic
registration mark," according to the Act.
Both the advertiser and the seller of the advert can be liable
under the law.
Corynne McSherry, an attorney for the Electronic Frontier
Foundation, said in a statement that the law is impractical. "To
comply with the law, a search engine that received a search request
would have to determine whether a user was located within Utah and,
if so, check the search terms against Utah's registry of trademarks
to prevent the unlawful triggering of advertising. The cost to
search engines would be staggeringly high," she said.
Last October a New York district court threw out a case brought
by a brand owner against Google over its AdWords system's selling
of its name as a search term. Computer firm Rescuecom alleged trade
mark infringement.
Judge Norman Mordue said that the sale of trade marks as search
terms was not a violation, but that it would be an infringement to
include that trade mark in the text ad itself, since that caused a
'likelihood of confusion'. A previous case involving car insurance
firm GEICO had come to a similar conclusion.
French courts, on the other hand, have twice ruled against
Google in similar cases, agreeing with brand owners that the firm
should not sell trade marks as search terms.
In the UK a case involving Reed Business Information and Reed
Executive ended in a similar result to the US cases, where an
advert was found not to be an infringement, largely because it did
not mention the competing firm in the ad itself.
The EFF's McSherry said that the new law was not only
impractical but also most likely unconstitional because of the
strain it puts on inter-state commerce. "Aside from its
constitutional flaws, the law is just bad public policy. It
undermines the fundamental purpose of trademarks: to improve
consumer access to accurate information about goods and services,"
she said. "The good news is that, given the constitutional
problems, the law is likely to be challenged in court."
Google has one trade mark
policy for the US and Canada and another for the rest of
the world. For the US and Canada, Google will act on complaints
from trade mark holders about the use of their marks within ad
text. However, it will not investigate complaints about the use of
trade marks as keywords. Outside North America, perhaps influenced
by the French court rulings, Google will investigate complaints
about the use of a trade mark either as ad text or as a keyword. In
contrast, Yahoo! changed its
rules on 1st March to forbid the use of a trade mark as a
keyword.
