Trademark FAQs - Keyword Advertising

We have compiled practical answers to some of the most common questions about Keyword Advertising.

1. What is Keyword Advertising?
2. How does Keyword Advertising relate to trademark infringement?
3. What constitutes use?
4. Does Keyword Advertising cause a likelihood of confusion?
5. So can I use my competitors trademark as a keyword?
6. Is it possible to preemptively block my trademark from being sold as a Keyword Advertising trigger?
7. What can I do to protect my trademarks?

Important Note: The analysis and resolution of trademark issues depends to a great extent on the facts and circumstances of the situation at hand. You should not rely on this information to make decisions critical to your business, as it may be incomplete or incorrect when applied to your particular circumstances. This general information does not constitute legal advice, and is not intended to replace the counsel of a trademark attorney.

1. What is Keyword Advertising?

The term Keyword Advertising refers to advertisements that appear alongside or above "organic" search results in response to terms ("keywords") in the user’s query. For example: a search for "cell phone" may yield paid-for ads for specific cell phone retailers appearing above or alongside the organic search results for this term.

The attraction of Keyword Advertising is the expectation that an ad relevant to a user's query is more likely to be clicked. Search engines such as Google and Bing allow advertisers to bid on keywords, which may include both generic terms (such as "cell phone" and trademarks (such as "AT&T").

Potential problems arise when a company buys its competitor's trademark as a keyword so that its ad displays with search results for the competitor's mark. One might wonder, for example, why there is an ad for the Kindle Fire in the results of a search for "ipad"?

Some search engines, including Google's AdWords program, will suggest additional keywords, including competitors' marks, based on its knowledge of related terms.

2. How does Keyword Advertising relate to trademark infringement?

There are four elements to trademark infringement: (1) the plaintiff owns a valid trademark, (2) the plaintiff has prior rights, (3) the defendant used the plaintiff's trademark in commerce in connection with the sale of goods or services, and (4) defendant's use causes a likelihood of confusion about product source, or affiliation with the plaintiff. Uncertainty to date has focused on whether keyword advertising constitutes "use".

3. What constitutes use?

Since 2009, all federal district courts have held that the purchase of another party's trademark as a keyword to trigger an advertisement constitutes "use in commerce."

However, this only addresses the threshold question of whether there is use. A plaintiff in a keyword case still must prove that the use of the trademarked term causes a likelihood of confusion.

4. Does Keyword Advertising cause a likelihood of confusion?

Few courts have reached the point of addressing likelihood of confusion in cases brought against search engines (e.g., Google, Yahoo). Courts addressing that question have found no likelihood of confusion from the mere offering for sale of trademarks as keyword advertising: content counts.

Here, there is a distinction between search engine liability, and liability of the advertiser which purchased the keyword and is responsible for the content of the ad. While courts have been reluctant to impose liability on search engines, that is not necessarily the case for advertisers. The likelihood of confusion inquiry is a very fact specific determination. However, where there is enough bad action — for instance putting the name of the competitor in the banner advertisement without identifying the true source of the advertisement — courts will be inclined to find a likelihood of confusion.

5. So can I use my competitor's trademark as a keyword?

Maybe, maybe not: the answer depends on how you use it. Courts have held that there might be a likelihood of confusion if the sponsor of the banner advertisement is not identified. However, where the banner advertisement clearly identifies its source, or the advertisement overtly compares its goods or services to the competitor, the risk of confusion is greatly reduced.

6. Is it possible to preemptively block my trademark from being sold as a Keyword Advertising trigger?

Not officially, though some companies seem to have found a way. It appears that some companies do have special deals with Google or Yahoo, but there is no way to prove it.

7. What can I do to protect my trademarks?

The best course of action is to (1) monitor keyword usage by competitors, (2) submit complaints to the major search engines, or (3) consider direct action with the advertiser as appropriate. You might also want to consider your own keyword advertising program for the most important search terms. While it may be galling to have to outbid a competitor for clicks when your site already tops the organic search results, the cost might be justified in some cases — and far less than the price tag for litigation. Finally, consider whether your distributors and resellers are purchasing your trademarks as keywords and provide guidelines in your distribution and reseller contracts as needed.

For more answers about Trademarks, return to our Trademark FAQs.