Are Competitors Hijacking Your Trademarks in AdWords?

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keyword highjackingGoogle AdWords, Yahoo Search Marketing, and Microsoft adCenter have been profitable for companies using the services and those running them. Although everyone would prefer their site to appear prominently in natural search engine results, SEO is not an exact science. It can be cheaper, easier and quicker to pay for adverts in the sponsored listings.

Most AdWords-like systems operate on the same principle:

  1. You choose a set of keywords and phrases.
  2. You create one or more adverts, normally in plain text.
  3. You opt to pay a certain amount when a user clicks your advert and proceeds to your website.

The more you pay, the higher you will normally appear in the sponsored listings.

Other than a minimum charge, there is no restriction on the keywords you can choose. If you run a company called Foozle Software, any of your competitors can have their adverts appear when the keyword “Foozle” is entered.

This situation has been brought to light by luxury fashion designer Louis Vuitton. The company claimed Google’s practice of selling trade names was illegal under European law and also allowed counterfeit traders to sell fake goods. In 2006, a Paris court ordered Google to pay $250,000 for trademark counterfeiting, unfair competition and misleading advertising. Google has appealed to The European Court of Justice and could win following an adviser’s recent statement:

Google has not committed a trademark infringement by allowing advertisers to select keywords corresponding to trademarks.

Is trademark hijacking a major problem? A similar issue was raised by the use of competitor names in meta tags. The fact remains that, defamation laws aside, there is nothing to stop anyone creating a website that mentions your brand name. Search engines should remain impartial; they must be permitted to link to that content if it is relevant to the search phrase. However, perhaps AdWords is not impartial because it favors the biggest spenders?

Unfortunately, search engine competition is becoming so important, we could see many big businesses resort to litigation. I suspect many lawyers are secretly hoping Louis Vuitton wins their case.

Has a competitor used your trade or product name? Was it a problem and how did you handle the situation?

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  • shmlco

    In days of yore, I could pay to have a full page ad in a magazine sited right next to an article about a competitor. If I’m Panasonic, I can pay Best Buy for premium placement right next to Sony. If I’m Pepsi, I can use Coke’s name in an ad or product comparison.

    All are fair use, and all are NOT trademark infringement. A trademark does not cover EVERY use of a name. It exists to prevent confusion, and to prevent competitors from slapping a Nike label over a cheap Chinese knockoff.

    Google is doing NOTHING wrong. And if someone is knocking off your product with fakes… sue them, not Google.

  • pug2112

    Totally agree Shmlco –

    Take the example of a sports retailer selling certain brands and advertising such brands. Nothing wrong with that.

    However, these firms know they have 0% chance of taking a small Chinese operation to court, so their only option being google.

    Google can do something to help. Adwords should mention the location of the buyer.

  • Anonymous

    The case of Google allowing competitors to purchase trademarked names in adwords is a complicated matter. It extends far beyond letting a legitimate retailer advertise the brand names it sells. In our situation, we own a trademark on the brand name of a particular piece of equipment. It happens to be more popular than that of our competitor’s. Google has allowed our competitors to purchase our trademark as a keyword, essentially treating our worldwide registered trademark as a generic term—which is a trademark violation.
    After we sent proof of our trademark ownership, Google maintained they were blameless in the infringement. While we have been successful in notifying our competitors of this trademark abuse, resulting in them removing the keywords, Google continues to encourage such trademark infringement. This has resulted in us spending time and money to protect our trademark. Meanwhile, Google and IP attorneys are the only ones that will continue to get rich.
    Google would like the public to believe that they are interested in keeping the Internet objectively open to those searching for relevant information. They are really interested in making money—and a ton of it. To this end, they have blurred the line by mixing legitimate trademark use and infringement to convince everyone that a “little” trademark infringement is okay. It goes back to what Mom always said: “There is no such thing as being a little pregnant.”

  • Nader Yasin

    As a U.S. trademark and brand-protection lawyer, the issue of Google and contention seems to rage on. Take, for example, Jurin v. Google, Inc., 2:09-at-01695 (E.D. Cal. complaint filed Oct. 22, 2009), or the FPX v. Google, et al. lawsuit in Marshall, Texas. It seems that trademark analysis by plaintiff’s lawyers in the United States continues to pose problems for Google. http://www.linkedin.com/in/trademarklawyer

  • Jeffrey

    I am a trademark lawyer who deals with this issue for clients all the time. Fortunately the law may be slowly changing in favor of ending this pratice. An April, 2009 case opened the door for potential trademark infringement actions for companies who buy Google AdWords even if those words are never displayed by the competitor. Has anyone else out there tried pushing this envelope? Jeffrey5729@gmail.com

  • trademark warrior

    It exists to prevent confusion, and to prevent competitors from slapping a Nike label over a cheap Chinese knockoff.

    This is exactly what Google is allowing and profiting from.

    Google has allowed our competitors to purchase our trademark as a keyword…

    In what universe would this be considered ethical?

    In days of yore, I could pay to have a full page ad in a magazine sited right next to an article about a competitor.

    That’s not the same thing at all. To use your analogy, what Google is doing is accepting money to replace the competitor’s name in the article with yours.

    Basically, the harder you worked establishing your brand, the more Google can sell it for. And they shouldn’t be able to charge your vendors for using your trademark when they have your permission. The loopholes need to be closed so Google can’t profit from the work of others.

  • mamlaka

    thank you