Are Competitors Hijacking Your Trademarks in AdWords?

Craig Buckler

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?