Estée Lauder Files Suit Against Excite

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Estée Lauder Co. has sued Excite Inc., Redwood City, CA, saying that the Web portal sold the cosmetics maker's name -- in the form of a keyword -- to an Estée Lauder rival.


In a dispute that first became public late last month, the New York-based makeup giant, which also sells products under the Origins and Clinique brand names, alleged trademark infringement by Excite and Fragrance Counter Inc. In a statement, Estée Lauder said the defendants engaged in bait and switch advertising and unfair competition. The suit was filed in U.S. District Court in New York on Jan. 19.


Buying keywords is a method Internet marketers use to deliver targeted banner advertising on search engines. Estée Lauder said that Fragrance Counter, Brentwood, NY, bought the words "Estée Lauder" and "Origins" from Excite so that a Fragrance Counter banner ad appears whenever someone carries out a search through www.excite.com using the words. A click on the Fragrance Counter banner sends the Web surfer to Fragrance Counter's online store, though the company is not an authorized retailer or distributor of Estée Lauder products.


Excite spokeswoman Melissa Walia declined to comment about the suit. However, in response to a November inquiry from <I>DM News<I> concerning a similar controversy between Excite and electronics cataloger Crutchfield, Excite said that it sells advertising packages, not keywords. Crutchfield, Charlottesville, VA, said shortly afterward that it hoped to resolve its conflict with Excite through industry organizations.


"It's the wild, wild Web, and the rules really haven't been established yet," said Suzanne Kawadler, a spokeswoman for Namestake.com, a Boston company that provides domain name and trademark research services. "It's really important for companies to be vigilant about their intellectual property on the Internet, much more so than in the analog world where there are systems in place to protect them." Estée Lauder recently became a client of Namestake.com.


A search on BannerStake -- a service at www.namestake.com that reveals the banners attached to keywords -- showed that Search.com, Netfind, Snap, Netscape, Looksmart and Lycos all have pre-set banners that appear when people search for "Estée Lauder." However, none of those banners advertise competitors to the cosmetics company. Webcrawler, another engine operated by Excite, also attaches a Fragrance Counter ad when people search for Estée Lauder.


A number of Estée Lauder's subsidiaries also have filed suit in France and Germany complaining of Fragrance Counter's and Excite's conduct under the laws of those countries, according to the company's statement. An Estée Lauder spokeswoman declined to elaborate on the litigation.
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