Know trademark protocol for SEM

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April Wurster
April Wurster

In 2008, US paid search advertisement revenue is expected to reach $15.52 bil­lion, according to JP Morgan. This repre­sents a 31.9% increase over 2007. Despite this tremendous growth, uncertainty in recent court developments may discour­age search engine marketers (SEMs) from purchasing keywords that are trademarked by others for fear of being found liable for trademark infringement.

Currently, the United States District Courts are split as to whether or not key­word advertising constitutes trademark in­fringement. In fact, the courts are evenly split as to whether the SEM or the search engine should be sued. New York has held that the search engine's sale of a trademark as a keyword is not trademark infringe­ment, whereas California and New Jersey have held that it is.

Both Yahoo and Google have adopted trademark procedures. Google allows SEMs to bid on keywords which are US trademarks of other companies. However, inside the US and Canada, Google will not allow trademark terms to appear in ad text. Yahoo also allows SEMs to purchase key­words which are the trademarks of others, but only if certain requirements are met.

However, not all use of another's mark is infringement. If the SEM is using an­other's trademark in the context of com­parison advertising, there is ordinarily no infringement because the mark identifies the trademark owner, not the SEM, as the source of the product. Thus, SEMs may use the generic key term “computer” and then use the trademark Apple in compara­tive advertising to get higher placement in the search results. However, false or mis­leading statements may result in liability.

Reasonable use of another's trademark to describe aspects of the SEM's own goods or services will also not subject the SEM to liability. For example, the SEM is not lia­ble for falsely trying to convince the online searcher they are Apple when it describes its product as an “apple-red computer.”

In light of this uncertainty, the most prudent course is to refrain from using another's trademark as a keyword, but to use trademarks in permissible comparative advertising in order to get higher rankings in search results.


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