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Trademark Debate Rages Over Use of Firms’ Names as Keywords

Home electronics cataloger Crutchfield is trying to get Internet portal Excite to stop selling the Crutchfield name to its competitors.

Crutchfield, Charlottesville, VA, said it learned nearly a month ago while negotiating to run a banner ad campaign on www.excite.com that Excite had sold the keyword “Crutchfield” to another home electronics merchant.

Buying keywords is a method Internet marketers use to deliver targeted banner advertising on search engines. For instance, Crutchfield may buy the words “stereo” and “speakers”‘ from Yahoo to ensure that a Crutchfield banner appears on Yahoo’s results page when someone searches for stereo speakers.

Where the issue gets troubling is that most search-engine policies allow advertisers to buy competitors’ brand names as keywords.

Crutchfield argues that its name is a federally registered trademark. In a letter to Excite, Crutchfield said, “This trademark is being sold to third parties without our consent and is being used to intentionally cause consumer confusion with respect to the identity of the party providing certain goods and services.”

Excite responded to Crutchfield and reiterated in a statement to DM News that it doesn’t sell keywords. It sells advertising packages that are linked to keywords.

“Crutchfield had and still has an opportunity to purchase advertising inventory targeted at users of Excite’s search who submit inquiries related to consumer electronics goods,” said Excite spokeswoman Heather Gore, who read from a prepared statement.

In other words, Crutchfield had the opportunity to buy its own keyword and turned it down.

“We didn’t feel like we should have to buy our registered trademark,” said Robin Lebo, director of customer acquisition for Crutchfield, adding that the company wanted to avoid setting the wrong precedent.

Lebo contends that the practice of selling brand names to competitors in keyword buys is unethical and that Excite is “using semantics to get around the real issue.”

“I was given a list of keywords to purchase,” she said. “I was not given a list of banner advertising opportunities targeted to keywords.”

Caught between the two companies is Crutchfield’s online ad agency, Paradigm Interactive, the Internet arm of Paradigm Direct. While Paradigm wants to serve Crutchfield’s best interests, it also needs a friendly media-buying relationship with Excite.

“We’re stuck between a rock and a hard place,” said Larry Weissman, president of Paradigm Direct, Atlanta, adding that Excite isn’t the only Web site selling brand-name keywords to competitors. Weissman is contacting trade groups, including the DMA’s new online subsidiary the Association for Interactive Media, the Internet Advertising Bureau and the newly formed Internet Direct Marketing Bureau and asking them to put the issue on their agendas.

“We need some industry guidance here,” he said. “Whether it be voluntary or legal, we need some type of a standard to follow so we know how to proceed in these types of buys.”

Indeed, brand-name keyword-buy policies vary among the big sites. AltaVista (www.altavista.com), for instance, will sell any keyword, including competitors’ names, on a first-come first-served basis.

“We don’t ask [keyword buyers] if they own the trademark because we’re not in the trademark business,” said Perry Allison, director of advertising and sponsorship sales at AltaVista, San Mateo, CA, a division of the Compaq Computer Corp.

AltaVista will, however, bump the original keyword buyer if a trademark’s owner wants to buy the name, Allison said, adding that the cost is almost always negligible.

“Unless it is a monstrously popular word, like Microsoft, this is not going to be an expensive thing,” he said.

Yahoo, Santa Clara, CA, sells brand-name keywords, but not to trademark owners’ competitors. For example, it will sell the word “Nike” to Wal-Mart but not to Reebok.

“The real battle here is Crutchfield’s right to protect its trademark versus Excite’s right to control its editorial content,” said Andy Sernovitz, president of AIM, Washington. No company has the right to be listed anywhere in a search engine anymore than it has a right to free newspaper coverage, he said, adding, “Just like any other form of advertising, you’ve got to buy your coverage.”

Also, including competitor’s name in a keyword buy is similar to prospecting using a competitor’s subscriber list, Sernovitz said. “We’re dealing with a sloppy collision of traditional marketing practices and new media marketing practices.”

Lebo said Crutchfield isn’t planning to try to legally block Excite from selling the “Crutchfield” keyword to other companies.

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