Competitor Keyword Suits Not Doing Well

    June 28, 2007
    WebProNews Staff

Those bringing lawsuits claiming that bidding on competitor trademark keywords is a form of infringement aren’t doing well in court. Though a few cases have made it past one court or another, those and others are getting caught up in the Second Circuit.

This will be a summary, as free as possible from the legalese Eric Goldman tosses about on his detailed blog post about the subject. He is a lawyer after all.

In Inc. v. Inc., something about the plaintiff’s argument that a keyword ad is a trademark infringement didn’t smell right to the judge.

Sorry. Had to get it out. I odor know better. (I said it be free of legalese, not horrible puns.)

The judge in that case, along with others in the Second Circuit have been ruling against or overturning previous rulings that bidding on competitor keywords is an infringement.

In the Fragrance v. Fragrance suit, the judge disagreed that a keyword ad was "use in commerce," primarily because the support for that argument stood upon whether or not a company was passing off a competitor’s product as its own and whether a trademark gave a company the right to exist in isolation to avoid confusion.

Simpler, to paraphrase the judge: If you ask for a Coke and they bring you a menu of competing colas, that is offering a choice of drinks, not giving Pepsi and saying it’s Coke; If Burger King opens a store next to McDonald’s, it is competing for McDonald’s business, not pretending to be McDonald’s.

And so it goes with sponsored ads, says the judge.