Eric Goldman

Once again it appears that 1-800-Contacts’ fingerprints are all over this proposed legislation as the company tries to prevent competitors from using its trademark in keyword advertising. Though less disturbingly sweeping than previous iterations, which got a lot of attention, especially from Google, Eric Goldman at Technology and Marketing Law Blog is having trouble identifying how it differs from policies major search engines like Google and Yahoo already have in place.

“…it also makes me wonder–what’s the point? Doesn’t Utah have more important problems to solve???

“Even if the law is less troublesome than the last two, let’s be clear: this is not a good proposal. As with Utah’s past two efforts, this law has nothing to do with improving consumer welfare. Instead, it would allow companies to suppress competition by helping companies keep their competitors from gaining exposure among the company’s potential customers; meaning that companies won’t have to work as hard competing on price and quality.”

In addition, the legislation is vague enough that it might apply even to telephone directory assistance advertisers. Unlike previous versions, the law only applies to those doing business in Utah and to services with geographically targeted services. But as Goldman points out, what those services are and to whom they would apply are unclear.

With so many states passing Internet legislation to suit themselves, it brings up another issue: If the internet is an interstate commerce phenomenon, shouldn’t it be regulated only at the federal level? Recently we’ve seen New York impose taxes and back taxes, Kentucky seize international gambling domains, Washington aggressively prosecuting for actions legal in other states, California wanting to ban Internet hunting, and on and on it goes 50-fold, which makes Internet interstate business pretty burdensome.
 
 

Last April, plenty of people queued up to criticize Utah’s Trademark Protection Act. The state’s General Counsel, the EFF, and Danny Sullivan all took turns calling it a bad idea.

Nearly a year later, someone listened. And the Google Public Policy blog applauded:

Although the Utah law had not yet been enforced, it represented a big potential problem for consumers and advertisers alike. Consumers would have been prevented from seeing the kind of comparative ads that help them get the best deal possible. And businesses (including small businesses) would have been prevented from advertising products that they sell.

The law also would have hurt free speech, with citizens being unable to run ads in protest of a certain company’s business practices, for example.

Fortunately, the Utah legislature amended the bill this week and removed the provisions of the law which prohibited this type of keyword advertising.

At the time, the bill looked like a clever little reach for revenue by the Utah legislature. Trademark owners would have paid $250 to have their marks entered into a database, to be checked by search engines to avoid infringing upon them.

Not everyone found the change to their satisfaction. Utah-based 1-800-Contacts wanted the bill passed as it was, and complained bitterly about the amending that took place, according to ClickZ:

1-800 Contacts General Counsel Joe Zeidner doesn’t think the threat of lawsuits is the real reason for Eastman’s decision to appease the search giants. “(Utah Senator Dan Eastman) must have had some secret agreement with these big search companies,” said Zeidner. “We are still just dumbfounded.”

1-800-Contacts plans to continue “four or five” legal disputes over trademarks, with Zeidner threatening to make the Trademark Protection Act an issue again.

Please tell us a little about yourself – a mini bio if you will.

David: I’m Director of Emerging Media and Client Strategy with 360i, the search-focused digital agency. I’ve been writing a weekly Search Insider column for MediaPost since it launched in mid-2004. For fun, I have my own blog at MarketersStudio.com, and I do a fair amount of speaking at industry events. It’s a great gig, especially with the clients I get to work with.

Gord: Search marketer, research fan, marketing pundit, columnist and Chair of SEMPO. And those are just my day jobs.

Search Insider Summit is a fairly new conference. How did you get involved and what is your current role?

David: This is the fourth conference in the past two years. I’ve been the program chair since it began, so I’ve had a hands-on role shaping the content and working with all the speakers, along with doing some speaking myself.

Gord: As a Search Insider columnist, I guess I’m amongst the “Usual Suspects” when it comes to being involved with the Summit. I hosted in the Spring in Florida, and I guess I’m back for a repeat performance in Park City. David tells me I’m also on the Advisory Board.

What will you be talking about at the upcoming event in Park City Utah? What’s top of mind for you right now when it comes to search?

David: I’ll be talking a lot less than usual, only appearing on one panel with the other Search Insider columnists, so it’ll be fun shutting up and learning something from the masters. What’s top of mind for me is how search and social media interact. I’m really excited for the sessions on Saturday, especially one on universal search, and I’m not just BSing you because you’re the moderator. With universal search, Google and the other engines are showing how social media optimization (SMO) becomes search engine optimization (SMO).

Gord: I wrote a column awhile back titled “Will Agencies ever Get Search? Don’t Hold Your Breath.” Rumor has it that I’ll be dragging that debate into a public forum on the opening day. I suspect there will be no quicker way to polarize the audience. I’m sure I’ll be touching on other topics as well during the show. Personally, I’m fascinated by how we use search as an extension of our own decision modeling.

Since were at the end of the year, can you make some predictions about search marketing in 2008? Is anything more notable that personalized and unified search in store for the way engines work (algorithmically)? What changes regarding paid search and social search do you see in store?

David: Unified or universal search is just getting warmed up, as is just about anything with social media optimization. With paid search, I don’t anticipate so many changes to it because what all of these new social media ad opportunities and other new models reveal is how hard it is to find anything more effective than search engine marketing. Granted, people are only searching so much of the time online, and the new models for when people are consuming content are getting much more sophisticated. I’m really curious to see if mobile search gains traction.

Gord: Ah..search predictions. Gotta love them. Well, we’ll see continued experimentation and testing with both personalized and unified search (and hopefully, we’ll come to agreement on the label we attach to it..unified..universal..3D..it’s getting really confusing). And I’m thinking mobile will see some significant changes in the coming year as well. My crystal ball is a little fuzzy.

From my previous experience, this event is strategically focused in it’s programming and there’s an abundance of networking opportunities. Who do you think is the ideal delegate for an event like this?

David: Ultimately, I think the ideal delegate is someone who’s dying to learn, and who will at least be coaxed into contributing given the chance. This is an event for someone hungry to explore not just what works but why it works. It’s someone who’s up for taking a ton of notes that they’ll turn into action items for their CMO or their agency.

Gord: Not sure who the ideal candidate is, because there’s a lot of territory being covered. I’d think the people who are looking at how to further integrate search into their own company’s bucket of best practices would find it useful. Also, the agency folks who are looking at how to expand their internal search practices will probably find a good fit. If nothing else, they can gang up and push me off a chair lift or down a luge run.

Since the event will be held at the Stein Eriksen Lodge, which will it be for you? Skiing or snowmobiling?

David: I’ve never skied but I’ll be willing to try the bunny slope. With snowmobiling, I’m in Manhattan and don’t drive much, but I’ve been playing Mario Kart 64 on the Wii during an occasional sanity break, and I’m not sure you want to see me behind the wheel of anything right now. I’m hoping there’ll be smores.

Gord: I’m from Canada. Snow is not something I’m going to be going out of my way to frolic in. Finding a location strategically located by the nearest fireplace sounds good, preferably with some type of hot drink in my hand.

Thanks guys! See you next week!

You can find more info about the Search Insider Summit on the registration or session schedule pages.

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Utah, Wyo., Lead Search For Teen Bride Site

Revealed to be a hoax orchestrated to bring attention to inconsistent state marriage laws (and attention is what they got alright!), supposed publicity director for the website John Ordover stirred up some hornets nests via radio talk shows. Snopes had them figured out as early as August, though.

Before it was more publicly unmasked as a hoax by the New York Times two weeks ago, the site had received 20 million page views – who knows how many now?

But Yahoo’s Buzz Index reveals most of the search traffic, as of Sunday, is coming from a very specific region of the country: Utah and Wyoming, especially, followed by Idaho and Montana.

"Whether that’s from outrage—or interest—we can’t say," writes Molly McCall, and we’re not going to venture a guess either.

But it is fascinating that the sparsely populated Western states showed much more interest – or outrage – than the Midwest, South, and Northeast.

(For the uninitiated, "doi" is a juvenile, circa third grade insult, usually spoken with an lengthy up-twang at the end – doiiiii – replaced in junior high with "doofus," and in high school with "dumb ass." Perhaps unrelated, a search for the word "doi" brings back the US Department of Interior at doi.gov.)

Intended to take effect today, the Trademark Protection Act, legislation that would make it illegal to bid on competitor keywords, may get a work-over. Representatives, after passing the law unanimously despite protests from everywhere, may or may not repeal the act, but admit they’ve still "got some work to do."

That realization, courtesy of Rep. David Clark, descended onto to the Utah legislation only after Google, eBay, Microsoft, AOL, Yahoo, 1-800-Contacts, and Overstock.com sent their heaviest hitters to give them a talking-to, according to the Salt Lake Tribune.

The quote of the week, though, as noted on several blogs, also comes from Clark:

"I wish we had had this interaction with industry 60 days ago."

Um, doi. Though Utah’s lawmakers seem to have a poor understanding of how, exactly, the Internet works, we assume they do understand telephones, and have, at least, some lackeys to some research for them.

Perhaps they should subscribe to the Salt Lake Tribune while they’re making improvements in the legislative process, who called the law a "pointless fight" (hat tip to Eric Goldman).

"It’s only now, after the legislation has been passed, that the politicians figured it was worth maybe understanding what their legislation would actually do," writes Mike Masnick, CEO of TechDirt.

"Great point!" echoes Goldman (referring to Clark’s remarks, not Masnick’s). "The world would be a better place if legislators did their homework first before blasting their legislative guns."

But the headline of the week award goes to Kevin Newcomb at Search Engine Watch:

Utah Legislators Doing Research — After They Passed the Law

It’s unclear how Utah plans to rework the legislation. One politician said the law would go into effect as planned (heh, because it takes time to unscrew yourself in legislative matters), but the registry that was to be created will be delayed pending further information.

Google Cozies Up To Four State Governments

Google announced it would work with these state governments and index details about state services that may not be easy to find. Their work will connect people to a variety of sources, like state employment in Utah, colonial history in Virginia, and real estate agent information in Arizona.

“California state government provides tremendous resources online for the public to learn about our great state,” California Governor Arnold Schwarzenegger said in a statement. “Our partnership with Google will empower Californians to know more about our government and provide better access to services and helpful information.”

Google’s Custom Search Engine will be the driver of the offerings each state plans to make for their citizens. The product is free to government agencies.

At their Public Sector website, Google said as many as four out of five Internet users reach government websites by hitting a search engine first, citing July 2006 figures from comScore.

Virginia and Utah in particular have made big connections through Google’s product. The Custom Search Engines on each site permit website users at Virginia.gov and Utah.gov to search for information and find it from federal, state, or local sources with a single query.

Utah’s participation may seem a little surprising to observers. In early April, Utah banned competitor keyword bidding, a decision that would be a hindrance to Google. It is thought the law will not pass a Constitutional test if challenged.

The state of Utah has been in the news a lot lately for its heavy-handed approach to Internet regulation. The most recent curfuffle was over a law banning the use of competitor keywords in search advertising.

Before that was the proposed anti-porn resolution to create two Internet channels – one for family and one for porn – by cordoning off HTTP for non-pornographic material. The issue came with the usual "who decides what’s obscene?" debate, which will keep it tied up for a while.

The current initiative is built on the argument that kids are tech-savvy enough to bypass parental controls on home computers by accessing wireless networks to "watch porn all day long."

That assessment was made by Ralph Yarro, whom DesertNews.com describes as "a parent volunteering his time to stem what he calls a crisis of inappropriate material over an unregulated Internet," and the head of the nonprofit group CP80 (Clean Port 80), which pushes legislative agendas to create a family-friendly Internet.

DesertNews.com doesn’t mention that this is the same Ralph Yarro who is the controversial CEO of Unix software company the SCO Group, which has waged legal wars against Microsoft and, most controversially, against Linux.

CP80 is not just seeking a remedy to the generational chasm between parental and youthful technical acumen and the blocking of open wi-fi. The group wants Utah service providers to be "community conscious" by not allowing subscribers to publish obscene material, and taking down such material if it appears.

Supporters of the proposal say the state should offer tax incentives to service providers participating in the program, and even give them the equivalent of gold stars for their efforts they can post online.

One local service provider, XMission, is baffled by the logic. The ISP argues that providing pornography to minors is already illegal, making further legislation unnecessary.

Another voice calls for a statewide education program warning citizens of "uncontrolled porn in our society."

TechDirt.com’s "Carlo" thinks that may have the opposite effect:

"We’d imagine that advertising the availability of porn on the internet would run counter to these people’s goals, but apparently not."

The Electronic Frontier Foundation has already taken Utah to task on "dangerous" laws. Given that the EFF isn’t afraid of the FBI or the European Union, and has a history of spanking its opponents, Utah may be in for some trouble.

The Trademark Protection Act made its way quietly through the Utah legislature, not receiving so much as a whimper of opposition as Governor Jon Huntsman Jr. in signed it into law mid-March. Since then, however, the bill has created a firestorm of controversy comprising issues of keywords, trademark, and separation of powers.

The general purpose of the Trademark Protection Act is this:

This bill establishes a new type of mark, called an electronic registration mark, that may not be used to trigger advertising for a competitor and creates a database for use in administering marks.

When you start messing with online advertising, however, you’re infringing on Google’s turf, and they don’t like it very much:

Google, other search leaders and trademark experts are taking notice of Utah’s latest grand experiment in trying to control the global Internet. An earlier law to ban advertising spyware was knocked down in the federal courts. Only the federal government can regulate interstate commerce.

Trademark law is not the underlying issue in this piece of legislation. In fact, the concerns stem from a much more fundamental issue concerning the separation of powers between state and federal government.

In particular, the power to regulate interstate commerce is directly endowed to the federal government within the framework of the Constitution and is, consequently, beyond the jurisdiction and purview of the states.

Trademark lawyer Martin Schwimmer examines the TPA within this context in his blog post:

Because of the potential impact on interstate commerce from the state’s regulation of electronic registration mark use on Internet search engines, this legislation has a high probability of being held to be unconstitutional.

In the context of this legislation, there has been no specific delegation by Congress of the authority to regulate the type of Internet advertising that this legislation targets, whether triggered by an electronic registration mark or any other method.

As if the mounting case against the Constitutionality of the bill weren’t bad enough for Utah, now the Electronic Frontier Foundation is involved. EFF attorney Corynne McSherry was unavailable for comment when contacted, but has issued a statement concerning Utah’s Trademark Protection Act:

Aside from its constitutional flaws, the law is just bad public policy. It undermines the fundamental purpose of trademarks: to improve consumer access to accurate information about goods and services. Trademarks are just shorthand terms that designate the origin of a product.

Comparative advertising uses those shorthand terms to provide more information about the trademarked product and competitive products. That’s why comparative trademark use is clearly protected under federal trademark law. If it weren’t, Pepsi wouldn’t be able to tell consumers that more people think Pepsi tastes better than Coke, and Apple wouldn’t be able to make fun of Microsoft on national television every night.

Attempts to gather the Utah legislature’s side of the story have thus been unsuccessful, the TPA’s chief sponsor, Dan R. Eastman, failed to respond to requests for comment at the time of publication.

This will be an interesting news item to follow as the story develops, given the implications for all the major search engines that make use of paid advertising models driven by keyword sales. 

Utah Law Bans Competitor Keyword Bids

Using a competitor keyword or phrase to trigger an advertisement online in Utah is against the law. The passage of the Trademark Protection Act in Utah would require search engines to check a database of registered trademarks to avoid displaying ads in this way.

The profitability angle for Utah can’t be ignored. An annual fee of no more than $250 would be charged for each registered electronic mark under the law. Utah would reap an enormous windfall from brand name advertisers who wish to circumvent Google’s lawful practice of not investigating keywords as trademarks used to trigger ads in the US.

If you are looking for people who think this law is a bad idea, you’ll be spoiled for choice at the selection. You can start with Utah’s own General Counsel; they appended a legislative review note to the proposed act in the weeks leading up to its passage.

In summary, the General Counsel found problems with the Act as written:

Because of the potential impact on interstate commerce from the state’s regulation of electronic registration mark use on Internet search engines, this legislation has a high probability of being held to be unconstitutional.

The Commerce Clause to the United States Constitution provides that Congress has the power to regulate interstate commerce. (U.S. Const. art. I, sec. 8). This provision also has a “dormant” aspect that “prohibits state . . . regulation that discriminates against or unduly burdens interstate commerce.”

Search engines would either have to check every ad request to see if a user in Utah was making it, then check the search terms against the database of electronic registration marks for possible trademark issues.

Utah’s General Counsel office also considered the possibility that search engines would have to check every user query against the Utah database to avoid the need to determine someone’s location. “Any benefit to the state from this legislation is likely substantially outweighed by the burden on every Internet search engine or similar system to re- engineer its systems and constantly check the search terms or the location of a user,” they noted.

That potential would trigger the dormant aspect of the Commerce Clause. The Electronic Frontier Foundation commented on issues with Utah’s passage of the bill:

Aside from its constitutional flaws, the law is just bad public policy. It undermines the fundamental purpose of trademarks: to improve consumer access to accurate information about goods and services. Trademarks are just shorthand terms that designate the origin of a product.

Banning such competitor trademark usage would undermine legally permitted comparative advertising, according to the EFF’s Corynne McSherry. “That’s why comparative trademark use is clearly protected under federal trademark law. If it weren’t, Pepsi wouldn’t be able to tell consumers that more people think Pepsi tastes better than Coke,” she wrote.

Danny Sullivan brought up a scenario suggesting one difficulty Utah’s trademark system would have with this law:

Can you imagine registering common words like “Orange” or “Egg” or, hmm, “Apple” for protection? Then someone wants to use these words in a non-competitive way. How can the system automatically know this?

It’s difficult to see Utah’s Trademark Protection Act as anything more than a blatant money grab. Let the Constitutional challenges begin.

Well, I’m not overloaded enough, so today I’m adding all 719 of my Twitter followers as friends which means my home page is fast and furious. Why do that? So I can listen in on 719 of the world’s early adopters. That might be interesting. I might learn something. Or, I might just get overloaded. We’ll see. It certainly isn’t easy to do. Twitter wants to make it hard to add friends. Probably so their servers don’t get overloaded.

That leads Chris Saad to ask when we’re going to get overloaded? Oh, Chris, we’re well past that point. It’s just that by listening to a larger network I see trends earlier.

Oh, Francine Hardaway links to a video of the presentation I did on Thursday in Phoenix — she also linked to almost everything I talked about, which makes it seem like an info-dense presentation. I started it by showing how I read feeds in Google Reader.

Speaking of last week, I finally met Phil Windley (formerly Utah’s CIO) and someone shot an awesome photo of both of us in front of the Utah snow. Damn, I wanted to go skiing so bad. It was a real honor to meet Phil. He’s as smart and nice as he comes across in his blog.

Shahar Boyayan wrote about the Utah “Slopecast” presentation I gave and said she liked meeting me. I liked meeting her. Back at you Shahar and keep it up, sounds like you’re doing an awesome job helping businesses learn their way around this new world.

Along these lines Louis Gray has 10 ways to improve Google Reader. Oh, I should make a list too!

My first suggestion? Make a “read” item disappear instantly out of my “all items” view. I really hate seeing items I already read there.

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