Following is a teaser guest post by my partner, Bob Cumbow (though this and the last paragraph are mine):
For some time now, “keyword search advertising” has been a marketplace reality in the US. In the typical keyword search advertising situation, a search engine sells to an advertiser the right to have the advertiser’s ad or sponsored link appear whenever a user of the search engine inputs a particular search term. It’s become a common practice for search engines to suggest, and advertisers to choose, search terms that are the trademarks of the advertisers’ competitors. Thus, when a user keys in the name of a particular company, the resulting search results may be accompanied by an ad or sponsored link to a direct competitor of the company whose name was keyed in.
For several years, competitors have been using one another’s names in this way, while simultaneously asking whether this activity actually raises a legal issue over which a lawsuit could be filed. Indeed, several such lawsuits have been filed, and courts have differed in their findings. For the most part, courts have been troubled by whether keyword search advertising constitutes a “use” of another party’s trademark; because if it doesn’t, then there is no basis for a trademark infringement lawsuit. Most courts have found that it does constitute a use of a trademark, but have gone on to find either no liability for trademark infringement, or liability only on the part of the advertiser, not the search engine.
Recently the Second Circuit Court of Appeals handed down its long-awaited opinion in Rescuecom v. Google, reversing a longstanding trend in that circuit, and holding that keyword search advertising is indeed a use of another party’s trademark for which a search engine might be liable. What is the significance of this holding? What problems does it raise? And where does keyword search advertising go from here?
Bob answers these questions in his insightful article here. It’s a great read.