Google (B)AdWords: avoiding trademark infringement in search engine advertising.

• Author: Horlacher, H. Matthew
• Position: Legal Brief

As the world's largest marketplace, the internet presents businesses with enormous sales opportunities, as well as significant obstacles in assuring that their products appear in the storefront windows of that marketplace. Transportation to the internet marketplace is most frequently provided by search engines, such as Google, Bing and Yahoo!, and storefront windows take the form of their results pages.

The desire to appear on the first page of those search results, combined with the willingness to pay to increase the likelihood of that result, has spawned an entire industry of companies focused on search engine optimization (SEO) and related services. But no company has capitalized on this phenomenon as successfully as Google. Via its AdWords service alone, Google generated almost $28 billion in revenue in 2010.

Keyword Advertising

The AdWords program allows businesses to bid on and purchase "keywords" from Google. When a Google user enters those keywords in a search, that business' advertisements and links appear in the Google "Ads" bars, located prominently at the top and right side of the first page of the search results. For example, entering the term "LEGO" in the Google search engine produces an advertisement and link for the official LEGO.com site in the Google Ad bar at the top of page one of the results. Other search engines offer similar keyword advertising services.

As part of an overall marketing strategy businesses will occasionally purchase keywords associated with a competitor's products. Continuing the LEGO hypothetical, a less well known manufacturer of plastic interlocking bricks could purchase LEGO as a keyword so that consumers searching the internet for LEGO products would see its competing products in the paid search results. But LEGO is a registered trademark, and analogous uses of a competitor's trademark as a keyword have led to litigation, requiring courts to address whether such use constitutes trademark infringement.

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To prove trademark infringement, a trademark owner must show both that its trademark is (a) being used in commerce, and (b) is likely to cause consumer confusion. Many of the first keyword advertising lawsuits were dismissed on the grounds that a keyword hidden from public view is not a use in commerce. Recent cases have reversed that holding, however, and today most courts accept that keyword advertising constitutes a use in commerce, even if the consumer never sees the...