High noon on the Internet: the death of Utah's HB450.

• Author: Spendlove, Gretta
• Position: Legal Brief

The Internet is the Wild West of the legal system. It is a place that was discovered just 40 years ago, which is still being explored and mapped, and for which laws are uncertain, hotly contested or in flux. Today, one of the Internets most controversial issues, keyword advertising, has stirred up businesses throughout the world.

What is Keyword Advertising?

It is the most hotly contested legal issue involving the Internet. Web searchers, such as Google, direct users to various Websites, depend on the "keywords" that the users enter. It is a particularly controversial practice for Web searchers to offer companies their competitor's trademarks as tools for directing traffic to their own site. For instance, Google might allow Smiths Food and Drug Stores to use the keyword "Albertsons" to direct more grocery store traffic to Smith's, and Google might also charge Smith's for allowing it to use the Albertsons keyword. Courts around the country are split as to whether that use constitutes trademark infringement.

Enter the Utah Legislature. In 2004, Utah enacted the Spyware Control Law, which regulated "adware," a type of keyword advertising. That law was enjoined as unconstitutional in the summer of 2004. In 2007, the Utah Legislature tried again, passing a law that generally restricted keyword advertising. It prohibited keyword buyers and sellers from using registered marks as triggers for keyword advertising. The 2007 law would have regulated the use of keywords by search engines, such as Google, as well as by advertisers themselves. In 2008, the legislature repealed the 2007 law.

Once again, in 2009, a law regulating keyword advertising was introduced--HB450. HB450 provided that, in limited situations, advertisers could not trigger ads based on competitors' trademarks. HB450 was narrower than the 2007 law. It only applied to keyword buyers (advertisers) and not keyword sellers (search engines). It only applied if the advertiser used a search service with a geographic feature that could determine users were in Utah. It provided no monetary damages, but only attorney's fees and an injunction to take down the offending ads. It was broader, however, than existing federal trademark laws, in that it did not require a showing of "actual confusion or likelihood of confusion," as is required under the federal Lanham Act.

HB450 passed the Utah House of Representatives by one vote, and then died when the Senate failed to act on it before the legislature...