The sale of targeted advertising is one of the few business models that actually works on the Internet. Google has been an industry leader in creating ways to display relevant, unobtrusive advertising along with search results. Now, Google is at the center of a crop of lawsuits trying to block targeted ads based on trademarked keywords.
In targeted advertising, ads are chosen for display based on keywords the user has typed in to search. For example, a user who searches for "car insurance" on Google might see ads for Geico, Progressive Insurance, and Planet Insurance. But not all search terms are created equal. If a user enters "Geico" in the search box, she might be looking for the specific company, or she might want to shop around. Should Planet Insurance be allowed to advertise on the search results page even though Geico is a trademarked company name? Google says yes.
The lawyers at Geico believe this is a form of trademark infringement, and they're suing Google to get the ads removed. Another case has been filed by American Blind and Wallpaper Factory, a company whose name, unlike Geico's, is made up of common English words. A similar suit filed by Playboy against Netscape over the sale of ads for the keywords "playboy" and "playmate" was settled earlier this year.
American law is quite fuzzy on this type of trademark use. To win a trademark infringement suit, the trademark owner has to prove that the use of the trademark causes confusion for consumers. This usually means that people buy one product because they think it is the other product. Geico could very easily win a case against an insurance company calling itself Geiko, using a similar logo, and showing a picture of a lizard in its advertising.
In the search engine cases, however, there is little confusion. Paid ads on Google are displayed in a separate section from the actual search results, and the name and URL of each advertised site is shown. If Internet users mistakenly think an ad is from the searched-for company despite all this, it is obvious once the user clicks through that the site is selling a different product. A determined customer would return to the search results page and try again. Nonetheless, Geico and the other companies claim that if a customer clicks on an ad thinking it is sponsored by the company he searched for, this "initial interest confusion" is enough to constitute a trademark violation. If a consumer is enticed into buying from a different company than he originally intended, they argue, damage has been done.
In the offline world, different products and brands are displayed together all the time. A grocer might place Post Raisin Bran on the shelf next to Kellogg's Raisin Bran. Radio Shack puts several brands of cell phones and their calling plans in the same display case. Targeted ads have an even closer equivalent in grocery store coupons. When a customer buys Dannon yogurt, a coupon might print for Yoplait yogurt—or for more Dannon yogurt, depending on which company bought the ad.
A determined company can even design its website to attract a higher priority in the regular search without buying ad space. Companies can mention their competitors' names in their ads as long as they do not make false claims. A candy company could create a website with the title "Hershey's Kisses Have More Fat Than Joe's Chocolate Candies" and reap the benefits of being listed near the top in a search for "Hershey's Kisses". In fact, a whole specialization in search engine optimization has sprung up in the field of online marketing.
Geico might wish to be the only company in sight when a user searches for its name. But in the reality of the Internet, users are looking for all kinds of different things when they search—and they find them. A Google search for Geico currently returns the company's website first in the regular, non-paid search results, but that is followed by reviews, insurance price comparison services, government-provided information reports, and several stories about the lawsuit that is the topic of this article—all of which could potentially steer a customer away from Geico.
The benefit of the Internet is that it makes more information easily accessible than has ever been available before. Trademark protection is important, since consumers should be able to recognize brands without confusion. But just as copyright should not be used to restrict consumer freedom, trademark should not be used to restrict consumer choice. Search engines should help users find what they're looking for, but they should also help users find what is useful and unexpected.