A California federal appeals court recently ruled that bidding on competitor keywords and trademark terms is not a violation of trademark law. According to the court, since Google and Bing have partitioned their SERPs so that the advertisements appear in separately labeled sections for “sponsored links”, a consumer will not be misled by a company using a rival’s trademark term to trigger a search ad.
This recent ruling opens the door for marketers to have more opportunities in pay-per-click campaigns. It has become standard practice in recent years for brands to bid on competitor’s trademarks and include the terms in ad copy in pay-per-click ads.
So this leads to the question of whether your competitors are bidding on your name and trademark terms. The answer is most likely, yes. This highlights the importance of bidding on your brand and trademark terms. If you are not showing up for your brand terms, it is most likely that your competition is, and you could be losing out on valuable, qualified traffic to your site.
In order to have your pay-per-click ads stand out against your competition, you can use terms like “official site” and “authentic” so that visitors know that they are getting to the correct web site.
Alternatively, when bidding on competitor names and trademark terms, it is advantageous to include discounts and/or special promotions to steer visitors to your site instead of the competitor the user was originally searching for.
Let the bidding games begin.
The law states that in order to charge another with trademark infringement, the infringer has to have used the trademark in a way that has caused consumer confusion about the identity of the advertiser and has to have been used “in commerce”. When a trademark is used as a keyword to trigger an internet advertisement, the question that arises is whether this is a use “in commerce”.
Google will allow companies to bid on their competitors’ trademarked terms as long as the trademarked names do not appear in the text of the ads. Yahoo does not allow competitors’ to place ads on trademarked names.