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.