Adwords and Trademarks

Whatever you need; whatever you want, more likely than not, you’ll use a search engine to look for it online.  For providers of goods and services, building an online profile and keeping it high in search results is job No. 1.

Not infrequently, a company will purchase a competitor’s trademark as a “keyword” from a search engine.  A search for that trademark will then return results that include sponsored ads, and not just the URL of the trademark owner’s website.

Sometimes, a “firm, but polite” brush-back letter is enough to deter a company from using a competitor’s trademark.  If the letter does not produce the desired effect, can the trademark owner sue for trademark infringement?  More importantly, will a lawsuit be successful?

Infringement in Trademarks Purchase as Keyword

The purpose of a trademark is to identify the source of a good or service, and to differentiate a product or service from competing (read, “similar”) products or services.  When a company purchases a competitor’s trademark for use as a keyword, it is directing traffic to its website, and that is not the same as holding itself out as the source of a good or service.  Accordingly, courts have generally not found infringement in these cases, even where a company used its competitor’s name and trademark as hidden links in its own website.  Why? Because the name or trademark is not “visible” to the online searcher, there is no “holding out”, and, therefore, no infringement.

Trademarks on Sponsored Ads

However, where the complaint of conduct includes the use of the competitor’s trademark in the sponsored ad and on the website of the alleged infringer, those circumstances may be sufficient to enable a plaintiff to survive a motion to dismiss a claim of infringement.

Apart from the potential legal consequences of purchasing a trademark as a keyword, there is a practical downside risk.  It is, at bottom, misleading, and companies that use this tactic risk alienating customers when they learn who’s who.