Rodney D. Ryder *

The sale of keywords by Internet search engines has led to lawsuits being filed by companies contending that their trademarks are infringed by such usage. Rodney D. Ryder weighs the pros and cons

	a word used in a text search;
	a word in a text document that is used in an index to best describe the contents of that document;
	a ‘reserved’ word in a programming or command language.

Have you ever used a search engine on the Internet and typed in a word looking for a specific topic or subject, or perhaps even searching for a product by entering its trademark? To your surprise, you are not only given a list of websites, but the edges of your screen are covered with advertising for everything under the sun having to do with the subject you were searching. Furthermore, your search results could reveal some advertisements and websites of competitors of the product you were originally searching for.

Search engines and directories sell word-specific banner advertising. Translation: the banner ad you see on the page containing your search result is directly linked to the search terms you entered. The company which owns or has been licensed the search engine you were using has probably sold that ‘keyword’.

Every time a user of the search engine enters a particular word or combination, the ads of manufacturers who have purchased the keyword are automatically displayed around the search result. In some instances the ads are embedded into websites; the owners of those websites have paid to have their sites listed first in any ranking of located websites. It is estimated that 20 to 30 per cent of Internet ad revenues are generated from keyword banner ads.

Search engine operators and their ilk make money by selling this type of advertising and advertisers are willing and ready to pay for desirable locations. Typically, search engines sell this kind of advertising either per click or per impression.

Per-click advertising works on the premise that advertisers pay each time someone clicks on the ad they have placed and is taken from the search engine site to the advertiser’s home site. This type of advertising is generally more expensive because web surfers who encounter banner ads rarely click on them. When advertisers pay per impression, they are paying the search engine for each web surfer who actually sees the banner ad. This is calculated on cost per thousand impressions.

A lawsuit was recently brought by Playboy Enterprises against Excite, Inc and its search engine licensee Netscape Communications regarding keyword advertising. Playboy, the trademark owner of the words ‘playboy’ and ‘playmate’, claimed that the search engines owned and operated by Excite and Netscape displayed banner ads from pornographic websites whenever the words playboy or playmate were entered as a search term by a user.

Playboy claimed that the use of its trademarks amounted to trademark infringement and that Netscape and Excite were diluting its trademarks. In the summer of 1999, Alicemarie H. Stotler, judge of the United States district court in Santa Ana, California, denied Playboy’s request for a preliminary injunction restricting Excite and Netscape.

Judge Stotler later dismissed the lawsuit and an appeals court affirmed her ruling. The ruling limits trademark rights online and recognises that a company’s trademarks may be used without authorisation by search engines and directories in advertising sales practices. The judge held that Excite and Netscape did not use the words playboy and playmate in an unlawful manner.

In her final ruling dismissing Playboy’s case, Judge Stotler found that Excite and Netscape did not use the words playboy and playmate in a manner that infringed Playboy’s trademarks. She also held that Netscape and Excite did not ‘use’ these words as trademarks (as defined under conventional definitions of trademark use). She ruled, more importantly, that consumers were not led to believe that Netscape or Excite was using these words as trademarks to identify any goods or services in the minds of consumers.

In a similar case, Estee Lauder commenced action in early 1999 against iBeauty, an online cosmetics company. But, a year into the lawsuit, the case was settled before a decision was rendered after iBeauty agreed to delete the words ‘Estee Lauder’, ‘Clinique’ and ‘Origins’ from its list of keyword search terms.

Like many websites, iBeauty embedded keywords and phrases into their web page to trigger banner ads. In iBeauty's case, if a person were searching on Excite@Home’s search engine for Clinique, iBeauty’s keyword placement would trigger a banner ad for iBeauty. The search would result in numerous websites relating to iBeauty.com.

Estee Laude lawsuit against iBeauty and Excite@Home contended that its trademarks were infringed when iBeauty’s ads were posted during searches where the word combination Estee Lauder was entered. Estee Lauder’s case was reportedly bolstered by the fact that the trademarks Estee Lauder and Clinique are distinctive words outside of the English language.

This was different from the Playboy case, where the words playboy and playmate were rightly seen as existing in the English language prior to the adoption and use as trademarks. Thus sprung the theory is that the more unique or distinctive the trademark, the higher the likelihood of success in action of this type.

Take, for example, the trademark Nike. Although it has meaning in Greek legend (Nike is the goddess of victory in Greek mythology), it has become synonymous with the US-based sporting goods company. Faced with the word Nike, most people with an average awareness of the world will associate it with the company rather then the myth.

Consider what would happen if one of Nike’s competitors embedded this word into a list of keywords. Every time the word is entered into a search engine, another manufacturer’s goods or website would appear. This would be an obvious misuse of a trademark which Nike, the company, has great amounts of money to establish and make famous.

	A company’s trademark may be used without authorisation by search engines and directories in advertising sales practices. Comparative advertising practices;
	Comparative advertising practices;
	Are visitors to websites sophisticated enough to realise they are being led by advertisements which are directly linked to the words they are searching for?
	Are they able to differentiate between ‘use’ as defined in relation to trademarks, and merely being misled by savvy advertisers? Even if the chance of confusion is small, does that make it acceptable?
	Are search engine owners responsible for the alleged infringement, or is the site-owner that has purchased the keyword culpable? Should portal operators be required to ‘purify’ the use of keywords and ensure that trademarks are not used in an unlawful manner?
	How distinctive must a trademark be to have success in a case of keyword use? Can only unique, coined words be proper subject matter for protection against use as ‘keywords’?

We welcome responses to the issues raised here. Please mail your comments to this address: rd.ryder@vsnl.net