Using another’s trademark as a keyword for online search marketing purposes is a murky area of law. Is this trademark infringement? Is this a permissible action? Although one may assume that these questions are two sides of the same coin, in reality they are not. The case law on this issue – especially those cases extending from WhenU to the more recent Rescuecom – provides some guidance as to when trademark-as-a-keyword can be problematic; but the real issue is with the trademark-use guidelines promulgated by the search engines themselves. Generally speaking, search engines permit advertisers to purchase another’s trademark as a triggering keyword, but some do not allow the advertiser to use the trademark in the ad copy. In other words, the advertiser can show the ad to the consumer, but can’t explain why the consumer is seeing the ad in the first place.

Thus, even though use of another mark’s may not rise to the level of trademark infringement, it may not be permissible under the search engine’s terms of use. To combat this, advertisers sometimes speak in “soft language” – code that tries to get around use of the mark. For example, imagine that a store like WalMart or Best Buy wants to advertise a new Sony laptop. The store’s search engine marketing (SEM) purchases may use “Sony” as a keyword, but may say “sale on laptops from large Japanese-based company that is a mainstay in the consumer electronics space” in the ad copy, to ensure that it does not run afoul of Google’s trademark policy. To me, this need to speak in “soft language” does not decrease consumer confusion – it increases it.

In response to this problem, Google has taken steps to liberalize its U.S. trademark policy. Specifically, it has created a special class of advertisers that can use another’s marks in ad copy. This new class – which is made up primarily of resellers, review sites, and sellers of compatible, complementary, or replacement products – will be permitted, under certain circumstances, to use another’s trademark in the ad copy. The text of Google’s official announcement can be found here.

Why This Matters:  While this change is important in that it brings the practice of SEM more in line with trademark and advertising law, the change does not cover all uses of another’s mark. Going forward, competitors making comparative claims in the online ad copy may still be rejected by Google. Although this class of advertiser should be permitted to use another’s trademark in online ad copy, competitive ads – based upon the theory of nominative fair use – may still need to resort to “soft language.”