May It Please the Mozzers,
Last week, there was minor uproar over a Florida District Court's Order involving negative keywords. Understandably, many SEO/Ms were anxious that the Court screwed something up that would prevent companies from bidding on their competitors' trademarks for keyword advertising.
Ars Technica ran the headline "'Negative Keyword' Ruling May Have Big Impact On search Ads." Search Engine Watch also expressed deep concern about the ruling, calling it "a dangerous precedent." The Horror!
I want to assure the search community that the court's order isn't radical, nor is it likely to have adverse effects on keyword advertising. Let's take a quick look.
In Orion Bancorp Inc. v. Orion Residential Finance (No. 07-cv-1753 (M.D. Fla., March 25, 2008)), Orion Bank sued a competitor, Orion Residential Finance. The similarity in their names and industry should give you a hint about what the suit is about. That's right, trademark infringement. Orion Bank accused Orion Residential Finance of infringing on its registered trademarks. The bank owns ORION, ORION BANK, and ORION BANCORP. Orion Residential Finance is simply too similar to Orion Bank and the industries overlap.
So Orion the bank brings this lawsuit requesting that Orion the residential finance company stop using its marks and pay it some money.
Well, the bank never even served the residential finance company. It just went straight to settlement discussions. The two parties negotiated for about six months and reached an agreement. The Order signed by the judged was actually an agreed order written by and willingly entered into between the parties.
As you would expect, the Order basically says that the residential finance group can't use the word "Orion" to identify its business anymore. In these types of orders, it's typical to prohibit the Defendant from using the challenged name in all manner of traditional media. The only thing different here is that the parties agreed to include a provision on keyword advertising. Among other things, the order states that the Defendant is prohibited
First, this court's order doesn't mean that competitors can't bid on each other's trademarks any more. It doesn't even come close. The only reason this order exists is because the competitors have confusingly similar names and only one has the trademark. In other words, the Court would never have issued such an order (and the parties would never have agreed it) if Orion brought this same lawsuit against Lobster Residential Finance. The Court did not single out keyword advertising as the problem. Instead, the parties agreed that Orion Residential Finance can no longer use the word in commerce because it is confusingly similar to Orion Bank. Period.
Second, there was some speculation that because the original Complaint included some John Does, that this Order could be applied to companies other than Orion Residential Finance. There is no need to worry about that happening. First, the John Doe defendants were dismissed from the lawsuit. Second, the Order specifically states that it applies to Orion Residential Financial, not the John Does.
Third, there was concern that this order would somehow affect Google's policies on keyword advertising and trademarks or that Google would get involved because of the increased burden. The good news here is that this order has no effect whatsoever on Google's current U.S. policy of allowing competitors to bid on each other's trademarks so long as the marks aren't used in ad copy. The Order is only enforceable between the parties. That means that the Orion Bank couldn't take Google to court for failing to follow this order. Its only option would be to take Orion Residential Finance to Court and ask for sanctions. Thus, I'm sure Google won't be bothered by this result.
Last week, there was minor uproar over a Florida District Court's Order involving negative keywords. Understandably, many SEO/Ms were anxious that the Court screwed something up that would prevent companies from bidding on their competitors' trademarks for keyword advertising.
Ars Technica ran the headline "'Negative Keyword' Ruling May Have Big Impact On search Ads." Search Engine Watch also expressed deep concern about the ruling, calling it "a dangerous precedent." The Horror!
I want to assure the search community that the court's order isn't radical, nor is it likely to have adverse effects on keyword advertising. Let's take a quick look.
What Was the Case About?
In Orion Bancorp Inc. v. Orion Residential Finance (No. 07-cv-1753 (M.D. Fla., March 25, 2008)), Orion Bank sued a competitor, Orion Residential Finance. The similarity in their names and industry should give you a hint about what the suit is about. That's right, trademark infringement. Orion Bank accused Orion Residential Finance of infringing on its registered trademarks. The bank owns ORION, ORION BANK, and ORION BANCORP. Orion Residential Finance is simply too similar to Orion Bank and the industries overlap.
So Orion the bank brings this lawsuit requesting that Orion the residential finance company stop using its marks and pay it some money.
Well, the bank never even served the residential finance company. It just went straight to settlement discussions. The two parties negotiated for about six months and reached an agreement. The Order signed by the judged was actually an agreed order written by and willingly entered into between the parties.
What Did the Order Say?
As you would expect, the Order basically says that the residential finance group can't use the word "Orion" to identify its business anymore. In these types of orders, it's typical to prohibit the Defendant from using the challenged name in all manner of traditional media. The only thing different here is that the parties agreed to include a provision on keyword advertising. Among other things, the order states that the Defendant is prohibited
from purchasing or using any form of advertising including keywords or 'adwords' in internet advertising containing any mark incorporating Plaintiff's Mark or any confusingly similar mark, and shall, when purchasing internet advertising using keywords, adwords or the like, require the activation of the term "Orion" as negative keywords or negative adwords in any internet advertising purchased or used....For purposes of this court order, a "negative keyword" or "negative adword" shall mean a special kind of advertiser keyword matching option that allows an advertiser to prevent its advertisements from appearing when the specific terms are a part of a given user's internet search or search string. It does not infer that the Defendant may use the specified negative keywords or adwords for any other purpose.
Why the Court's Ruling Won't Break the Internet
First, this court's order doesn't mean that competitors can't bid on each other's trademarks any more. It doesn't even come close. The only reason this order exists is because the competitors have confusingly similar names and only one has the trademark. In other words, the Court would never have issued such an order (and the parties would never have agreed it) if Orion brought this same lawsuit against Lobster Residential Finance. The Court did not single out keyword advertising as the problem. Instead, the parties agreed that Orion Residential Finance can no longer use the word in commerce because it is confusingly similar to Orion Bank. Period.
Second, there was some speculation that because the original Complaint included some John Does, that this Order could be applied to companies other than Orion Residential Finance. There is no need to worry about that happening. First, the John Doe defendants were dismissed from the lawsuit. Second, the Order specifically states that it applies to Orion Residential Financial, not the John Does.
Third, there was concern that this order would somehow affect Google's policies on keyword advertising and trademarks or that Google would get involved because of the increased burden. The good news here is that this order has no effect whatsoever on Google's current U.S. policy of allowing competitors to bid on each other's trademarks so long as the marks aren't used in ad copy. The Order is only enforceable between the parties. That means that the Orion Bank couldn't take Google to court for failing to follow this order. Its only option would be to take Orion Residential Finance to Court and ask for sanctions. Thus, I'm sure Google won't be bothered by this result.
Concluding Remarks
In short, the case didn't add to the interesting discussion of whether it is infringement to bid on a competitor's trademark. Instead, it just affirmed that if Company A's business name infringes on Company B's name, then Company A will have to change its name.
As Eric Goldman pointed out, the exciting thing about this case is that two attorneys and a judge seemed to understand how keyword advertising works. Now that IS newsworthy!
I hope this clarifies the case and its potential impact on the industry.
Best Regards,
Sarah Bird
As Eric Goldman pointed out, the exciting thing about this case is that two attorneys and a judge seemed to understand how keyword advertising works. Now that IS newsworthy!
I hope this clarifies the case and its potential impact on the industry.
Best Regards,
Sarah Bird
Great post as always Sarah! Thanks for calming the doomsayers and really putting this into perspective.
Sarah while your summary of the particulars were good... it is the ability of precedent to effect future suits that has implications.
What is to stop someone from adding Google into the mix to demand stopping the running of trademarked terms?
As the writer of the SEW article I was not trying to be Chicken Little but was trying to get people to see the potential for abuse of this ruling if applied equally to another suit.
OMG, I just spent a significant amount of time coming up with a nice detailed response to your concerns, then my session timed out and I lost it when I tried to post! ARgh.
Thus, here is a less articulate, much shorter response to your concerns.
The things stopping plaintiffs from adding Google into the mix are the same things that have always stopped people from adding Google into the mix: (1) it's expensive and (2) you don't get better results.
It's expensive because Google will bring in a formidable team of attorneys who you then have to respond to. This increases costs in what is already likely to be a very expensive case. (TM cases are VERY expensive because you've got to run all these crap surveys about whether consumers were confused etc etc.) Thus, TM cases are usually brought to force the other party to settle.
Well, the things that Orion is complaining about (use of its TM in ad copy) is already prohibited by Google. Thus, if stopping this kind of use was your only goal, you just need to invoke Google's TM Complaint policy. Judges don't like it when you go to Court to get the remedy that you could have gotten just by asking.
Also, don't forget that you're unlikely to get any money out of Google. Google could invoke the publisher/printer defense to contributory infringement which eliminates money damages and leaves open only an injunction. Thus, you're not going to make the money back that you spent on litigation by suing Google.
In cases where the two companies have similar names and only one owns the TM, it makes much more sense to just sue the infringing company because you can get all the relief you need (across all forms of advertising, not just SEs) for relatively cheap.
Also, another interesting thing to keep in mind is that the Orion Order was based on agreed order and therefore no issues of law were tried in a meaningful way. Further, it was only a district court order (the lowest of the federal courts), which means that it is not precedential or binding for other courts.
The Orion case simply didn't address any of the interesting issues about keyword-triggered advertising that could destroy the value propisition for advertisers and SEs....Questions about whether purchasing or using trademark-protected keywords (through Adwords or meta tags or other "invisible" uses) constitutes a "use in commerce" and is confusing to consumers.
Hope this helps to clarify my argument above and not just make it more confusing. : )
Thanks Sara.... if my sister was not a lawyer I think I would be calling you when I need things deat with
PS I like the lawyer addition of "not likely" just in case
The Bancorp case certainly wont break the internet but cases like this and AA v. Google will certainly provide fodder for attorney's to try and break other companies. There are the lawyers argument and then there is Joe Business owners street level perception that someone is getting a free ride off his intellectual property... To different animals...
I like this....
Sarah, that was an excellent summary of the situation, and cleared up a lot of the doubts regarding the case I had.
Trademark bidding is a huge bugbear of mine, and I am quite concerned with the situation in the UK, some brands will lose a lot of money just to maintain positions.
However, its good to see that the legal system in the US is looking at online in an improved manner. I hope that the UK will follow suit.
An interesting one to watch out for in the UK is Last minute deciding to take Google to court over the recent policy change. From the grapevine I hear that they arent the only one. However, a recent yahoo win may be google way out if the case runs in the same vein... (p.s it may be my dry humour but I found it funnhy that they are called Bird and Bird and the only other Lawyer / blogger that deals with online marketing is Sarah Bird... )
It's about time someone stood up to Google on this.
There's a bit of a gap between trademark law in the UK and the US that IMHO the new Google policy doesn't take into account. Their US policy does not wash here. They may argue that it is based on the definition (read: explicit examples) of trademark infringement given in the UK Trademark Act, but they seem to be interpreting this far too tightly.
I really hope that the Yahoo! decision doesn't hold any precedence. It was not a "full" case, but was just a decision based on a short hearing in which Yahoo requested the case be thrown out. Mr Spicy was representing himself, and did not have any sound legal arguments for the court to analyse. And as such, I feel that they missed the point. I can't help but think that should someone with enough cash to pay for decent legal representation take this through the courts again, the decision that search engines do not infringe TM rights as they do not "use" trademarks wouldn't face a fairly serious challenge.
We shall see...
The use of trademarked terms so long as they are not in the ad should be allowed.... many terms are synonymous with the entire space... people ask for Coke when they mean cola... ask for a kleenex when they want a tissue
The analogy used is people go to the grocery store for Coke but when they get to the aisle buy another cola... they have choices - obviously the bottles are labeled differently... if they weren't then something would be amiss
Cool clarification and background info--thanks, Sarah!
Ha! "The exciting thing about this case is that two attorneys and a judge seemed to understand how keyword advertising works. Now that IS newsworthy."
Great sound bite, Sarah.
It's interesting though that our friends across the pond can't bid on competitor brand names. What's the legal precedence as our reach gets more and more global? Sure, there are the hold outs like China and others that advocate a policy of censorship, but is seems like those actions and laws will get harder and harder to enforce.
Clearly, at least three attorneys understand how keyword advertising works. ;-)
Seriously, my remaining concern about this, though, is attorneys and judges who don't understand this looking to add negative keywords into all sorts of actions. The problem usually isn't when courts know all about a given topic. It's when they know just a little bit.
Actually Google has allowed the UK to start using trademarked terms as in the US now.
One thing. To be ethical, you SHOULD NOT, repeat, NOT try to bid on a competitor's tradmarked name. I know that that was not advocated in the article, but we want to try todo ethical things that work in th long haul, not short sighted things. That is one sure way to lose customers. And believe me, I know. We will create more friends up at Google that way.
Orion Residential Finance were bidding on their own brand and there's no indication they were intentionally setting out to infringe competitor trademark. It's unfortunate that it happened to potentially confuse customers (which is what passing-off is all about).
I love legal Mondays! I found it particularly interesting that they just went straight to settlement, such creepy old-boys-network stuff.