Utah Law Passes Ban On Trademarked Search Ads: SEMs Discuss

Mar 10, 2009 • 9:06 am | comments (3) by twitter Google+ | Filed Under Legal Issues in Search

Last week at Search Engine Land, I covered an Eric Goldman story on Utah trying to pass a bill for the third time, on regulating search ads. In short, the bill finally passed in the Utah House (still needs to be approved by Senate) and it holds search advertisers liable for targeting trademarks as keywords. It does not hold the search companies, i.e. Google, Yahoo and Microsoft liable (that bill failed). To see the bill, click here.

Shorebreak at WebmasterWorld gives a good explanation of the bill:

This bill, sponsored by 1-800-Contacts, prevents search engines from being able to serve competitive ads if someone searches for a branded/trademarked keyword. So, for example, if someone Google's '1-800-Contacts', Google would not be able to serve LensCrafters' ad, even if Lenscrafter didn't include the brand term in their ad copy.

Now, most search companies do not allow the trademarked terms to appear in the ad copy, but do allow bidding on many trademarked terms, as long as they are not in the ad copy. There has been a ton of legal precedent in this area already, so that is why Eric Goldman is surprised it finally passed. He said it "barely made it through due to the fierce last-minute lobbying efforts of 1-800 Contacts."

That being said, some advertisers hate the law and some actually like it. Guess who likes it and who hates it? :)

Many don't believe this law will last, since e-commerce goes over state boundaries and because geo-targeting capabilities are often not 100%.

Forum discussion at WebmasterWorld.

Update: Eric Goldman updates us once again to let us know that the bill did not pass in the Utah Senate. He said the bill "died quietly last night when the Utah Senate failed to act on it before the Utah Legislature adjourned for the year."

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KJ Rodgers

03/10/2009 01:29 pm

Wouldn't this law create unfair trade practices. 1 800 Contacts should naturally pull up other contact service/products. Plus trade mark protection is lower for a non fanciful term like 1800Contacts. Im not a lawyer, but I feel this is not a strong case


03/10/2009 06:23 pm

As a Utah resident and search engine marketer it's worth noting that there is a big effort being made by technology companies, marketers and others to stop this bill from going any further. Hopefully it is opposed and we can stop talking about it:)


03/11/2009 08:15 pm

I would assume fair use would apply to some forms of search advertising. Just look at http://dunkinbeatstarbucks.com/, McDonald/Burger King commercials, insurance commercials, and many others, all of which mention competitor trademarks and logos. It's comparative advertising and as long as you're making that comparison, it should be allowed. There should be clear language that states that you can bid on trademarks as long as you clearly state (in the ad or on the landing page) that you're either allowed to use their mark or are not representing the company and shouldn't be confused with them. I would think marketers should probably even be allowed to use trademarks in the copy (although that one would be more difficult to police). I'm not a lawyer, but from any previous research I've ever done, that's how I've always understood the law.

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