Google vs the Universe

“Search Engine Optimization” has become the tactic of choice for many marketers, and the most powerful example of it is Google’s AdWords service. AdWords is so simple, it terrifies many companies.

AdWords allows marketers to place ads on search results pages when web surfers use specific key words. If you were Burger King, you could make sure your ad popped up under "Sponsored Links"(see example at right) every time someone did a search for McDonald’s. (Yes, I know how expensive that would be. It’s just an example!)

The question is: is this legal? Or does trademark protection mean that other companies have no right to buy or sell ad space on pages that include your trademarks?

The answer is: no one knows. For the first time, one U.S. court (in Virginia) has ruled that what Google is doing is okay. But it drew the line on allowing companies to use competitors’ trademarked names in their own ads. (A lot of people have been running ads that say things like, “Looking for Coca-Cola? Try Pepsi instead.”) And Google has apparently not been very consistent about shutting these offending ads down.

But similar cases are heading toward other U.S. courts, and the experts aren’t sure the AdWords business model can survive them all. Here’s a link to a recent story by Bob Heyman that says the whole thing could end up in the Supreme Court.

Heyman’s conclusion: Marketers shouldn’t worry – yet. In the meantime, “Do be sure that client search ads don't include third party trademarks...

"While lawsuits so far have only named Google as a Defendant, no agency would want to be responsible for having a client be sued as a party to yet another Google lawsuit. And good search practice needs to include policing competitor's ads to be sure they don't infringe your clients' marks. Don't rely on Google to enforce this...
“But nothing about the Geico rulings changes the fact that buying competitors’ trademarked keywords remains a best practice for SEM. Indeed, anecdotal evidence indicates it may well be the most successful of all search tactics.
"However, the wise Search marketer will prepare for the day when a Federal District Court may rule against Google and backup strategies will be needed.”

My take? AdWords is a powerful medium that levels the playing field between entrepreneurs and giant marketing organizations. Expect big business to fight it all the way.