Legal Eye: Google declares trademark open season

This month Google changed its policy on selling keyword search terms containing trademarks. Who is the real loser, asks lawyer Sian Croxon - the trademark holder, the consumer or the law itself?

If you're like me, you've never given much thought to how search engines work - you're happy to enter your search terms and click on the most relevant result. Perhaps now is the time to look a little more closely?

There is a whole unseen, murky hinterland of bidding and trading on keywords that is helping to fund a billion-pound search marketing industry.

That industry has recently been rocked by Google's decision to change its trademark protection policy for UK and Irish advertisers.

As of the beginning of this month Google will no longer police the unauthorised use of trademarks in any new keyword purchases.

Exclusive column: The Naked CIO

See what this CIO really thinks…

The Naked CIO: Unequal opportunities

The Naked CIO: The true cost of IT

The Naked CIO: Crunch time for large projects

The Naked CIO: Boardroom stereotypes

The Naked CIO: IT staff disloyalty

The Naked CIO: Cut the bull

In addition, from next month, it will also allow all keywords that include unauthorised trademark terms, which it previously blocked, to be bid against.

What that means in practice is any advertiser can purchase a keyword - and its associated sponsored links - that contains a trademark-protected term. It is open season for all previously unauthorised trademark terms.

It's a move that replicates a system already in operation in the US. But as well as seeking greater uniformity in practice, the move was almost certainly prompted by a recent landmark court judgement in the case of Wilson v Yahoo! UK Ltd, in which the judge ruled that search engines had no responsibility or liability for enabling the use of trademark terms by unauthorised online advertisers.

As a result, advertisers whose brands are trademarked terms will now need to purchase the keywords related to their brands to ensure consumers who search on their brand terms are not diverted to competitors and vice versa - the increased competition means costs will inevitably rise.

In effect, Google is obliging advertisers to pay to protect their own brands online while simultaneously enabling them to capitalise on the popularity of competitors' trademark terms.

When you take into account that navigational search - where users search for a specific brand name - is on the up and up, the potential impact on trademark owners could be significant.

It's not all bad news for advertisers though. The new policy still prevents other advertisers from including trademarks in their ad copy without permission and although other brands can bid on a trademark, only the authentic brand's ad will actually have the trademark within it.

With navigational search, too, very often consumers are browsing with a specific site in mind so they are more than likely to go to the ad containing the trademark they searched for rather than stray elsewhere.

Google and trademarks:
Key issues

1. Trademark protection vs consumer choice.

2. Application of US precedents in a UK context.

3. Brand integrity vs brand monetisation.

4. Search engine liability for trademark protection.

For smaller brands, in particular, it also opens doors and enables them to make the most of their goods or services associations with bigger organisations.

And arguably, consumers too are afforded more choice by the changes and can have free rein on finding the brands and products they want, how they want.

But even if on balance advertisers and consumers can reap the benefits, the real victim here is probably trademark law itself.

To open up a free-for-all on terms could be seen as devaluing the legal philosophy on which trademarks are founded. The move may not directly contravene UK trademark law but in practice it certainly could confuse matters and could still result in expensive and time-consuming legal action.

Already industry bodies such as the Industry of Practitioners in Advertising have called for a delay in the introduction of the changes and an explanation of their rationale. Advertisers may soon follow suit.

In the quest for even greater online ad relevancy, advertisers and search engines are in danger of losing sight of their real core currency: the integrity of the brands themselves.

To trade in trademarks sets a dangerous precedent and one which could prove counterproductive. Consumers' brand loyalty will be severely tested and the integrity of brands could suffer badly leaving a big question mark over the effectiveness of trademark law itself.

DLA Piper is the world's largest global legal services organisation with more than 3,600 lawyers across 64 offices and 25 countries. Its award-winning technology, media and commercial practice employs 70 partners specialising in IT, telecoms, media, sport and IP law. Experts in convergence between the technology, communications and media sectors, it advises some of the world's leading multinational entertainment, media, sport and technology companies.