Almost as soon as the virtual ink had dried on its groundbreaking Trademark Protection Act, which appeared to outlaw the sale of competitors’ brands as keywords for search engine marketing, the Utah state legislators appeared to run scared. Stephen Groom reports.
Topic: Online advertising
Who: Utah state legislature
Where: Salt Lake City
When: March/May 2007
Law stated as at: 30 May 2007
In March 2007, the Trademark Protection Act was passed into law in the state of Utah. Due to take effect on 30 June 2007, it established a new cause of action, infringement of "electronic registration marks" ("ERM").
The measure also established a detailed registration procedure for ERM including an annual registration fee of $250 for registration in a single class of goods or services. Also created was a right of civil action by ERM owners against any entity using a registered ERM to cause the delivery or display of (1) an ad for a business or product in the same class as the ERM, or (2) an ad that was likely to cause confusion between the business of the ERM owner and that of the defendant.
So it will be quickly seen that in return for useful new state revenue in the form of ERM registration fees, Utah was going to give ERM owners a clear right of action against other businesses using their ERM as a keyword in online advertising. This is the practice where business X buys the trade mark of competitor Y as a search engine keyword. This ensures that when web searchers key in Y's trade mark in Google or other search engines, ads for X appear in the search results.
But there were rumblings of discontent. It was pointed out that only the US federal government was able to regulate interstate commerce and legal pundits said there was a "high probability" of the measure being challenged.
And so it came to pass in May 2007 and the doubters were vindicated when it was announced that following representations to Utah legislators by delegates from Google, eBay, Microsoft, AOL and Yahoo, the law would not be enforced.
Why this matters:
It looks as though this bid for legal clarity in the still controversial world of online keyword sales has bitten the dust. However it is unlikely the issue will go away anytime soon as trade mark infringement and similar cases rumble on in jurisdictions throughout the world.
Head of Marketing and Privacy Law
Osborne Clarke, London