Not content with preventing a company from using a Bank’s trade mark (“Orion”) in its advertising, a US Court has ordered a defendant to require the activation of the term “ORION” as a negative keyword. Ray Coyle cuts the e-babble and explains the significance.
Who: Orion Bankcorp Inc and Orion Residential Finance LLC
When: 25 March 2008
Where: United States District Court, Florida, USA
Law stated as at: 30 May 2008
The facts of this case are actually very straightforward. Orion Bankcorp Inc. (the "Bank") is a large regional bank in Florida and has registered ORION, ORION BANK and ORION BANKCORP as trade marks in the United States.
Orion Residential Finance LLC ("LLC") set up a web site at www.orionresidentialfinance.com through which it offered financial and other services. The Bank brought a claim against LLC for infringing its trade mark rights. LLC do not, based on the judgment handed down, seem to have put up much of a fight and the court seems to have had no difficulty in finding in favour of the Bank.
As is fairly usual in such cases, LLC was restrained from using the term ORION, ORION RESIDENTIAL FINANCE or any other confusingly similar term and also restrained from using any form of internet advertising containing any mark incorporating ORION when purchasing adwords, keywords or the like.
However, there is one further aspect of the court's decision which does make this case unusual. The Judge, not content with merely preventing LLC from using the Bank's trade mark in its advertising, ordered them to "require the activation of the term "ORION" as negative keywords or negative adwords in any internet advertising purchased or used".
Why this matters:
The activation of negative adwords is a facility offered by search engines to allow advertisers to filter who their advert is shown to. As advertisers may pay the search engine on the basis of the number of times their advert is shown, this can be a very useful tool in avoiding wasted advertising costs. For example, the owner of a wine bar called The Winehouse would pay to advertise to anyone entering the keyword "Winehouse" but would activate "Amy" as a negative keyword in order to ensure that they do not pay to advertise to users searching the internet for information on the singer.
We believe that this is the first time a court has seen the potential benefit of negative adwords in preventing one party from taking advantage of the name and goodwill of another. Given the increasing importance of internet advertising and the dominance of search engines, particularly Google, in the internet advertising market, we may be seeing more of such judgments in the future.
Other uses for negative adwords
However, it is not just when disputes reach litigation that negative adwords may be a useful tool.
Agreements between parties not to use each others' trade marks may be made more effective by including an obligation to activate the mark as a negative keyword in any internet advertising as they will effectively filter out that party's customers from seeing the advertising. For example, in the recent dispute in Spain between Citi, an estate agent, and Citibank over the use of the mark "Citi", the use of negative adwords may have helped the parties reach agreement.
Citi could have activated "bank" and other banking-related terms as negative keywords, thereby helping to prevent customers looking for Citibank from being shown their online advertising.
Their use should also be considered in circumstances where a company sells part of its business thereby creating two similarly named but separate entities. Mutual use of negative adwords by the two businesses may not only avoid confusion on the part of customers but also prevent disputes arising in the first place.