Electronic Retailer - May 2011 - (Page 58)

BY GREG SATER CHANNEL CROSSING: LEGAL Legal Measures for Online Brand Protection These days, it’s all too common for a marketer to look online and find something there that’s brand-damaging. It could be a negative review by a purported customer on a purported customer review site, unfairly slandering the product. It could be a direct competitor or an affiliate thereof coming up as a sponsored link on Google whenever anyone searches their product by name. It could be any number of sellers on shopping sites such as Amazon selling counterfeits or, even if they’re authentic units, selling them at a price so low it undercuts all of the authorized online distributors. What’s a marketer to do? The case law in this area continues to develop no less quickly than the Internet itself. I feel it’s important not only to keep track of it all, but also to get into court and push the envelope there, to try to develop that case law even further. That way, more and more judges may come to understand the need to protect marketers’ investments in their brands and their goodwill, while also respecting the right to free speech and fair competition. In Network Automation, two competitors each marketed small business software, used for job scheduling and task management, on the Internet. The defendant paid Google to come up in response to searches for the name of the plaintiff’s product and, in so doing, had sponsored links that contained only generic or descriptive words in the ad text, such as “Job Scheduling” and “Job Scheduler,” rather than displaying its company’s name. The ad text also had other descriptive terms like “Easy to Deploy” and “Scalable.” The trial court issued an injunction against the competitor, but it was reversed by the appellate court, which sent the case back down. In the view of the court of appeal, the key factor to be considered, on remand, will be the “labeling and appearance of the advertisements as they appear on the results page.” That is, the entire results page is to be considered, as a whole, including all of the ad text that was used in the sponsored result. Did the competitor clearly identify itself or not? Although the court made “clear labeling” of a competitor’s identity in the ad text the legal standard, it unfortunately declined to give any examples of “clear” versus “unclear” labeling. The court did make clear, however, that if a plaintiff can prove that its competitor is confusing consumers into thinking, even momentarily and temporarily, that a particular sponsored link is going to lead to the trademark owner’s site, when it doesn’t lead there, then that plaintiff can win damages, the other side’s wrongful profits and an injunction. Why? Because “initial interest confusion” has occurred. However, the court stressed: “The owner of the mark must demonstrate likely confusion, not mere diversion.” In addition to the clarity or lack thereof of the ad text, judges also will consider the degree of care exercised by purchasers of that type of product (cheaper products with “impulse buy” behavior, like many Bidding on Trademarks as Keywords The case law continues to develop on the issue of whether it’s lawful to bid on a competitor’s trade name or trademark as a keyword search term. On March 8, the United States Court of Appeals for the Ninth Circuit issued a ruling in Network Automation v. Advanced Systems Concepts that broke new ground. It concluded that if ordinary consumers, faced with a search result page online, are likely to be confused, even initially, into thinking that a click on a particular sponsored link will lead them to the trademark owner’s website when, in reality, that click is going to lead them to a competitor’s site, then there is liability for trademark infringement. It’s all about “initial interest confusion.” 58 electronicRETAILER | May 2011

Table of Contents for the Digital Edition of Electronic Retailer - May 2011

Electronic Retailer - May 2011
Calendar of Events
Your Association, Your Bottom Line
Industry Reports
FTC Forum
eMarketer Research
IMS Retail Rankings
Jordan Whitney’s Top Categories
Lockard & Wechsler’s Clearance & Price Index
Legislative Primer for the ERA 2011 Government Affairs Fly-In
Guest Viewpoint: Government, Industry and the People... Working Tirelessly Together – to Shoot Themselves in the Foot!
The Motive Behind Motivational
Guest Viewpoint: Protecting Your Brand – Logistics Behind the Buy Button
Penetrating the U.S. Hispanic Market
Guest Viewpoint: A New “Perspectiva”
Member Spotlight
Advertiser Spotlight
Bulletin Board
Advertiser Index
Classified Directory

Electronic Retailer - May 2011