Implications of the New AdWords Trademark Policy

By Kaitlyn Smeland Dhanaliwala | May 15, 2009
More Articles by Kaitlyn

Google has changed its official AdWords trademark policy as it applies to advertisers using trademarks which they do not own.  It’s also important to examine the details of the policy, since the pre-existing “competitive claims” policy still stands as an exception to these rules.  The new rules seem pretty fair, but of course Google can only profit from the change.  (This is only ironic since the policy in question is supposed to prevent anyone but the trademark owner from profiting off an established brand).

The Details – Up until now, advertisers could bid on keywords which included competitor trademarks (a practice called “conquesting”), but advertisers could never include others’ trademarked terms in ad copy. Conquesting is still legal- although perhaps not very effective in practice- AND in addition, Google now details a few very particular circumstances under which advertisers MAY use the trademark of a competitor in ad copy.

Under the new policy, an advertiser may include in its ad copy a trademark which it does not own if:

1.  The advertiser uses the term in a “generic” way that does not reference the product or service associated with the trademark.

EXAMPLE: Back in the summer of 2003, Spike Lee sued Viacom for renaming the TNN network “Spike TV.”  Viacom’s response was basically that the term “Spike” was generic and that Lee could not claim to exclusively own the word “Spike” in every context.  The two parties eventually settled, with Lee eventually acknowledging that Viacom’s intent was probably not to profit off of his name.

2.  The advertiser is an authorized reseller of goods from the trademarked brand.

EXAMPLE:  Many discount sites like Zappos sell Nike shoes.  Under the new AdWords trademark policy, they can use the trademark term “Nike” in their ads for Nike shoes without first having to be explicitly allowed by Nike, Inc.  The landing page of these advertisers must visibly demonstrate that Nike brand shoes are indeed for sale on the site.

3.  The advertiser sells products which are complementary to a trademark brand product.

EXAMPLE:  There are so many iPod accessories and iPhone apps out there that we can’t even begin to count them.  If a company sells jackets that specifically fit iPod brand mp3 players, it may use the iPod trademark in its ad copy.

    iPod accessories

    4.  The advertiser owns an informational site which has no affiliation with the sale of goods that would be competitive to the trademark owner.

    EXAMPLE:  Consumer Reports hosts a lot of content about the quality of of various branded products.  It also advertises through AdWords.  It may talk about the performance of the Kindle DX, but it doesn’t profit from the sale of Kindle books or any other electronic book reader.  So under the new trademark policies, it will be able to include trademark names in its ads for searches on specific products.

      The Exception – It does not appear that these new trademark policies have any effect on the AdWords policy for making competitive claims. Google states:

      If your ad text contains competitive language regarding other companies, specific support for this claim must be displayed on the landing page for your AdWords ad.

      You can offer support for your claim in a variety of ways such as a chart or table that compares the features and/or prices of your product versus your competitor’s product or a competitive analysis discussing why your product is superior.

      The Irony – These new policies probably seem reasonable to the average person, because they still minimize the direct profiting of advertisers from the brand equity of their competitors’ protected trademarks.  That is, after all, one of the main purposes of trademark protection.  Of course, implicit in these new policies is the fact that Google is now giving license to a higher level of bidding competition around trademarked terms, setting the stage for higher costs per clicks around popular trademarks and thereby growing margins for Google in certain pockets of search traffic.  So if any party can be said to profit from these new trademark policies, it would be Google itself.

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