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Proposed Utah Law would Ban Trademark-Triggered Competitive Ads

     
10:46 pm on Mar 6, 2009 (gmt 0)

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This bill [le.utah.gov], sponsored by 1-800-Contacts, prevents search engines from being able to serve competitive ads if someone searches for a branded/trademarked keyword. So, for example, if someone Google's '1-800-Contacts', Google would not be able to serve LensCrafters' ad, even if Lenscrafter didn't include the brand term in their ad copy.

The bill passed the Utah House today by a vote of 38-36 and now goes to the state Senate.

I'd bet 30%+ of Google and Yahoo's revenue comes from brands bidding on each others' trademarks, so if this was ever taken up at the national level, it would eviscerate the search engines' revenues.

10:57 pm on Mar 6, 2009 (gmt 0)

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Does Google, Yahoo, MSN, or other SEs have offices or data centers in Utah? If not, I don't see how it would have jurisdiction even if it passes.
11:45 pm on Mar 6, 2009 (gmt 0)

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By serving the ads in Utah and interacting with a Utah consumers, my guess is that the argument could be made that they are conducting business in Utah and therefore the law would have jurisdiction and dramatically effect the revenue that Google or any Engine would receive.

This is a Utah bill only, it would need to be enacted state by state to make any significant impact though. My guess is that would never happen given the scope,

12:04 am on Mar 7, 2009 (gmt 0)

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By serving the ads in Utah and interacting with a Utah consumers, my guess is that the argument could be made that they are conducting business in Utah

If that argument held water, then New York would make require Utah residents pay NW sales tax on anything they bought online from a New York merchant.

My guess is that would never happen given the scope

I agree.
12:20 am on Mar 7, 2009 (gmt 0)

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> ... if someone Googles '1-800-Contacts', Google would not be able to serve LensCrafters' ad, even if Lenscrafter didn't include the brand term in their ad copy.

These legislators have a serious lack of understanding about how search and "keyword association" work then... They assume that Google somehow "knows" every trademark and all the potential competitors in each of those trademarks' market segments. You cannot just base the ad suppression on trademark-words alone, as the previous discussion here about searches for "American airlines" (small "a") demonstrated; The additional knowledge about the search context is required.

I'm sure Google's doing fairly well at this but with the current state of the art, it'd probably just be safer for Google to block Adwords and Adsense access from Utah, if ROI versus potential cost of litigation is taken into account.

Jim

1:30 am on Mar 7, 2009 (gmt 0)

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Interstate Commerce Clause of U.S. Constitution meets Utah Legislature?

If so, ICC usually wins.

Piecemeal legislation affecting matters of cross-border commerce tends to screw up commerce, badly. The Web is inherently cross-border. Patchwork legislation will likely be lethal to web-based commerce. Therefore I expect many State efforts to regulate the Web will . . eventually . . wither.

11:23 am on Mar 7, 2009 (gmt 0)

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This kind of filtering had already been done in Europe for a long time (along with keyword filtering based on the ad content, which is the only thing done in the US now). If a European trademark holder requests Google to ban competitive ads triggered by search for the trademarked term, then Google blocks such ads (regardless of the content of the ad) except the ads from advertisers exempted by the trademark holder (their AdWords IDs).

I think the reason is that they lost a case with a European trademark holder for refusing to apply such filters. If it works in Europe, it could work in the US too.

[edited by: true_INFP at 11:26 am (utc) on Mar. 7, 2009]

1:17 pm on Mar 7, 2009 (gmt 0)

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Why doesn't 1-800-contacts just file a trademark restriction for their trademarks instead of trying something like this? Would take care of the issue pretty much.
4:16 am on Mar 8, 2009 (gmt 0)

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file a trademark restriction

Valid for ad text only, not for keywords.

9:06 am on Mar 8, 2009 (gmt 0)

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Are they talking about paid search or both paid and organic?
11:04 am on Mar 8, 2009 (gmt 0)

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If 1-000-contacts are that bothered couldn't they send several Emails to LensCrafters or who ever and ask them to stop?

RJ

1:03 am on Mar 9, 2009 (gmt 0)

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A bill being introduced in a state legislature has about as much chance of having an effect on anything as a butterfly flapping its wings somewhere, maybe less.

Most bills that are introduced are never passed. Many such bills are introduced by legislators doing a favor for a constituent or, more likely, a campaign contributor.

Legislators don't really expect such measures to pass and usually spend little to no time doing the horse-trading necessary to get them through both bodies of the legislature and past the governor. But having introduced the bill, they can tell the folks back home they did their damnedest.

At least half the time, the bills are written by lobbyists who also know they won't pass but want to look good to their clients. In fact, yours truly has written all kinds of ridiculous bills that, thank god, never saw the light of day after they were introduced.

7:00 am on Mar 9, 2009 (gmt 0)

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I would love to see this become law.
2:19 pm on Mar 9, 2009 (gmt 0)

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If 1-000-contacts are that bothered couldn't they send several Emails to LensCrafters or who ever and ask them to stop?

It's not that simple. A broad match keyword, say "contacts" could still trigger an ad when someone searches for 1-800-contacts. Without factual Google data to back it up, how could one advertiser be 100% sure a competitor is bidding on their branded keywords?

Could one advertiser force a competitor to add a negative keyword for their brand?

What if I own a single word domain, which happens to be a very popular keyword? Could I stop people from bidding on it? I doubt it.

Google probably could allow advertisers to opt into some sort of trademark policy which would not allow others to bid on their brand, but there would still be limitations for many advertisers. Not to mention the the loss in revenue for Google.

4:03 pm on Mar 10, 2009 (gmt 0)

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>Why doesn't 1-800-contacts just file a trademark restriction for their trademarks instead of trying something like this?

Nobody is doing searches on "1 800 contacts". Surfers are doing searches on the indubitably generic term "contacts".

That would be like American Airlines filing a trademark restriction for the world "Airlines". The courts would slap them so silly, they could go into politics.

6:09 pm on Mar 10, 2009 (gmt 0)

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Maybe if brands started letting their affiliates advertise on their brand name their affiliates would push the competitors 'junk' out of the top ads (this may not work for the largest brands but would do wonders for many others). I understand that brand control is a big deal but guess what? On the internet you lose your 100% control of your brand - there is no way you can fix that so stop trying to and spend your time/money on improving your products and your advertising so that people will want your brand regardless of what they see/hear/read in other ads.
1:52 am on Mar 11, 2009 (gmt 0)

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Physics, you are so right. Merchants spend so much effort banning their affiliates and yet by doing so instead of having a page full of people promoting their product it becomes them and 10 other competitors...what ignorance...
2:01 am on Mar 11, 2009 (gmt 0)

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Thanks jkwilson78 ... nice to know I'm not the only one who thinks so.
I forgot to add to the above rant "And stop fighting against your own affiliates!"
6:47 pm on Mar 13, 2009 (gmt 0)

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It wasn't passed in the Utah Senate last night. I would link to the "blog" that has the details, but not sure if it is allowed.
9:11 pm on Mar 14, 2009 (gmt 0)

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It will be back. One of the Utah legislators is, believe it or not, an employee of the corporate sponsor...a hired lobbyist.

Yes, I had a hard time believing that was legal....even in Illinois, it's not considered polite to admit stuff like that in public.

3:27 am on Mar 16, 2009 (gmt 0)

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Not allowed to compete with other advertising? egads, we're heading backwards.

edit: I don't believe this law will affect anyone anyway. Our computers are only access points, the data we're accesing isn't housed in Utah. read - it doesn't belong to Utah, can't be taxed by Utah and certainly cannot be used to sue out of state individuals for the actions of strangers in their own homes.

Search engines are data centers, the bill doesn't target the people generating the pages with "competitive" ads to begin with.

I hope the search engines retaliate by banning the practice of advertising trademarked terms completely, god forbid someone generate a page with competing products.

Who thinks this stuff up anyway ?

[edited by: JS_Harris at 3:35 am (utc) on Mar. 16, 2009]

3:07 pm on Mar 16, 2009 (gmt 0)

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Nobody honest. But some strains of pond scum exert a kind of feral imagination related to financial scams.
1:56 am on Mar 17, 2009 (gmt 0)

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By serving the ads in Utah

They serve the ads at the data center. If that's not in Utah...

2:55 pm on Mar 18, 2009 (gmt 0)

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as is, a company can request that google stop serving ads for a registered trademark or a trademark by rights of first use. i sent them a letter in representation of a company because their competitor would show up when you googled the company's name. google took down the ads, and competitors haven't been able to advertise on the trademark since.

btw: i didn't know a private company could publicly sponsor a state bill; some democracy, huh.

 

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