Tuesday, May 06, 2008

Searching for an outcome: Google Vs the Trademark owner

As a lot of us are probably aware now Google’s trademark policy launched 5th May this year, these changes are already having a significant impact on the search aspect of some campaigns and subsequently, it has come to light that there may be questions relating to the legality of this change in policy.

Following this uncertainty, some large scale advertisers have stepped forward and expressed their willingness to challenge the overwhelming power that is one of the world’s largest sellers of advertising space: Google.

The Background

For almost 9 years, marketers and agencies have benefited from Google’s policy on Trademark terms. Enforcing a policy which stipulated no other advertiser could bid against a registered trademark, Google offered a welcome defence against the competitor and left advertisers safe in the knowledge that their brand and trademarks were well protected…

However, accounting for 80% of the UK’s market share, this change in policy sees Google open up keyword bidding on all keyword terms, including trademarks. Effectively, more than one advertiser can now bid on and appear in sponsored links after a user has typed in a search query using a trademarked term. Ultimately, trademarks are no longer protected against competitors and affiliates.

Lastminute.com speak up…

It has been reported by Channel 4 News that the chief executive of Lastminute.com, Ian McCaig, has stated that Google's proposals will “cost them millions”, could breach trademark law and that they are prepared to sue if Google do go ahead with this change.

Lastminute argue: "Google's policy change is a big problem and we object to it. We are investigating with vigour the legal position and if that investigation concludes positively then we will absolutely pursue a legal case, no question." (Channel 4 News)

Fundamentally, a high proportion of some of the UK’s biggest brands use Google to facilitate a major proportion of their Search advertising spend.

Lastminute.com do not stand alone in this view. Tesco “have consulted their legal team”, while some companies, including Auto Trader have stated they would “consider joining with other brands in a group legal challenge to Google.”

Google defends its decision…

Unsurprisingly, Google stand by their decision to change the policy and state this amendment will improve the user experience by offering competing choices, allowing consumers to make more informed decisions.

Google also have the advantage of experience, as it is not the first time the search engine giant has enforced this controversial change in policy.

In 2004, Google introduced the same change in policy to the US and Canadian markets. Some sectors, including; travel, finance and retail, saw large movements in market costing as competitor bidding initially became a battle field. However, after a few months, the market found its natural position and the cost acquisition consolidated down after rivals began to understand how much revenue and sales could be driven from competitor brand terms.

The MediaVest View

Only days into a policy which is unlike anything the UK market has experienced during its search marketing history, the conclusion of this debate and possible legal battle, is unclear.

In their Legal Guidance Notes, The Institute of Practitioners in Advertising (IPA) point out that the law is very uncertain and untested in this arena. Their view is that, bidding on keywords of competitors may be an infringement of trademark.

“Clearly Google has taken the advice that it is not and for obvious financial and costs reasons, and due to its dominant position in the search market, Google is prepared to take the risk. Until an advertiser in the UK is prepared to bring a legal test case we shall not be sure of the way the courts will interpret trade mark law in this new media scenario.”

It will be interesting to see how this one unfolds in the coming weeks. Now that big brands such as Lastminute.com, Autotrader and Tesco have voiced their initial opinion to the media.

1 comment:

  1. Anonymous8:33 a.m.

    Good article. Can you see anyone mounting a legal challenge against Google? Moreover can you see it actually succeeding, surely Google set the T and C's for their own index?