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Utah Bans Keyword Advertising
Eric Goldman writes "Last month, Utah passed a law banning keyword advertising. Rep. Dan Eastman, the Utah legislator who sponsored the law, believes competitive keyword advertising is the equivalent of corporate identity theft, causing searchers to be (in his words) 'carjacked' and 'shanghaied' by advertisers. He also takes a swipe at the EFF, dismissing its critique of the law as 'criticism from the fringes.'"
Before you dismiss these laws, read these posts discussing the problem and the legality:
h -trademark-protection.htmli ty-of-trademark.html
http://senatesite.com/blog/2007/04/guest-blog-uta
http://senatesite.com/blog/2007/04/constitutional
This issue isn't as simple as the Slashdot hordes may make it seem.
Well, partially, but the other big reason to have trademarks is to protect consumers. If you go to the store to get corn, and the various sources (i.e. businesses) from which the corn comes are identified -- Del Monte, Green Giant, etc. -- then you can expect that all corn with a particular trademark on it always comes from the same source, and will have basically consistent quality levels (whether good or bad). Other people cannot label their corn as coming from one of their competitors. By enforcing trademark protections, consumers can avoid being tricked in the marketplace.
But even if you want to discourage one business freeloading off of the commercial reputation that another business has laboriously established, and even if you want to ensure that like-branded goods are of like quality so that consumer expectations will be met, this does not mean that competitors cannot use each others' trademarks under the right circumstances! This is still a stupid law in that it is tragically short-sighted.
For example, suppose I grow corn, and unlike my competitors, I still use the time-tested method of waiting to harvest until I can rent an elephant and verify that the corn reaches eye-height. It is not an infringement or dilution for me to advertise that I do this and that my competitors, who I mention by name, do not. You see this all the time in product comparisons where actual products are mentioned instead of silly workarounds like 'Brand X' or whatever. It's called a nominative use, and it is legal.
But apparently not under this law! Utah doesn't think that if someone searches for Del Monte that Green Giant cannot leap into the fray and claim (if it's true) that their corn is better. Likewise, a grocery store can't advertise that they carry Del Monte, which is kind of important given that they don't seem to distribute directly from the canning plant to the dinner table. That's another nominative use.
There may also be difficulties with trademark fair use (which is a confusingly named but totally separate doctrine from the more well-known copyright fair use doctrine) which permits everyone to use words which happen to be trademarks in their non-trademarked capacity. For example, Apple is a trademark for computers, but apple is not a trademark for the fruit of the same name. If you search for 'apple,' and Google ignores case as pretty much everyone on the Internet must, then there's nothing wrong with the apple farmers buying up all the ads. But would this be allowed under this law? I'd be worried about it, and that alone isn't very good. Particularly given that if everyone passes or doesn't pass, their own version of this, it creates a patchwork of regulation and now I have to check all over the place.
Frankly, aside from not surviving on its merits, I predict that the Interstate Commerce Clause will kill this in court since it makes it too difficult for businesses to engage in commerce nationwide. If people really want this -- and I think it's not a very good idea -- then it would be more appropriate to get Congress to do it. States should not.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.