Free for a Fee

Internet search engines such as Google and Yahoo! earn a majority of their profit from selling advertisements to appear next to search results. Google’s coveted advertising space, however, causes nightmares for trademark holders when their trademarks are auctioned by Google to competitors as keywords to trigger the competitors’ advertisements when the trademark is used as a search term. Advertisers strategically bid on trademarks of competitors to ensure that their ads appear whenever the trademark is used as a search term, instead of the advertisements of the trademark holder, as a way to gain visibility and lure consumers away from the trademark holder.

Trademark holders object to this practice on the basis that it allows competitors to free ride off the goodwill and reputation of a trademark when used for the specific purpose of diverting consumers.

Note Author: Rachel Friedman

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