Trademarks as Search Engine Keywords: Much Ado about Something?
Franklyn, David J., Hyman, David A., Harvard Journal of Law & Technology
TABLE OF CONTENTS I. INTRODUCTION II. BACKGROUND ON THE ISSUES A. Overview B. Search Engine Output Architecture and Labeling C. Keyword Auctions D. Search Engine Policies Regarding Trademark Usage 1. United States 2. European Union 3. Other Regions III. SEARCH CONTROVERSIES OVER TRADEMARKED KEYWORDS A. Case Law 1. Overview 2. Judicial Assumptions A. Consumer Goals and Expectations B. Intent C. Consumer Knowledge of and Attentiveness to Search Page Architecture and Labels D. Appearance of Plaintiff's Mark in Defendant's Ad Text E. Likelihood of Diversion F. Likelihood of Confusion B. Academic Scholarship C. Private Litigation--Consumer Surveys IV. EMPIRICAL FINDINGS A. Coding Study B. Surveys 1. Overview 2. Background on A. 1st Survey B. 2nd Survey C. 3rd Survey 3. Survey Findings A. Consumer Knowledge of Search Page Architecture B. Adequacy of Disclosure of Paid Links C. Consumer Preferences and Expectations D. Consumer Attentiveness to Search Page Architecture and Labels E. Paid Link Click-Through F. Diversion and Confusion G. Fairness Norms H. Regression Analysis V. DISCUSSION A. Limitations of Our Findings B. Framing of the Trademarks as Keywords Debate C. Search Page Architecture and Labels D. Trademark Inclusion in Ad Text E. Intent F. Diversion G. Likelihood of Confusion H. Survey Complexities I. Whither Trademark Law: Confusion, Free-Riding, or Both? J. The Perils of Casual Empiricism K. What is Really at Stake? VI. CONCLUSION APPENDIX ONE: TABLES
Google, Bing, and Yahoo are the primary gateways to the Internet for most people in the United States. (1) Google is worth more than $260 billion, and Yahoo is worth more than $25 billion. (2) These lofty market capitalizations are almost entirely attributable to the income generated by the advertising that accompanies search results. (3)
Most searches result in one or more paid ads appearing alongside the unpaid (organic or algorithmic) results. The specific ads that appear are selected because they relate to the search terms ("keywords") entered by the user. For example, a search for "bicycle" will return ads from stores and websites selling bikes as well as bike manufacturers. A search for "wedding" will return ads from stores and websites selling wedding supplies, wedding dresses, and wedding cakes. A search for "mesothelioma" will return ads from plaintiffs' attorneys. Each of these entities pays the search engine if its ad is clicked on, irrespective of whether a sale is ultimately made. (4)
When search engines began offering ads using trademarks as keywords, disgruntled trademark owners filed more than one hundred lawsuits in the United States and Europe. (5) Despite the volume of litigation, there has been little independent empirical work on consumer goals and expectations when using trademarks as search terms, on whether consumers are actually confused by search results, and on which entities are buying trademarks as keywords. Instead, judges have relied heavily on their own intuitions, based on little more than armchair empiricism, to resolve such matters.
We report on the results of a two-part study, including three online consumer surveys and a coding study of the results when 2500 trademarks were run through three search engines. Consumer goals and expectations turn out to be quite heterogeneous: a majority of consumers use brand names to search primarily for the branded goods, but most consumers are open to purchasing competing products. (6) We find little evidence of traditional actionable consumer confusion regarding the source of goods, but only a small minority of consumers correctly and consistently distinguished paid ads from unpaid search results, (7) or noticed the labels that search engines use to differentiate paid ads from unpaid search results. …