Google has announced that it will soon begin allowing U.S. advertisers to use trademarked keywords in limited circumstances in text ads, much as Yahoo! already does.  Google currently allow advertisers to bid on trademarked terms as keywords that could cause an ad to appear, either next to Google search results or on a third-party publisher’s website.  That policy will not change, and is discussed here by my PFF colleague Sid Rosenzweig.  The new policy is focused on the text seen by users in ads themselves and applies only if the “landing page” (to which the ad links) is used by a reseller, aggregator or parts supplier to sell only products that are relevant to the mark in question, or if the page is used to provide impartial reviews or other information about the trademarked product.  The new policy does not apply to sites/pages that (a) facilitate the sale of counterfeit goods, (b) allow the sale of a competitor’s goods, (c) criticize the trademarked good, or (d) do not provide substantial information or a purchase option.  Despite these limitations and other safeguards, Google has been sharply criticized by some trademark holders and might even be sued (e.g., for contributory infringement).

I’ll defer to the real trademark lawyers to figure out whether Google is correct that its new policy falls within the bounds of trademark law (particularly the “nominative fair use” doctrine).  But since Adam Thierer and I have been involved in an ongoing defense of online advertising against those who would squelch it through regulation in the name of privacy concerns (not at play here), I think it’s important to highlight the potential benefits to users from this seemingly arcane policy change-and to consider what this episode says about online advertising generally.  I see three main benefits to consumers from the policy change that should be considered alongside the vitally important role that trademarks play in our economy in communicating reputational information.

First, Google’s new policy will allow consumers to find products more easily because advertisers will be able to offer more descriptive and therefore informative ads, mentioning what they sell by name. Continue reading →

It seems Microsoft is facing much the same problem Pepsi faced in the 70s, when it created the Pepsi challenge (a blind taste test between Coke and Pepsi):

A stark sign of the challenge Yusuf Mehdi faces as a point man for Microsoft in the company’s battle with Google comes from the company’s own research into the habits of consumers online.

During regular “blind taste tests,” in which Microsoft asks randomly-selected consumers to score the quality of results from various Internet search engines, the quality of Microsoft’s search results have so improved that people can’t tell the difference between Microsoft and Google search results, says Mr. Mehdi, senior vice president of Microsoft’s online audience business group. But when Microsoft slaps the Google brand name on the results from Microsoft’s own search engine during another portion of its tests, users invariably score them highest.

“Just by putting the name up, people think it’s more relevant,” he says.

… Microsoft still faces the problem of the strong association in consumers’ minds between Google and Internet search. In theory, it’s far easier for a consumer to switch Internet search engines than it is for them to switch other forms of software. But Mr. Mehdi–a veteran of the Web browser wars of the late 90s in which Microsoft managed to overtake the pioneer in the category, Netscape Communications–says in reality it’s very hard to convince consumers to change their search behavior.

So, Microsoft faces an uphill battle.  Happily for the Internet marketplace, it seems they’re embracing the challenge cheerily by attempting to kill two birds with one stone:  launching an innovative new semantic search engine capable of answering users’ questions more directly while also creating a fresh new brand for what Microsoft acknowledges is a “confusing jumble of brand names for its search efforts.”  I, for one am looking forward to Microsoft’s forthcoming search engine, dubbed “Kumo.”

But I think there’s a bigger lesson here:  Google’s most valuable asset is its brand. Continue reading →

I’ve been working closely with PFF Adjunct Fellow & former ICANN Board member Michael D. Palage on ICANN issues.  Michael had this to say about the ongoing saga of ICANN’s attempt to create new gTLDs.

During the recent ICANN Board meeting in Mexico City, the Board authorized the creation and funding of an Implementation Recommendation Team (IRT).  This team was to be comprised of “an internationally diverse group of persons with knowledge, expertise, and experience in the fields of trademark, consumer protection, or competition law, and the interplay of trademarks and the domain name system to develop and propose solutions to the overarching issue of trademark protection in connection with the introduction of new gTLDs.” This IRT is tasked to produce a report for consideration by the ICANN community at the Sydney meeting.

The IRT consists of 24 members:

  • Chairwoman Caroline G. Chicoine; and
  • Seventeen members; and
  • Six ex officio members:  Four IPC-elected officers and two-GNSO elected Board Directors (Bruce Tonkin and Rita Rodin Johnston).  

I have a number of friends and colleagues serving on this team and I wish them well in their important endeavor.

I’ve previously proposed a number of rights-protection mechanisms that IRT should consider.  Today, I offer a few suggestions that I hope will guide IRT as they embark on their important work tomorrow.  In particular, I hope they’ll implement some of my suggestions intended to make the IRT process more transparent-so the rest of the global Internet can follow along with their important work and provide constructive input where possible.

Continue reading →

ICANN has just released a second draft of its Applicant Guidebook, which would guide the creation of new generic topmore generic top-level domains (gTLDs) such as .BLOG, .NYC or .BMW. As ICANN itself declared (PDF), “New gTLDs will bring about the biggest change in the Internet since its inception nearly 40 years ago.”  PFF Adjunct Fellow Michael Palage and former ICANN Board member addressed the key problems with ICANN’s original proposal in his  paper ICANN’s “Go/ No-Go” Decision Concerning New gTLDs (PDF & embedded below), released earlier this week.

ICANN deserves credit for its detailed analysis of the many comments on the original draft which Mike summarized back in December.  ICANN also deserved credit for addressing two strong concerns of the global Internet community in response to the first draft:

  • ICANN has removed its proposed 5% global domain name tax on all registry services, something Mike explains in greater detail in his “Go/No-Go” paper.
  • ICANN has commissioned a badly-needed economic study on the dynamics of the domain name system “in broad.” But such a study must address how the fees ICANN collects from specific user communities relate to the actual costs of the services ICANN provides. The study should also consider why gTLDs should continue to provide such a disproportionate percentage of ICANN’s funding—currently 90%—given increasing competition between gTLDs and ccTLDs (e.g., the increasing use of .CN in China instead of .COM).

These concerns are part of a broader debate:  Will ICANN abide by its mandate to justify its fees based on recovering the costs of services associated with those fees, or will ICANN be free to continue “leveraging its monopoly over an essential facility of the Internet (i.e., recommending additions to the Internet’s Root A Server) to charge whatever fees it wants?”  If, as Mike has discussed, ICANN walks away from its existing contractual relationship with the Department of Commerce and claims “fee simple absolute” ownership of the domain name system, who will enforce such a cost-recovery mandate?  

But ICANN simply “kicked the can down the road on the biggest concern”: how to minimize abusive domain name registrations (e.g., cybersquatting, typosquatting, phishing, etc.) and reduce their impact on consumers. Continue reading →

I’ve gotten an unusually strong reaction to a TechKnowledge piece that went out today describing how the Nordstrom retail chain is capitalizing on a Patent and Trademark Office error to throw a small business under the bus.

Beckons is an organic yoga and lifestyle clothing business that Nordstrom is trying to force off of a trademark – or out of business. It’s owned by two businesswomen in Colorado who have done everything right to get a trademark, but now may have tens of thousands of dollars in legal bills to defend it. The short article is called U.S. Patent and Trademark Office: FAIL.

I wrote about it because I think it’s an outrage. People have written to me since I published it asking what they can do.

Well, there are a couple of things. The original error is with the PTO, so you can send a copy of the story or a link to your Member of Congress. The U.S. Patent and Trademark Office is within the jurisdiciation of the House and Senate Judiciary Committees.

But it’s Nordstrom that has really taken advantage of things. And you don’t have to beg for a politician’s help to bring companies to heel. Here’s a four-step plan for helping Beckons beat Goliath. Do one or all of the items listed below.

  1. Send this page to all your friends. That’s probably the most important thing, because the more people doing the other things on this list, the better.
  2. Write a letter to Nordstrom, telling them that you disapprove of their abuse of the trademark process, and that you won’t be shopping there until they mend their ways. Here’s the address for the president of the company.

    Blake W. Nordstrom, President
    Nordstrom, Inc.
    1700 Seventh Avenue, Suite 300
    Seattle, WA 98101

  3. Print this page, copy it, and hand it out at Nordstrom. Or slip copies into the purses they sell – especially any with the “Beckon” label!
  4. If you do yoga, or know anybody who does, shop at Beckons! (Be sure to send this along to friends who do yoga.)

So those are just a few ideas for getting Nordstrom to correct its abuse of the trademark process against this small business. Please feel free to put additional ideas or report on your successes in the comments. (Got a sample letter to Nordstrom, for example?)

A well-functioning marketplace requires assertive consumers – so assert yourself!

My piece about the U.S. Chamber of Commerce event last Friday on U.S. intellectual property attachés giving a report, and taking a hard line, on the enforcement of U.S. intellectual property, overseas, is now live on

Here’s the first couple of paragraphs:

WASHINGTON, DC – Nations ranging from Brazil to Brunei to Russia are failing to properly protect the intellectual property assets of US companies and others, and international organisations are not doing enough to stop it, seven IP attachés to the US Foreign and Commercial Service lamented recently.

Meanwhile, an industry group issued detailed recommendations for the incoming Obama administration’s changes to the US Patent and Trademark Office.

The problems in other nations extend from Brazil’s failure to issue patents for commercially significant inventions by US inventors, to an almost-complete piracy-based economy in Brunei, to an only-modest drop in the rate of Russian piracy from 65 percent to 58 percent.

The attachés, speaking at an event organised by the US Chamber of Commerce and its recently beefed-up Global Intellectual Property Center (GIPC), blasted the record of familiar intellectual property trouble zones like Brunei, Thailand and Russia.

But the problems extend to the attitudes and omissions of major trading partners like Brazil, India and even well-developed European nations, said the attachés.

[more at….]

Mike Palage, the first Adjunct Fellow at PFF’s Center for Internet Freedom, just published the following piece on the PFF blog.

ICANN‘s plan to begin accepting applications for new generic top-level domains (gTLDs) in mid-2009 may have been derailed by last week’s outpouring of opposition from the global business community and the United States Government (USG). Having been involved with ICANN for over a decade and having served on its Board for three years, I’ve never seen such strong and broad opposition to one of ICANN’s proposals.

This past June, the ICANN Board directed its staff to draft implementation guidelines based upon the policy recommendations of the Generic Names Supporting Organization (GNSO) that ICANN should allow more gTLDs such as .cars to supplement existing gTLDs such as .com. In late October, the ICANN staff released a draft Applicant Guidebook detailing its proposal. The initial public forum on this proposal closed on December 15-with over 200 comments filed online.

In its December 18 comments, the USG questioned whether ICANN had adequately addressed the “threshold question of whether the consumer benefits outweigh the potential costs.” This stinging rebuke from the Commerce Department merely confirms the consensus among the 200+ commenters on ICANN’s proposal: ICANN needs to do more than merely rethinking its aggressive time-line for implementing its gTLD proposal or tweaking the mechanics of the proposal on the edges. Instead, ICANN needs to go back to the drawing board and propose a process that results in a responsible expansion of the name space, not merely a duplication of it.

Continue reading →

The intrepid Chris Soghoian has turned up an important wrinkle in Google’s services. Google pulled his AdWords ad pointing out AT&T’s campaign contributions to an Indiana politician after AT&T lodged a trademark complaint about it.

Trademark law is for preventing confusion about the source of goods and services. There is no possibility that Chris’ ad would confuse consumers in this way. He’s not providing telecommunications services, and his ad didn’t suggest it. Chris’ use of “AT&T” did not violate AT&T’s trademarks.

The subject matter of Chris’ ad is an important part of our national discourse, and something people should be able to run ads about on a platform like Google. It would be, well, evil, to kick small public policy advocates to the curb in favor of big corporations.

A company like Google is in a tough spot, of course, trying to adjudicate trademark claims at scale. But it is not acceptable to treat trademark complaints as proven just for having been submitted.

Google should take some steps to make its process more fair, such as by allowing advertisers to respond to a trademark complaint before Google acts on it. Much of the process could be automated, and it could explain to both sides what trademark rights include – and what they don’t. If after a few automated steps, the two remained at loggerheads, Google employees could take a look to see whether the claim or the response were meritorious. (A trained monkey could have determined that Chris’ ad is not a trademark violation.)

In close cases, Google should leave it to the parties to resolve, while it works in the courts to generate a substantive body of law that service providers in the position of Google are not properly liable for the trademark infringements of users. (My brief pitch for common law findings of “no liability” in such situations – as opposed to statutory protections like CDA section 230 – starts at minute 22 of this video.)

Would these ideas increase Google’s cost and potential liability? Yes, some. But Google should embrace those costs as it educates its users, employees, courts, and – most important – trademark holders about what trademark does and does not do.

Kudos to Chris for his tenacity. Google, fix this.

[The following post discusses a matter of public interest and people who have brought public attention upon themselves. It contains only expressions of opinion and recitations of facts that I believe in good faith to be true. It should be clear, and I urge you to be clear, that the only service provider discussed in the post, involved in authoring the post, or involved in publishing the post is the law firm Jones Day and its attorneys. Let there be no confusing that this is all about Jones Day. Since it’s a post critical of Jones Day, there should be no implication to anyone that Jones Day could possibly endorse the content of this post or this blog. I say all this so that any nitwit attorney who thinks this blog post gives him or her a cause of action will be on notice that nothing said here violates trademark law, everything here is protected speech under the First Amendment, and that no cause of action can possibly lie against any person for this publication.]

It’s fascinating sometimes to see lawyers with an abundance of power and no sense of judgment – especially big-firm lawyers who shouldn’t exhibit their poor judgment and ignorance of basic legal doctrine to current and prospective clients.

But the law firm of Jones Day has some lawyers working for it who really don’t seem to have a clue about trademark law. I never practiced trademark law, and I seem to know more about it than they do.

The case is well described on the Citizen Media Law Project Web site.
Continue reading →

As I said in my last post, Lindberg uses a number of computer metaphors to explain legal concepts. Here’s one I thought was particularly clever:

The shortcut in Figure 5-1 [a screenshot of the Firefox shortcut on a Windows desktop] is not the Firefox web browser itself. Rather, this icon is associated with a shortcut, or link. It points to the real executable file, which is located somewhere else on the disk. Without the linked application, the shortcut has no purpose. In fact, in Windows, a shortcut without a properly linked application reverts to a generic icon. It is the linked aplication that gives the shortcut both its appearance and its meaning.

Like the shortcut icon, a trademark is a symbol that is linked in the mind of consumers with a real company or with real products and services. WIthout the association of the symbol with the real product, service, or company, the symbols that we currently recognize as trademarks would be nothing but small, unrelated bits of art. The purpose of the trademark is to be a pointer to the larger “real” entity that the trademark represents. It is the larger entity that defines the trademark and gives it form and meaning.