Search Engines Under Siege: Do Paid Placement Listings Infringe Trademarks?

Abstract

Consider the following scenario: your client is the purveyor of a soft drink called Gnucola. The Gnucola company has used your law firm to register the Gnucola mark with the United States Patent and Trademark Office, and has also used your law firm to assist it in obtaining the registration of several Internet domain names including the term Gnucola. Your client has built an Internet website at these domains from whence it promotes and sells its flavorful amber beverage. Gnucola's customer base is rapidly expanding and its revenues are strong.

One day, during an idle minute, the president of Gnucola searches for gnucola on a popular Internet search engine, E-Pointer. She finds, much to her surprise and chagrin, that the website for the archrival "MicroCola" is returned on the first page of results. The Gnucola website, on the other hand, is nowhere to be seen. It can only be found after clicking through several pages of results. The Gnucola president calls you for an explanation.

You call the EPointer company, only to have a sales representative politely inform you that if you had paid attention to the fine print on its site, you would have seen that E-Pointer is a paid placement search engine. MicroCola has paid a substantial sum to appear prominently in the listings under the term Gnucola. If Gnucola would like to appear on the first page of listings, E-Pointer tells you, it needs to pay for placement. You convey this to your client, who is outraged. She wants to know: Can Gnucola prevail against E-Pointer and MicroCola on a claim of trademark infringement?

Keywords: paid placement, trademarks, search engines, cyberlaw, intellectual property

JEL Classification: O3, O34, K1, K12