What is trademark bidding?
Trademark bidding is a practice of targeting paid search advertisements to branded keywords. The term ‘bidding’ here refers to the use of trademarks as keywords within an ad copy, and where more than one company wishes to use it as a keyword, the higher the payment given to that keyword, the higher up their ads will appear on the search engine results. Since branded keywords are the most valuable and highest converting search traffic, they are tempting targets for partners, competitors, and third parties to run ads on. It is important to understand when trademark bidding will and will not result in trademark infringement and how brand owners can protect their brand assets on search engines.
How can trademark bidding harm your brand?
When a customer searches for your brand, they have already chosen your brand among a million others and are very likely to buy something. Especially strong brand names easily convert search engine traffic into sales. Competitors, direct rivals, copycats or even your affiliate partners might exploit this strength and cause significant financial damage to you as a brand owner. Research conducted by BrandVerity indicates that trademark bidding takes at least 180 million clicks away from brands every year. That means 180 million clicks that were supposed to go directly to brands were diverted elsewhere. Brand bidding trademark infringement decreases the value of the trademark as competitors are capitalizing on the brand to divert traffic to their sites and subsequently increase sales.
Is trademark bidding always trademark infringement?
Brand bidding does not necessarily mean trademark infringement. Unauthorized use of a trademark is only infringing if the particular use causes likely confusion among consumers. The most common type of confusion is confusion over a source, which usually occurs at the time of purchase, but confusion can also arise as to the impression of affiliation or connection. The European Court has not prohibited this practice, but it has set limitations, which companies need to adhere to when looking at brand bidding as an opportunity to increase traffic.
The ad in the search engine has to make it clear that only the third party’s brand name is used and it is not the company the user searched for. This means that users must be able to easily distinguish the company which placed the ad from the original company the user searched with the specific keyword. This also applies to any confusion concerning the website or landing page linked to the ad. In other words, brand names in URLs.
The brand name that was bid on may not occur in the actual ad copy. The brand name bid must therefore only be seen in the headline of the ad and must be clearly distinguished from the ad copy.
How to prevent competitors from using your trademark on search engines?
Verify trademark infringement
Before you take any action, you need to talk to an experienced trademark attorney to confirm what you have ownership over and to verify what you are legally allowed to do.
Trademark registration protects against both identical and similar brands, providing the owner of the registered trademark with the legal rights to issue cease & desist letters to running businesses and prevent them from further infringing on your brand.
Contact competing advertisers
If a trademark owner is concerned that their trademark is being used improperly in the ad text, the owner should first contact the advertiser directly to address the issue. Google and Microsoft encourage trademark owners to engage directly with advertisers who they believe are misusing their trademarks prior to submitting a complaint. This can be done in the form of a Notice Email outlining the issue to the infringing company. The notice should also include that this is a violation of Google’s advertising conditions.
Report trademark violation
If the issue remains, your next step is to go directly to the search engine support and report the violation. The search engines have slightly different specifications in terms of which ads are eligible for takedown. Google’s policies vary by region, whereas Bing and Yahoo’s don’t. You can get familiar with trademark rules for Google, Bing and Yahoo through Google Adwords Trademark Policy and Bing Trademark Policy
Generally, Google and Microsoft allow for the fair use of trademarks in ads text, such as:
Use of a trademark by a reseller of authentic goods or services
Informational websites about goods or services represented by the trademark, such as product reviews
Ordinary dictionary uses of a term
In cases where Ads infringe upon Intellectual Property (IP) rights of others through an unauthorized use of registered logos, trademarks, or other copyrighted material, necessary steps will be taken to restrict such ads. Once you have confirmed the trademark violation, you can report it by filling the Intellectual property concern form through Google or Bing.