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Are Web-savvy Competitors Redirecting Your Customers?

The Internet can be a phenomenal marketing tool for your business. But it's also a tool for competitors who may—unbeknownst to you—be using your trademarks to draw customers to their own Web sites.

Most Internet users are happy to enter a word into a search engine such as Yahoo or Google to access information, but few understand how the Internet really works.

Yet for companies trying to protect their trademarks and intellectual property online—and for those who want to avoid being sued for trademark infringement—understanding how search engines work is an important first step.

Most search engines, including Google, use "crawler" software that "visits" a Web site and reads the site's actual content, as well as its "meta tags."

A meta tag is very much part of the Web site, although it is not visible on the site itself. Meta tags include words that represent the site's content, plus information about the site's creator as well as how frequently the site is updated.

After visiting a Web site and exploring its links, the crawler software brings all of that data, including a site's meta tags, to a central depository where the site is indexed. Later, when a user types in a search term, the engine matches the term to the despository's information index to find relevant results.

So, for example, a Web site operator for a fictitious company "Atlanta Jewelry" may use "jewellery" as a meta tag on its site, knowing that some jewelry-seeking Atlanta consumers might type "jewellery Atlanta" instead of "jewelry Atlanta" into a search engine.

Therefore, even though the word "jewellery" does not appear on the actual Web site for Atlanta Jewelry, the company's site will appear on a search results page anyway.

Being what they are—creative—marketers are now using meta tags and other strategies to direct consumers surfing the Web to their company's Web pages. As the following fictional account shows, such methods are not appreciated by the competition.

Grabbing Some of the 'Dazzle'

Imagine this: Your jewelry company, "Dazzle, Inc.," has energetically promoted its brand to drive consumer traffic to its Web site, Dazzle.net. When users type "Dazzle" into a search engine, Dazzle.net appears near the top of the results list. But PrettyThingsRUs.com, a competitor's site, is prominently displayed on the same list, and its ad appears in the "sponsored links" section on the right-hand side of the page.

Clearly, Dazzle fans could easily be diverted to the site of its competitor.

Such scenarios are not imaginary—they're real—and they occur every day as the result of two fairly common Internet-marketing techniques.

The first technique: PrettyThingsRUs places a Dazzle trademark on several pages of its Web site, either in the actual text or as a meta tag. This causes the link to the PrettyThings Web site to appear on the results page whenever a consumer searches for Dazzle.

Consumers seeking Dazzle's site could easily end up clicking on PrettyThings RUs.com, and never even get to Dazzle.

The second technique requires that PrettyThings purchase a Dazzle trademark as a keyword, or what Google calls an "AdWord." Buying a keyword from a search engine such as Yahoo or Google will cause the PrettyThings Web site to be displayed as a sponsored link when a consumer searches for Dazzle. Since many consumers do not distinguish between the sponsored link ads and the natural search results that appear on the left, some confusion—and the redirection of some consumer traffic—is inevitable.

When an advertiser buys a keyword, search engine companies do not investigate whether there are trademark implications. Nor do they require that advertisers remove the trademarks of others from their keyword lists.

Legal Consequences?

Naturally, many companies have objected to the online use of their trademarks by competitors, but courts have issued various verdicts in such cases.

Generally, if the trademark itself is visible in the text of a competitor's ad or on its Web site, courts are more likely to allow a company to claim that it is a violation of the federal Lanham Act, which governs trademark use. If the trademark is used as a meta tag, but is not visible on the browser and thus cannot be seen by the consumer, the courts are divided on whether or not that constitutes trademark infringement.

This means that there is some legal risk in using a competitor's trademark to divert shoppers. Even though the law is unclear, companies should review their online marketing strategies, remove competitors' trademarks from their Web sites (and meta tags), and ask search engine companies to delete trademarks of rivals from their keyword lists.

Protect Your Trademark

Every company is at risk of having its trademark used as a meta tag, used as actual text on a Web page or purchased as a keyword. While litigation is always an option in trademark infringement cases, it can be more practical—and less expensive—to recognize the risk upfront, and then find effective measures to guard your intellectual property. Here are some helpful steps:

• Search-monitoring services can be retained to monitor keyword usage on search engines, such as Google and Yahoo. Such services provide information on whether or not your trademark is being used as a keyword—and, if so, by whom.

• Google has instituted an AdWords trademark complaint procedure. A company can submit a list of protected trademarks and Google will require a competitor to remove those trademarks from the visible text of its ads. Google will also prevent future applicants from using the protected trademark in an ad without the trademark holder's authorization.

• Companies can agree not to bid on each other's trademarks as keywords. Be aware, however, that in certain circumstances, agreements among competitors raise antitrust concerns.

• Companies can bid on their own trademarks to keep competitors from doing so. Protecting your trademark and avoiding the legal consequences of overly aggressive cyber-marketing require an understanding of search engines and of important intellectual property rights. Protect your legal interests by being compliant—and attentive.

Suzan R. Flamm, Esq. is assistant general counsel of the Jewelers Vigilance Committee, which provides general educational resources and jeweler-specific advice. The advice is strictly the opinion of the JVC. Visit JVCLegal.org for important legal compliance information pertaining to the manufacture, sale and marketing of fine jewelry.

Source: National Jeweler