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EBay clamps down on use of its name

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Stefanie Olsen CNET News

Published: 11 Aug 2003 11:55 BST

Auction giant eBay has moved to block Google advertisers from using its trademark in sponsored search results that appear on Google and across the Web.

In the past month, eBay sent a letter to Google requesting it to refuse to sell search-related ads that use eBay's trademarked name, including variations and phrases.

According to company spokesman Kevin Pursglove, eBay requested the action "so that third-party advertisers do not abuse the intellectual property of the company."

Google, which declined to comment for this story, lets advertisers bid for placement in "sponsored" areas of search-result listings, pairing ads with listings generated by relevant keywords. As a service to trademark owners, Google will let companies claim "reasonable" rights to their own names/keywords so that rivals can't encroach on their trademarks. eBay took advantage of this, asking in a 13-page list that Google bar the use of terms such as "eBay selling," "eBay power seller" and "eBay management software."

That didn't sit well with John Coera, owner of a site that sells eBay management software and who's been a Google keyword advertiser since late April.

"How do you say that you repair Volkswagens without saying Volkswagen? They're stifling competition, going beyond the trademark law and into antitrust violations," said Coera, who sent a letter to the US Department of Justice about the matter.

His complaint highlights a murky area of trademark law related to search engine marketing that's become a growing area of concern among major brand advertisers.

Search-related advertising has become a key moneymaker for sites such as Yahoo and Google because it's effective for marketers. They can reach Web surfers while they're searching and pay only when people click on their links. The system works so well that some marketers bid for keywords related to rival brands to prey on their traffic. Because more companies are taking notice of the importance of search marketing, more complaints are flying.

"This has become an epidemic in the last year," said Catherine Seda, president of Seda Communication, a search engine marketing agency. "Big trademark owners are finally waking up to realise that they need to manage their search engine marketing and make sure they control their names."

Still, the law is unclear about the responsibility of search engines to police trademarks in paid search. Google says in its terms and conditions that advertisers themselves "are responsible for the keywords and ad text that they choose to use." But if asked, Google will perform a limited investigation. Overture's policy is similar, often giving favour to major advertisers, according to Seda.

Questions also remain about a search providers' responsibility to give trademark holders visibility in search results based on keywords related to their trademarked terms, regardless of payment. Last year, Mark Nutritionals filed lawsuits against Overture, AltaVista, FindWhat and Kanoodle for alleged trademark infringement and unfair competition, suits that could help define laws in this area. Mark charges that the search companies used keywords related to its trademarked name Body Solutions but buried Mark's own links. The company is seeking $440m (£273m) in damages.

Danny Sullivan, editor of industry newsletter Search Engine Watch, said many advertisers are simply realising that they may have to bid against rivals for their own name -- with potentially greater costs. But, he said, these trademark claims can go overboard for competitive reasons. "eBay could be using it to block things they don't like, like eBay-listing software."

Still, trademark owners may be seeking rights to keyword ads, because if they don't, their rights could languish, according to copyright law. Companies risk losing their trademarks if the terms become a part of common usage, and they can't show they've tried to contest it. In one high-profile case in Austria, Sony lost the right to its Walkman trademark in 1994 after it failed to seek a retraction from a dictionary publisher that defined the term generically as a portable cassette player.

Coera says what's good for the goose isn't good for the gander as far as eBay is concerned. eBay advertises with Google using trademarked terms such as "Barbie" and "Nike."

Also, eBay recently introduced a keyword advertising programme within its own network, which lets eBay sellers promote their goods on related pages. Pursglove said the timing of its keyword advertising has nothing to do with its Google legal action. Rather, it acted on a service that Google offers, he said, and the company sought to protect its name.

Coera said: "But if you couldn't use any brand names on eBay, they'd be out of business."