Google's green light allowing brands to bid on competitive trade marks was one of the big stories in UK search over the past six months. We've conducted research at Harvest Digital that suggests that the result has not been the free-for-all that some predicted. In fact many big brands are not even bidding on their own brand, let alone competitors.
Why is this? Normally people would cite two reasons: that brands have entered into 'gentleman's agreements' not to bid on each other's brands, and that Google's relevancy rules simply make it uncompetitive to bid on other brands.
But a third reason is that the legal position in the UK is still somewhat unclear. The precedent set in the "Mr Spicy" case said that it was OK for search engines to accept advertisements triggered by a brand term. But UK lawyers believe - and are telling their clients - that one brand could still be sued directly by another for trademark bidding.
For instance, Iain Connor - an Intellectual Property Law specialist at Pinsent Masons - thinks that UK law forbids the practice of triggering adverts with another person's trade mark:
"In the UK, we believe that where a search engine allows a trade mark to be used as an trigger to generate a competitor's sponsored link, that would amount to an infringement by the search engine of the trade mark. Such use is likely to affect the essential function of a trade mark and take unfair advantage of that mark."
Mike, your comments are interesting. The 'Wild West' we feared dissapated quite quickly as smart advertisers realise the legal implications and the potential negative impact on their quality score due to irrelevant bidding.
One has to be careful on those 'Gentleman's Agreements' - I am sure we have both seen the letters that were sent from some brands seeking such an agreement. the IPA has defined such agreements as cartel like operating [price fixing] which is illegal.
I think in the UK it is now more of an annoyance than a significant business threat.
Did you see this story about Interflora suing M&S for bidding on its trademark:
http://www.theregister.co.uk/2008/12/04/interflora_google_keywords/