Court Rules Competitor Must Use ‘negative keywords’

30 Apr

 Orion Bancorp of Florida recently won a  court case  in which it received a competitor’s domain (not new) but also that if its competitor, Orion Residential Finance, ever engages in paid search advertising, it must include  negative keyword-Orion in all campaigns (very new).

This might be the first court case that mandated negative keyword parameters in a ruling. It looks like deep pocket, litigious companies now have an additional weapon with which to bludgeon its competition.

From Ars technica:

” Orion Bancorp took its rival to court, arguing that the name was confusingly similar to its own. Orion Residential Finance apparently sent a lawyer to court but never filed a response of its own, and the judge eventually issued a default judgment against it. The judgment contained the usual prohibitions on using the name “Orion” in signs, promotional materials, and slogans, but it also included domain names and online advertising.

The judge prevented Orion Residential from “purchasing or using any form of advertising including keywords or ‘adwords’ in internet advertising containing any mark incorporating Plaintiff’s Mark, or any confusingly similar mark, and shall, when purchasing internet advertising using keywords, adwords or the like, require the activation of the term ‘ORION’ as negative keywords or negative adwords in any internet advertising purchased or used.”

The “negative keyword” ruling means that Orion Residential advertising would be explicitly prevented from showing up after searches for the term “Orion,” but could appear for any other keyword searches.

 The decision was handed down at the end of last month but recently noted by technology lawyer Thomas O’Toole. O’Toole points out that the judge’s decision goes far beyond what a company would be able to get simply by pursuing a domain name dispute and sees it as a “good example of the sweeping relief possible when the defendant defaults in an online trademark infringement case.”

Law professor Eric Goldman expects to see more such requests in these kinds of cases, saying, “I think it’s a logical addition to any injunctive relief request in a trademark infringement case.”

Companies, judges, and regulators alike have grown increasingly aware of the power of online advertising and the ways that it works, and in large portions of the world, this means that people have become increasingly aware of Google. (In this case, the judge repeatedly refers to “adwords,” for instance.) But as online advertising increases in importance, Google’s ad practices—such as allowing companies to take out keyword ads on competitors’ names—have come under scrutiny.

Australian regulators expressed discomfort with the practice last year and accused Google of “misleading and deceptive conduct” in the way it sold and displayed its ads. Just this month, a US appeals court considered the case of Rescuecom, a company that also sued Google over its keyword searches. And last year, the Utah legislature passed legislation prohibiting search engines from serving ads linked to trademarked search terms to Utah residents. The legislation provoked so much controversy that last month the Utah legislature reversed course and repealed the most controversial portions of the law.

If judges show a willingness to shut down this sort of keyword advertising in particular situations, we might see legal action in this area shift towards cases between the parties involved in disputes, rather than attempts to force change upon Google. Search Engine Watch calls the judge’s decision in the Orion case a “dangerous precedent,” but it could prove a popular one for companies that want to play hardball with rivals. “

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