PPCSearch and the Law: Attorney Deborah Wilcox

Search and the Law: Attorney Deborah Wilcox

As part of a series looking at Internet and intellectual property law, Deborah Wilcox, co-chair of a national intellectual property litigation practice, discusses changes in attitudes toward online intellectual property, the challenges courts face in litigating online IP and trademark cases, and consumer confusion over search ads.

As part of a series looking at Internet and intellectual property law, we spoke with Deborah A. Wilcox, co-chair of Baker Hostetler’s national intellectual property litigation practice, which includes managing and litigating copyright, trademark, and e-commerce and domain name issues in both in the U.S. and internationally. Wilcox discusses changes in attitudes toward online intellectual property, the challenges courts face in litigating online IP and trademark cases, and consumer confusion over search ads.

Deborah WilcoxWilcox has been the longest-running legal speaker at Search Engine Strategies’ conferences, ever since its first legal sessions were introduced back in 2002. She teaches continuing legal education courses to lawyers, and writes a monthly column on “Character Licensing” for The Licensing Journal and a bi-monthly article for Wisconsin Technology News called “IP Online.” Wilcox received her JD with distinction from the University of Wisconsin, and has served as an adjunct professor at Case Western Reserve University Law School, teaching Trademarks.

A special report on search legal issues from Search Engine Strategies in San Jose, CA August 20 – 23.

I spoke with Ms. Wilcox following her recent session at SES San Jose in August.

What do you feel have been the biggest areas for growth in the search industry in regards to the legal issues? And conversely, where has it been stagnant?

It really seemed at the time, back then, that the sky was the limit in terms of intellectual property in regards to others. The mentality back then was that if there was something available out on the Internet in any way, shape or form, it could be used by anyone else for whatever purposes. It really didn’t seem that people had a fundamental understanding of where trademark and copyright laws might come into play.

Over the years we have seen changes, since people have challenged the practices that were occurring. Something as simple as taking copyrighted text and putting it white-on-white on a different page without authorization of the copyright owner – people now know was clearly a copyright violation, in addition to what was then termed as spamming the search engines. But a lot of people back then thought that was OK initially, or didn’t stop to think about the legal ramifications.

In other ways, the law has developed in regards to keyword purchases and meta tags, although the law is still in flux, at least there are cases where the issue has been brought to light. We have a little more application of the law of copyrights and trademarks now than we did going back 5 or 6 years ago.

But in the same respect, there are very few clear, legal decisions on some of these boundaries, because the technology keeps changing so fast, and it takes years for these court cases to wind their ways through the system to get to opinions that are published for people’s review and understand what the precedent is.

So I would say that we both have growth, and not enough growth in the copyright and trademark area with respect to some off these boundaries of the law.

Back at the first legal session in 2002, I remember there being a panelist from the Federal Trade Commission (FTC) dealing with the issue of consumer confusion in keyword advertising. How did the federal government get to be involved in the issue?

It was Ralph Nader’s commission which had written a letter to the FTC, complaining about how search engines were not properly identifying sponsored links as such, and that people didn’t understand that they were advertisements. The FTC took a look at it, and said that if the Web site said that they were sponsored links or sponsored results, and that they were set aside from the organic results, then it would be acceptable to the FTC, at least in the formatting. So consumers would hopefully be able to understand that these were advertisements, and the FTC took no further action. So that was a model that Google and Yahoo ended up using for their search results pages.

I remember at that time that MSN was using the moniker “featured links,” and that had even some search marketers confused. Do you think that there’s considerably less consumer confusion today with search and search advertising, or does it still persist on a level that can cause more legal problems?

That’s the very issue that the courts are struggling with across the country. The law is designed to protect consumers from confusion. Take the case with trademarks search ads – if there’s a likelihood of consumer confusion being caused by the particular use, then there is a possibility of a trademark infringement. Then the experts need to be brought in to determine what reactions consumers will likely have. Are consumers thinking that they are looking at something that is sponsored by or affiliated with the authorized trademark owner, and thus a likelihood of consumer confusion that would be involved in an infringement of trademark use?

Some of the experts (and I am aware of a couple of studies that have been done), are saying that the consumer confusion rate is from 25 to 30 percent of the people that they’ve interviewed. Under trademark law, that is a significant number. Surveys and experts are always open to attack, of course, and this is what litigators deal with on a regular basis in any case that involves a survey and an expert.

So it’s not clear what really is going on. I think it depends on the particular ads, what they say, and the trademark that’s used. You have to look at it on a case by case basis, and try and determine if a particular trademark with a particular display of the ad at issue is likely to cause consumer confusion. The jury is still out on that.

I understand a couple of individual states are making their own legislation on this issue?

Some states, like Utah, have enacted this law, that buying a trademark that’s someone’s keyword, and selling the keyword, is unlawful in their state. So then the question becomes, is that an enforceable law, since the states don’t have a right to infringe on interstate commerce? Most authorities in this area believe that the Utah law is unconstitutional and will not be capable of being enforced. Right now there are no regulations to implement the law, and it’s on hold.

So some states are trying to deal with it on their own, but it will likely not work because it’s a federal issue that Congress needs to deal with. But it’s also showing that it’s an issue having considerable attention with state legislatures.

Is there the potential for a search industry case to reach the Supreme Court?

There are cases that have differences of opinion based on very similar facts. But by the time a case could reach the Supreme Court, it could be 5 years, and things will have changed [in the search industry”.

At your panel, the legal counsel representing Ask.com suggested that they are protected from lawsuits because they don’t sell keywords, they sell ad space. What’s your opinion of that?

My personal opinion on that, without looking at it on behalf of any particular client of mine, is that it’s a pretty good analogy. One of the issues the courts are struggling with is, is there a trademark infringement if that trademark simply appears on an ad results page when a user types in a certain term, and the ad doesn’t refer to that term? Is there any real trademark use happening? Is the consumer going to think that there’s a connection there when the trademark doesn’t even appear in the ad?

So it is a good analogy that the search engines are selling ad space, but what triggers the ad, of course, is the particular purchase of a trademarked keyword. So even though it’s not a bad analogy, some courts will reject that analogy and say it’s still tied to a particular trademark, that people are still making use of a particular trademark in commerce, because the whole idea is to put an ad out there that will draw people to the site and hopefully buy things. And isn’t that commercial use tied to that trademark? So that’s the other big debate that’s going on in the courts.

There clearly is some value of having those advertisements in front of people who are doing those searches. If the ads weren’t being clicked on, people would stop buying them. And there are some valid business reasons for having trademarks in the ad copy. For example, doing research information, looking for information on competitors, or just general questions on the trademark and they couldn’t figure out what they were, etc. Playing devil’s advocate, we don’t know what people are looking for when they type in something, and who’s to say that the person is looking for just one particular site, and that has the be the authorized trademark owner’s site?

On the other side of the coin, some advertisers are disgruntled that most of the major search engines no longer allow the use of trademarked terms in keyword ad copy, even for fair use purposes.

Under the general law that’s been developed for comparative advertising, you would have the right to use someone else’s trademark anywhere in your advertising, or anywhere on your Web site. So why can’t you also buy that keyword and display an ad that specifically references that comparison?

Give us some predictions (not to be used for legal advice): What do you believe is the biggest legal issue right now relating to the search industry and search marketers, and where do you see that heading?

There are a couple of related ones. Paid advertising is where it’s at. Is it fair for the search engines to be making billions of dollars off of other people’s trademarks? I think the search engines will continue to refine their policies, and we’ll see more challenges to their policies, and maybe the FTC might even get involved again (if consumers still confuse the sponsored links as part of the organic results).

And on a related issue is click fraud, always a hot topic at SES. There’s a lot of money being paid for advertising, and prices are going up because of the click fraud, and what more can be done [to prevent or limit it”? And technology has to be the answer to that. Because there’s so much money involved, you’ll see more litigation to sort through these issues.

Another issue that I think is involved is content-related, where people are sending out their RSS feeds with links and optimized as such, and other people are taking that content and stripping out the links, and putting their own links in. People are starting to understand what’s going on with that and why it might be copyright infringement. You want your content to get out there, but you want it to get out there the way you sent it out, and you don’t want people to change it.

I haven’t seen it in the cases yet, because it takes a lot of financial wherewithal to challenge these types of practices, and the main thing is you first want to get these people to stop, which you can usually accomplish with a cease-and-desist letter. You only really see some of these bigger companies bringing these lawsuits that will lead to some kind of legal precedent on what people can do with copyrighted content.

Speaking of bigger companies, there’s the Viacom lawsuit with Google. Is Google really acquiescing to the big company challenge?

It’s a good question. Google’s response, and it’s a good one, is that Google can’t monitor everything that’s going on, and that the users are responsible for submitting content that isn’t a copyright violation. When they get a notice from a copyright owner that there is an infringing video up, then Google takes it down. That’s what the law requires, and that also protects the ISP who is hosting the site, if they follow that same policy of taking down material once they’ve received notice.

So Viacom, and many others that have joined in the lawsuit since it has become a class-action lawsuit and these are now all consolidated cases, are saying that Google should be more proactive, such as being able to figure it out ahead of time (before the content goes live on their sites). [Content owners want to know” why do we have to find hundreds of cases of infringement and send out a specific notice every time before you will even do anything?

It could really be stretching the law that someone in a position like Google/YouTube really has to do more, other than follow existing procedures for takedown. I still think what will happen is that the fingerprinting technology will develop and be tested (which is already being done with Walt Disney), and seeing how the system works.

You can use technology to more quickly determine what’s out there, and also block it from being uploaded. I think the technology will catch up, and a lawsuit will spur on the engineers to develop and expedite this. I don’t think we’ll see a decision in the case; it will probably settle because all of the dynamics involved.

Grant Crowell is the CEO and creative director for Grantastic Designs, and a contributor to Search Engine Watch’s Vertical Search column, focusing on video search topics. Grant also serves as a video production and optimization consultant, and produces documentary video content for Walking Eagle Productions.

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