Lawsuit Over Paid Placements to Define Search Engines, Part 1

A new chapter in search engine law was opened last week, when Mark Nutritionals filed lawsuits against AltaVista, FindWhat.com, Kanoodle.com, and Overture, seeking $440 million in damages for alleged trademark infringement and unfair competition.

The four search engines named all have paid-placement listings that appear when searches are conducted for the term “body solutions.” Body Solutions is also the name of a weight-loss program made by Mark Nutritionals. The company believes the ads are misleading consumers and infringing its trademark on the Body Solutions name.

“Because of the pay-for-placement practice, the Body Solutions site gets buried in the search engines,” said J.D. Pauerstein of Loeffler, Jonas & Tuggey, one of the two firms representing Mark Nutritionals in the case.

The message seems to be: “Don’t bury our site, and you won’t get sued over ads.” It’s a message aptly illustrated by comparing the fate of Google to AltaVista on this issue.

When the suit was filed, Google had several paid ads linked to the term “body solutions” on its results page. However, the Body Solutions Web site was also the first site listed in Google’s editorial results. AltaVista had several ads linked to “body solutions” as well, but the Body Solutions site did not appear on the first page of results. Google escaped being named in a suit, while AltaVista did not.

“Certainly, it is less-troubling conduct when our Web site comes up first,” Pauerstein said.

Bad Results Equal Legal Liability?

Clearly, any search engine worth its salt should return the Body Solutions Web site in the top results in a search on that term. That’s a reasonable expectation many people would have. The product is well known in the United States, and, though many other things could be relevant for “body solutions,” this is an obvious top choice you would expect to be included.

But is failure to include the site in the top results trademark infringement if ads appear? We don’t know. The famous Playboy-Excite/Netscape banner ad case provides some guidance but not all the answers.

In that case, Playboy filed suit against Excite and Netscape for running keyword-linked banner ads that appeared for terms such as “playboy” and “playmate.” The court rejected the notion that ads were infringing Playboy’s trademarks. Playboy is currently appealing the case.

It would have been terrible for the court to have favored Playboy’s argument, something I believed so strongly that I eventually became an expert witness in the case on behalf of Excite and Netscape.

Think about it. Had Playboy succeeded, anyone who wanted to sell old back issues of Playboy magazines (and there’s apparently quite a market) would have been unable to advertise them on search engines using the term “playboy.” Any anti-porn organization opposed to Playboy would have been unable to run ads spreading its views. Playboy would have locked out a variety of legitimate reasons someone might want to have an ad appear when searches for “playboy” were conducted.

Victory in that case also would have put a huge burden on search engines. Any word can be a trademark. “Orange” is the name of a mobile phone company in the U.K., and “Apple” is the name of a small computer company some people may have heard of. Can searches for these words carry ads without the permission of Orange or Apple? Do search engines need to conduct a trademark search any time they sell an ad, then ask the trademark holder to determine if the proposed ad is acceptable? And how do you do this for all the trademarks that are unregistered in the United States but still entitled to trademark protection?

“Findability” of Trademark Holder May Be Key

In the Mark Nutritionals case, it is keyword-linked text ads, not banner ads, that are at issue. However, the more important difference involves the argument over how easy it is for consumers to find the Body Solutions Web site.

In the Playboy case, it was difficult to show that people were somehow being diverted against their will from Excite and Netscape via the banner ads. On the search results pages carrying these ads, numerous links leading to Playboy-owned sites also appeared. Consumers weren’t being prevented from getting to Playboy if that’s what they wanted. They had ample opportunity to find it.

In contrast, Body Solutions may have an easier time arguing that its “unfindability” is due to ads. At AltaVista, FindWhat.com, and Kanoodle.com, on the day the suits were filed, the Body Solutions Web site did not appear on the first page of results, while the many ads did. At Overture, the Body Solutions Web site was listed, but apparently ranking it 13th behind ad placements wasn’t good enough to prevent Overture from getting sued.

Given this, the Body Solutions case is really going to focus on what appears on a search engine’s results page. Must something that calls itself a “search engine” provide trademark holders with some degree of visibility, regardless of payment, if they also carry ads for searches involving those trademarks?

To defend themselves, expect the pure-paid placement search engines to trot out the trusty “Yellow Pages” analogy. They’ll say that you don’t get a free ad in the Yellow Pages, and that’s legal, so why would you expect free ads from us?

Of course, none of these players describes themselves as Yellow Pages to consumers. FindWhat.com and Kanoodle.com make plenty of references to themselves as search engines on their sites, though the fact that results are bid upon is also mentioned. Overture describes itself as an ad-distribution network, and rightfully so, given that most people encounter its listings at other search engines rather than at the Overture site itself. Nevertheless, Overture still maintains a site that seems like a search engine.

How the site appears is important, because you can bet the Body Solutions side will argue that when consumers go to something that looks like a search engine, they expect to get answers, regardless of payment. They do not assume they are using Yellow Pages. Anything that looks like a search engine, acts like a search engine, yet mainly focuses on delivering ads is misleading those consumers, they’ll argue.

“The point is that they tout themselves as search engines, but, actually, they have become mere advertisers. They should disclose to consumers what is paid advertising and what are true search results,” said Susan Smith, a lawyer for Kenyon & Kenyon, the other firm representing Mark Nutritionals.

That’s all we have time for this week. Next time we’ll take a look at what separates AltaVista from the rest of the companies named in the lawsuit and examine the particular ads that Mark Nutritionals found so objectionable.

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