Lawsuit Over Paid Placements to Define Search Engines, Part 2

A few weeks ago, AltaVista, FindWhat, Kanoodle, and Overture were slapped with a lawsuit filed by weight-loss product maker Mark Nutritionals, and the case has implications for the entire search engine industry. The company alleges trademark infringement and unfair competition because the search engines have paid placements that come up when searches are conducted for “body solutions” — the name of a weight-loss product that Mark Nutritionals has trademarked.

In my last article, I looked at existing case law, as established in a suit filed by Playboy, and outlined the basic issues involved. This week, we’ll delve further into the topic.

One of These Things Is Not Like the Others: AltaVista

AltaVista is different from the others named in the suits. In contrast to them, AltaVista always provides some substantial “editorial style” results in response to a search. AltaVista has also always filled the role of being an information resource rather than aiming to be a pure ad engine.

Body Solutions didn’t fail to come up in the top results at AltaVista because of some conspiracy to mislead consumers and drive them to the ads on the results page. Body Solutions didn’t come up simply because the quality of the results on this particular search was poor.

AltaVista’s not alone in being bad like this. Both Lycos-owned HotBot and AOL-owned Netscape Search failed to list Body Solutions in their editorial results when the suit was filed, but they did have Overture-distributed ads, just like AltaVista. Neither of them had a lawsuit slapped against them, however.

“We have to pick and choose where our strongest cases are,” said J.D. Pauerstein, of Loeffler, Jonas & Tuggey, about why HotBot and Netscape weren’t named. “The ones we chose are the ones where we think we have the best chance of success.” Loeffler, Jonas & Tuggey is one of two firms representing Mark Nutritionals in the case.

Of course, it may also be that no one did a comprehensive survey of all the important search engines out there. Pauerstein said that he didn’t know if anyone looked at Netscape and HotBot when deciding which search engines to sue.

Given that AltaVista does have editorial results and always provides them as part of its main role as a company, expect it to employ a newspaper analogy as part of its defense: “Mark Nutritionals doesn’t like the editorial results at AltaVista, so it seeks to prevent AltaVista from running ads.” Convincing a court to uphold that isn’t going to be easy.

For example, what would happen if Mark Nutritionals suddenly had major consumer problems? Let’s say there was a class action lawsuit filed against it for some reason. Law firms might want to run ads linked to “body solutions” to find claimants. Meanwhile, a number of anti-Body Solutions Web sites might pop up, filling the editorial results at AltaVista. In such a case, could Mark Nutritionals wield its trademark club and get the ads ousted, simply because it didn’t show up in the top results?

Indeed, such a scenario is one reason why Public Citizen, a Ralph Nader-backed consumer advocacy group, is considering whether it has a role to play in the case, to ensure that the interests of consumers and other members of the public are represented or protected.

“We are watching this case because, although the litigation will be between two commercial concerns, each of which has its own interests, we believe that consumers and other members of the public have an interest in having access to information that Web publishers are trying to communicate,” said Paul Levy, a staff attorney for Public Citizen. “The abuse of trademark law to prevent citizens from learning about those who want to speak about a company, and not just with its sponsorship, can have a serious impact on the utility of the Internet from the public’s perspective.”

Also complicating the case against AltaVista is the fact that its crawler-based results are subject to change. For all we know, Body Solutions may have been in the top results at AltaVista at some point in time and dropped down for various reasons. Something at the Body Solutions site itself could even be preventing it from ranking well at AltaVista.

Pauerstein said he didn’t know how long AltaVista had failed to prominently list the Body Solutions Web site but that he personally had been watching it for a month and consistently found the site absent from the top results.

Overall, it was a poor decision to include AltaVista among the search engines being sued. It’s not really fair, given that AltaVista’s business model is so significantly different from the others. It’s also goingto be much harder to show fault, I think.

No Love for Ad Engines

As for the ad engines, they certainly don’t gain much on the sympathy front. Unlike AltaVista, if they could do it, they’d sell every single listing and have no concerns about whether that serves users best.

The idea that they are making money off other people’s names certainly makes the ad engines sound bad, at least until you begin realizing how other people might have legitimate reasons to link ads to their trademarks.

However, there’s no easy way to counter the “we shouldn’t have to buy our own name” argument. It just feels wrong that people go to something that purports to be a search engine but that fails to deliver relevant navigation. Whether something that feels wrong is necessarily illegal remains to be seen.

Of course, we don’t know whether Mark Nutritionals made any type of effort to rectify the perceived problem before filing the case. For example, it could have asked the search engines named not to run any or all ads. It could have asked Overture to provide it with a “Quick Hit Results” link, which appears above paid listings for prominent companies, such as Nike.

Pauerstein said he didn’t know if any non-legal efforts such as these had been tried, but the impression I got was that they hadn’t.

“Given our perception that they engaged in unlawful conduct, the company wanted to seek redress,” Pauerstein said.

Even if Body Solutions had gone a non-legal route and got satisfaction, it’s inevitable that someone would have eventually taken legal action over this issue. The surprise is that it has taken so long. Overture has been running with a paid-placement model since launching as GoTo back in early 1998. Four years later, the first lawsuit finally arrives.

Bait and Switch?

The case has also raised the allegation of bait and switch, that consumers thought they were getting the Body Solutions Web site when they went to the search engines named but instead were delivered to something else.

This is complicated, as always with search engine-related cases, in that we don’t really know what a consumer wanted. But no one would doubt that a substantial number of people searching for “body solutions” at the search engines named probably wanted to reach the Body Solutions Web site.

Given this, did running the ads constitute bait and switch? Probably not the mere act of running keyword-linked ads, but the content of some of the ads might come under question.

For example, most of the ads I read at Overture wouldn’t have been confusing. Here’s the top listing on the day the suit was filed:

Body Solutions or MeTrim Night: Compare!
Dare to compare! Lowest price on Net. Perfecthealth4life, a MeTrim Night distributor, compares two nighttime weightloss supplements: their own MeTrim Night ($28.95) and Body Solutions ($48). www.perfecthealth4life.com (Cost to advertiser: $0.76)

Nothing in this description is designed to make you think you are coming to Body Solutions. Indeed, the description specifically notes that this is a distributor of the MeTrim product. Sure, a consumer might not read the description, but then the fault lies with the consumer, not the advertiser or ad distributor.

The first six results at Overture were all similar, and it would be difficult to argue they would be misleading. It’s the seventh where we get a problem:

Body Solutions compared to Calorad
You’ve heard the radio commercials, now decide for yourself. Lose weight, feel great, click here!

This ad led to a Calorad site, but you might not realize that. You might have assumed it was leading to the Body Solutions site. If that’s what you wanted, then clicked through and decided to stay with Calorad, Body Solutions can (and will) argue that it lost a customer.

“I’ve come on here because I wanted to find Body Solutions, and I find this site saying compare Body Solutions to Calorad, but it’s all about Colorad,” said Pauerstein. “What’s got you to this point is our name.”

In all, 4 of the 11 ads I reviewed on Overture weren’t clear. Legally, it might turn out that Overture isn’t responsible for these ads, if they are determined to be misleading. The court could say it is the advertiser who is responsible and should be sued. However, Overture (and the other ad engines) all have ad-review processes. It complicates their cases that unclear ads like these would run after being approved.

How about the search engines named in the suits? What are their views on the case? I haven’t yet contacted AltaVista, FindWhat.com, or Kanoodle.com. However, they don’t appear to be commenting on it yet.

I did contact Overture, given that a successful suit would impact it most seriously. Company executives said they were happy to talk, once they’d actually been served with the suit. I’ll bring news from the search engines, as it comes.

I also contacted Google. Though not named in a suit, this case could easily affect it and every other search engine carrying ads.

“We certainly respect trademark laws and believe that advertisers are best positioned to select both targeting and content that is appropriate and permissible under trademark and other laws,” said spokesperson Cindy McCaffrey. “Use of trademarks is certainly permissible in some contexts — including comparative use, fair use, use pursuant to a license, etcetera.”

In other words, it’s left to the advertiser at Google to decide if the content of its ad, the terms it links to, and the destination page the ad links to complies with trademark law.