Utah Rewrites Search Law, But Trademark Registry Remains

The senate sponsor of Utah’s controversial Trademark Protection Act has a rewrite of the legislation in his hands. Since meeting in April, Internet industry giants and online advertisers including Google and AOL have kept in regular communication with Utah state legislators in the hopes of altering the legislation to assuage concerns about the impact it could have on Internet businesses, particularly search ad firms and advertisers. Whether the amended legislation will completely pacify opponents of the original law has yet to be seen.

“I just got a rewrite of the bill as recently as yesterday,” the bill’s sponsor, Utah Senator Dan Eastman, told ClickZ News Friday. “I’m not sure that [both sides are] happy with it, but I think they’re in agreement, and this is something that both sides can live with.”

The Trademark Protection Act, signed into law in March, bans advertisers from using the trademarked terms of their competitors to target ads to Utah users. When it passed, many marketers and members of the Internet industry were alarmed by the law, arguing it would be difficult to abide by or enforce, and could stifle competition, particularly among advertisers employing competitors’ trademarked terms to target search ads.

Eastman had yet to “study” the amended version of the law when ClickZ spoke with him last week; however, he stressed the new language maintains a primary purpose of the legislation, a registry for Utah trademark owners. The law establishes an “electronic registration mark” that will serve to protect trademark owners that pay to file words with the to-be-created registry.

The builder of that database has not been chosen yet, according to Eastman, who said Requests for Proposal have been submitted to possible vendors. Eastman added he does not think the project will be awarded to the same firm that manages Utah’s do-not-contact child protection registry, Unspam.

“The database will go forward and the site will be available in the next several weeks,” said Eastman. The amended act, on the other hand, will not be available for approval by Utah lawmakers until the next legislative session.

What’s no longer included in the rewrite is language calling for penalties if infringement on a trademark registered in the database occurs. “The bill itself doesn’t provide for a lawsuit or penalty for infringement,” said Eastman. Instead, he said it would be the responsibility of the parties involved with alleged infringement to settle the situation themselves.

After he studies the amended document, Eastman said he plans to have it evaluated by an intellectual property law firm for “fine tuning.” When the original legislation passed, Eastman told ClickZ it could serve as a marketing tool for legal firms “to increase the client base so they could help individuals who have had trademark violations committed against them.”

An industry group including representatives of AOL and Google has worked collectively with Utah legislators since an initial face-to-face meeting in April. As reported in April by The Salt Lake Tribune, execs from Microsoft and Yahoo, along with big search advertisers like eBay, Overstock.com and 1-800 Contacts attended the powwow.

“There was pretty broad recognition on the part of the legislators that the bill had some pretty significant unintended consequences. We continue to look for ways to fix those unintended consequences,” said a representative of one of the industry group members last week.

“We’ve been in near constant dialogue since the spring,” added the source, who requested anonymity. According to Eastman, all subsequent communications have occurred via phone or other messaging.

Another person familiar with the proceedings said the draft amendment “will be a workable solution.”

“We pretty well came to an agreement in that [first in-person] meeting,” said Eastman, who said the negotiations and amendment took longer than originally anticipated. “Everybody’s busy,” he explained.

Both Eastman and the sponsor of the Trademark Protection Act in Utah’s House of Representatives, Representative David Clark, expect the law to inspire similar rules in other jurisdictions. “We’ve been greatly encouraged by the number of businesses in the country… looking over the fence at this and saying this is something we’d be interested in,” said Clark.

Eastman said he often hears from registry proponents from Utah and beyond, too. “I get a number of e-mails a month saying, ‘Where’s the database?'”

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