Utah Search Law Could Aid State's Auto Dealers and Pharma Brands

Pharmaceutical firm Cephalon, which has a manufacturing facility in Salt Lake City, can’t be happy about discount Canadian drug sellers targeting search ads using the trademarked name of its sleeping disorder agent Provigil.

Car dealers also fret when local competitors and large Web-based auto sites use auto brands and even their own store names to attract users through sponsored search results. Both industries might benefit from Utah’s recently-passed Trademark Protection Act, which bans advertisers from using the trademarked terms of competitors to target ads to Utah users.

Google, Yahoo and MSN searches on “Provigil” return organic links to the official site promoting the drug brand, along with sidebars loaded with ads for discount drug sellers. “Buy Provigil at Low Price,” declares one sponsored link promoting a Canadian pharmacy. Another touts “Discount Provigil.” Calls to Cephalon weren’t returned in time for publication.

Pharmaceutical companies will care a lot about the law, said Matthew Prince, an adjunct professor of law at Chicago’s John Marshall Law School and CEO of Utah-based tech firm Unspam. Prince assisted in drafting the Utah legislation. When competitors use the term “Viagra” to target ads to alternatives to the impotency pill, “it doesn’t sit particularly well with Pfizer,” said Prince. A Google search on the term results in a host of links to Viagra competitors, such as MuchBetterThanViagra.com which promotes herbal supplement Libidus.

Utah’s Trademark Protection Act, signed into law March 19, “establishes a new type of mark, called an electronic registration mark, that may not be used to trigger advertising for a competitor and creates a database for use in administering mark,” as noted in documentation of the legislation. The law calls for the creation of a registry for the electronic marks.

Trademark owners can request that search engines block the use of their brand names in ad titles and copy. “I’ve never had a problem blocking anything,” said Michael Bridges, VP of client services at SEMDirector, who said some of his advertiser clients are simply excluding Utah users from search campaign targets as a result of the law.

“It’s not that easy” to block the use of brand names by competitors in ad copy, said Ian Bardorf, director of business development for pharmaceutical search engine marketing firm Catalyst Search Marketing. “It can take quite a bit of time” before search engines actually implement a barrier, and in the meantime brand owners are still exposed to potential damage from competitors, he said.

Medical supply maker Merit Medical Systems, which has a manufacturing facility in Salt Lake City, is up against online sellers targeting search ads to terms like “Merit medical supplies.” That phrase results in ads for a variety of online medical supply retailers, including AllHeart.com, which doesn’t include Merit products in its site brand list. Merit donated $600 in 2004 to the Utah law’s chief sponsor, State Senator Dan Eastman. The company didn’t respond to calls from ClickZ for this story.

Other biotech firms based in Utah include Myriad Genetics and NPS Pharmaceuticals, both of which partner with big drug makers.

A search on the term “Salt Lake City Acura” brings up an ad for StephanWade.com, online home to a local dealer who sells Hondas, Mazdas, Chevrolets, Cadillacs and Nissans, but not Acuras. It also spawns ads for CarMax and Autobytel.com, sites that connect buyers to new and used car dealers. A search on “Mike Hale Acura” results in a paid link to Jody Wilkinson Acura, a local Salt Lake City competitor. Mike Hale Acura didn’t respond to calls from ClickZ for this story.

“We are investigating the impact that this [Utah] law would have on us,” CarMax spokesperson Elia Imler told ClickZ News. In 2004, the Utah Auto Dealers Association (UADA) gave $1,700 to Eastman’s election campaign; Mike Hale Acura, an association member, gave $1,000 that year, according to the National Institute on Money in State Politics.

“Dan [Senator Eastman] and I are very good friends, and he runs a lot of bills on our behalf,” said UADA Director Craig Vickmore. Eastman has introduced legislation including the Powersport Vehicle Franchise Act, the New Motor Vehicle Franchise Act and the Motor Vehicle Business Regulation Act.

After hearing a description of the Trademark Protection Act, Vickmore said he thought the association’s members might “be excited about it.” However, he added, “I don’t know anything about it.” Eastman said the legislation might benefit car dealers and other businesses as well. “Anybody that trades on a trademark will benefit from the law,” he said. “It provides some form of protection….the online word searches are getting pretty broad and we just felt there were some infringements happening.”

Scott Buresh, CEO of search marketing outfit Medium Blue, agrees with many online marketers and consultants who say the law is unenforceable and therefore won’t have much impact on their businesses. Still, he believes brand advertisers “shouldn’t be forced to pay higher and higher prices” to appear at the top of paid search results after already having paid to establish their brands. “If you want to make this a simple, elegant solution, let the trademark owner show up first [at the top of the paid results],” he said.

UPDATE: Although this story implies that medical supply retailer AllHeart.com targets sponsored search results to the keyword phrase “Merit medical supplies,” the firm does not target search ads to that phrase. Instead, it targets search ads to the term “medical supplies.”