An electronic registration mark is a proposed category of trademark that would restrict the use of trademarked words and phrases in online advertising.
The State of Utah proposed this in response to trademark owners' claims that online advertisers have abused trademarked terms. Some online advertisers, particularly search engines, allow trademarked keywords to generate advertisements for a trademark holder’s competitors. [1] Several corporations have sued search engines to stop this practice, claiming that it violates United States trademark law. In most of these cases, courts have ruled that traditional trademark law, as currently written, does not restrict advertisers’ ability to use trademarked terms to trigger advertisements. [2] [3] [4]
The Utah Trademark Protection Act created the electronic registration mark. Under this now defunct law, trademark holders could have restricted the use of its registered trademarks to generate advertisements for products that compete directly with the trademarked product. The owner of the mark could have sought redress from two parties: The competitor that purchased the advertisement, and the website that displayed the keyword-generated advertisement. This law applied only to internet pages viewed within the State of Utah. The law had instructed the state to create a searchable database of electronic registration marks and to provide access to this database free of charge. This became Utah law in 2007 but was repealed in 2008 before implementation.
No other states have established electronic registration mark laws, and the federal government's trademark law does not clearly address how it applies to online keyword searching. Judges in France have consistently upheld rulings that French trademark law bans the sale of trademarked search terms in keyword advertising for any website viewed from within France. [5]
Critics find several flaws with electronic registration marks. They argue that restricting the keywords that advertisers can use violates the First Amendment. Another issue concerns an advertiser’s ability to determine whether a web page is being viewed in Utah or elsewhere: Because of this ambiguity, the law may be vulnerable to Dormant Commerce Clause challenges. Critics also assert that the law worsens the quality of online search results by restricting the search results that users can view. Supporters respond that trademark law has always considered trademark infringement to be a form of theft that is not protected speech, that search engines have demonstrated that they can pinpoint Internet users’ locations, and that paid advertisements are not a core component of an Internet user's experience. [6]
Affiliate marketing is a marketing arrangement in which affiliates receive a commission for each visit, signup or sale they generate for a merchant. This arrangement allows businesses to outsource part of the sales process. It is a form of performance-based marketing where the commission acts as an incentive for the affiliate; this commission is usually a percentage of the price of the product being sold, but can also be a flat rate per referral.
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Click fraud is a type of fraud that occurs on the Internet in pay-per-click (PPC) online advertising. In this type of advertising, the owners of websites that post the ads are paid based on how many site visitors click on the ads. Fraud occurs when a person, automated script, computer program or an auto clicker imitates a legitimate user of a web browser, clicking on such an ad without having an actual interest in the target of the ad's link in order to increase revenue. Click fraud is the subject of some controversy and increasing litigation due to the advertising networks being a key beneficiary of the fraud.
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Rescuecom Corp. v. Google Inc. 562 F.3d 123, was a case at the United States Court of Appeals for the Second Circuit, in which the court held that recommending a trademark for keyword advertising was a commercial use of the trademark, and could constitute trademark infringement.
Network Automation, Inc. v. Advanced Systems Concepts, Inc., 638 F.3d 1137 was a court case decided on March 8, 2011, where the United States Court of Appeals for the Ninth Circuit ruled that the use of a competitor's trademark as an Internet search advertising keyword did not constitute trademark infringement. In the case, Network Automation advertised their own competing product in search queries that contained Advanced Systems Concepts' "ActiveBatch" trademark. In determining whether trademark infringement occurred, the court evaluated factors relevant to the likelihood of customer confusion outlined in AMF Inc. v. Sleekcraft Boats and concluded that confusion was unlikely.
Google France SARL and Google Inc. v Louis Vuitton Malletier SA (C-236/08), also known as Google v. Louis Vuitton was a landmark decision in which the European Court of Justice (ECJ) held that search engines operators such as Google do not themselves infringe trademark rights if they allow advertisers to use a competitor's trademark as a keyword.