Google has loosened its trademark policy for AdWords, the auction-based program where advertisers bid on keywords to place text ads alongside search results. Under the new policy, Google (NASDAQ: GOOG) will allow advertisers to include trademarked names in their text ads, even if the trademark belongs to someone else.
In a blog post detailing the change, Google likens the old policy limiting trademarks to a supermarket only being able to advertise with generic terms like “discount cola” or “snacks for sale.”
So this means that an online clothing retailer could include trademarked brand names like “Hugo Boss” or “Perry Ellis” in its text ad.
There are limitations, which Google spells out in its trademark policy. Retailers, for instance, must sell the product corresponding to the trademark, or the component parts relating to it.
The policy change brings Google in line with online competitors Yahoo and Microsoft, who have already adopted what is a standard practice in the offline world.
Google seems confident that it is well within the bounds of the law on this one, but advertisers have raised questions about other, murkier areas of its handling of trademarks.
The New York Times has a piece describing some of Google’s other legal troubles in the trademark arena, which have come from brands unhappy that the search giant places paid ads for competitors directly above their own Web sites in organic search results.
On Monday, a firm called FPX filed a class-action suit in Texas seeking to represent all trademark owners in the state charging Google with trademark infringement, the Times reported. That suit follows others brought by individual brands upset with Google for allowing competitors to place ads alongside their brands.
But Google sells its keywords at auction, which has proven a phenomenally successful business model. Bidding on a competitor’s brand is hardly a new phenomenon. Early in last year’s presidential campaign, for instance, John McCain sniped search results for “Rudy Giuliani” — then a serious rival — with paid ads of his own.
Google’s decision to roll out the new trademark policy just four days after FPX filed its lawsuit would seem to suggest that it’s not taking the legal threat too seriously.
Google is accepting ads containing non-owned trademarks today, but said it will not publish them until June 15.
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