eBay takes steps to prevent competition

I am a shareware author offering a product for eBay sellers. Click here to view the homepage for my product (AuctionSage).

I rely mostly on word of mouth advertising but decided to try a Google adword campaign. Google adword ads appear on the right of the Google search page. Click here to see an example. The text searched was "Nike".

Below is a screen shot of my Google adword ad.

Keywords for this ad include "shareware software ebay", "ebay selling", "ebay listing software", "reliable software for ebay" , among others.

The user searching Google never sees the keywords but if all the keywords are contained within the text he enters in the google search engine your ad will be displayed on the search results page (depending on how much competition there is for that keyword phrase and how much you are willing to pay for your ad to be seen). If the user clicks your google ad his browser is navigated to whatever URL you have entered for that ad, in this case the AuctionSage homepage.

All was going well with this advertising campaign when all of a sudden I receive an email from the Google adwords team disallowing all my keyword phrases containing the name "eBay" based on a trademark complaint filed by eBay. Click here to view the complete text of that email.

After several emails back and forth with Google adwords support I finally was able to receive a copy of the trademark complaint filed by eBay. Click here to view the complaint. Click here to view 10 pages of trademarks that eBay wishes Google to ban from keyword phrases.

Note that the complaint does not list any specific ad. The complaint seeks to disallow the use of the name "eBay" as part of a keyword phrase regardless of the fact that the user never sees the keywords, only the ad itself. In my opinion this action is far beyond the scope of United States trademark law and violates the "Fair use" doctrine.

Please read the court's opinions in the case of The NEW KIDS ON THE BLOCK et. al. v. NEWS AMERICA PUBLISHING, INC.

Indeed, it is often virtually impossible to refer to a particular product for purposes of comparison, criticism, point of reference or any other such purpose without using the mark. For example, reference to a large automobile manufacturer based in Michigan would not differentiate among the Big Three; reference to a large Japanese manufacturer of home electronics would narrow the field to a dozen or more companies. Much useful social and commercial discourse would be all but impossible if speakers were under threat of an infringement lawsuit every time they made reference to a person, company or product by using its trademark.

A related problem arises when a trademark also describes a person, a place or an attribute of a product. If the trademark holder were allowed exclusive rights in such use, the language would be depleted in much the same way as if generic words were protectable. Thus trademark law recognizes a defense where the mark is used only "to describe the goods or services of [a] party, or their geographic origin." 15 U.S.C. s 1115(b)(4). "The 'fair- use' defense, in essence, forbids a trademark registrant to appropriate a descriptive term for his exclusive use and so prevent others from accurately describing a characteristic of their goods." Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir.1980)."

A good example of this is Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350 (9th Cir.1969), where we held that Volkswagen could not prevent an automobile repair shop from using its mark. We recognized that in "advertising [the repair of Volkswagens, it] would be difficult, if not impossible, for [Church] to avoid altogether the use of the word 'Volkswagen' or its abbreviation 'VW,' which are the normal terms which, to the public at large, signify appellant's cars." Id. at 352. Church did not suggest to customers that he was part of the Volkswagen organization or that his repair shop was sponsored or authorized by VW; he merely used the words "Volkswagen" and "VW" to convey information about the types of cars he repaired. Therefore, his use of the Volkswagen trademark was not an infringing use.

 

My adword ad is clearly using the eBay trademark merely as a descriptive term and to deny the use of "eBay" as part of a keyword phrase makes if effectively impossible to advertise my product for it's intended purpose.

Also, please read the court's conclusions in the case of Playboy Enterprises Inc v. Netscape Communications Corp which is a case similar in nature.


eBay has recently started their own type of adword campaign via the services of "adMarketplace". You create a banner ad and you assign keywords to it. When an eBay user does a search if those keywords are part of his search spec your ad will appear on a rotating basis. I had a user of mine inquire as to whether trademarks were allowed as keywords in the adMarketplace "keywords" ad campaign and here is their reply:

Thank you for contacting adMarketplace Support.

Yes. You can use brand names as keywords in your campaign. But please remember that the brands names cannot appear on the banner, which you have created for your campaign.

If you have any additional questions, please let us know and someone will respond to you promptly.

Thank you.

Regards

Harish

adMarketplace Support

 

So it appears that eBay, in cooperation with adMarketplace, has no problem with using brand names (trademarks) as keywords when it comes to their "keyword" ad business but they do have a problem with the "eBay" brand name being included in a keyword phrase in the google "adword" ad business. At the very least this is an inconsistant position.


Here is the reply I received from the intellectual property counsel at eBay on this subject:

August 1, 2003

Mr. Corea,

Thank you for your email.  As the owner of a famous trademark, eBay has an obligation to protect it from uses that may confuse consumers as to a third party's affiliation, endorsement or sponsorship by eBay.  While I'm not familiar with the specific examples that you mention, use by a third party of "eBay" (or a confusingly similar variation) as a sponsored link on a search engine such as Google, could confuse consumers.  For example, a consumer might well believe that "eBay Seller Software" relates to software that eBay distributes for its sellers.  Even if a consumer ultimately realizes that the software is not affiliated with eBay once they click on the link, the initial diversion based on eBay's famous trademark could constitute initial interest confusion, which numerous courts have found to be actionable under the Lanham Act.  While we do recognize that there can be a fair use of trademarks in Internet search engine keywords, the likelihood of confusion prevents us from consenting to the use in question.We regret if this has caused you any inconvenience.

Sincerely,

Brett Healy

Intellectual Property Counsel


Mr Healy's opinion is based on the false premise that the keyword phrase is visible to the user. It isn't. The user only sees the sponsored ad, not the keyword phrase so the claim of potential initial interest confusion is invalid.


On August 4, 2003 the following email was sent to Brett Healy:

 

This is a formal request for eBay to notify Google adwords to allow the following keyword phrases for my ad campaign: "software for ebay sellers" , "reliable software for ebay" , "ebay selling software". Please email me a copy of your notification to Google. The fair use doctrine allows me to use the "ebay" mark because it is merely used to describe how my product is used. It is impossible to describe my product without using the "eBay" mark.   Please read the court's opinions in the case of The NEW KIDS ON THE BLOCK et. al. v. NEWS AMERICA PUBLISHING, INC.

Indeed, it is often virtually impossible to refer to a particular product for purposes of comparison, criticism, point of reference or any other such purpose without using the mark. For example, reference to a large automobile manufacturer based in Michigan would not differentiate among the Big Three; reference to a large Japanese manufacturer of home electronics would narrow the field to a dozen or more companies. Much useful social and commercial discourse would be all but impossible if speakers were under threat of an infringement lawsuit every time they made reference to a person, company or product by using its trademark.

A related problem arises when a trademark also describes a person, a place or an attribute of a product. If the trademark holder were allowed exclusive rights in such use, the language would be depleted in much the same way as if generic words were protectable. Thus trademark law recognizes a defense where the mark is used only "to describe the goods or services of [a] party, or their geographic origin." 15 U.S.C. s 1115(b)(4). "The 'fair- use' defense, in essence, forbids a trademark registrant to appropriate a descriptive term for his exclusive use and so prevent others from accurately describing a characteristic of their goods." Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir.1980)."

A good example of this is Volkswagenwerk Aktiengesellschaft v. Church, 411 F.2d 350 (9th Cir.1969), where we held that Volkswagen could not prevent an automobile repair shop from using its mark. We recognized that in "advertising [the repair of Volkswagens, it] would be difficult, if not impossible, for [Church] to avoid altogether the use of the word 'Volkswagen' or its abbreviation 'VW,' which are the normal terms which, to the public at large, signify appellant's cars." Id. at 352. Church did not suggest to customers that he was part of the Volkswagen organization or that his repair shop was sponsored or authorized by VW; he merely used the words "Volkswagen" and "VW" to convey information about the types of cars he repaired. Therefore, his use of the Volkswagen trademark was not an infringing use.

Also, your argument regarding "initial interest confusion" is invalid for the simple reason that the user searching google never actually sees the keywords, only the ad. My ad says:

AuctionSage Software - Reliable Software for eBay Sellers - www.auctionsagesoftware.com

 

Sincerely,

 

John P Corea

AuctionSage Software

 

The above email was sent with a read receipt requested and it was read on August 4 2003 however as of today, August 23, 2003, I have received no reply. The keyword phrases I requested permission for clearly fall under the 'nominative fair use' doctrine and yet it appears that eBay isn't inclined to allow even fair use, contrary to their public statements.


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Contact Information

Brett Healy
Intellectual Property Counsel for eBay
brett@ebay.com

Rose Hagan
Attorney for Google
hagan@google.com

Kevin Pursglove
eBay Spokesman
kevinp@ebay.com