Researchers Find Liberalised Google Keywords Not Harmful To Trademarks

By Monika Ermert for Intellectual Property Watch

A Swiss-US team of researchers is challenging the “belief that the granting of property rights is necessary in order to overcome information asymmetries and other market failures in consumer markets,” a core concept in the fight over trademark protection on the internet.

Zurich-based law expert Stephan Bechtold (ETH) and MIT Sloan School of Management Associate Professor Catherine Tucker analysed clickstream data of 20,149 internet users in France and Germany to ascertain the effect of a liberalisation of Google’s Adword policy.

Their study is available here.

Google’s policy allows the purchase of keywords so that searches for a trademark would arrive at the respective website. Trademark owners had asked Google to deny their trademarks as keywords to anyone else without their permission.

But the European Court of Justice in 2010 in the Louis Vuitton case decided that Google had not infringed trademark law by allowing advertisers to bid for keywords corresponding to third party trademarks. After that, the search engine provider changed its policy enabling third parties to select trademarked terms as keywords.

In what amounted to a field test on the effects of the trademark law change, the researchers found a decrease of 9.2 percent in consumers visiting trademark websites in cases where users searched for the exact term (navigational searches).

But the effect was overcompensated, according to the authors, by an increase in users searching more generally for information on the trademark (non-navigational searches) which amounted to 14.7 percent.

The authors concluded that the use of trademarks by users on the net is more complicated than asserted by trademark owners in litigation in the past, and that measurements like the one presented in the study can be used to check on effects for cases in the courts.