Holding the Key(Word)

Every new method of communication presents legal challenges. When the printing press was invented, 15th-century judges undoubtedly were kept very busy setting new precedents. After all, people had access to entirely new methods of communicating with—and, inevitably, defaming—each other.

“Any time there’s a medium change, there’s a struggle under existing principles of law,” says Eric Paulsrud, shareholder at the Minneapolis law firm Leonard Street and Deinard. “It just takes the courts a number of years to hash out how they are going to apply existing trademark law to the new medium. It was that way with newspapers, then radio, then television. Right now, what we’re dealing with is trademarks on the Internet.”

What’s in a Word?

The issue now is Internet keywords: these keywords or tags that can be purchased from search engine companies in order to secure a place at the top of the page on searches for those words. Usually a company will purchase its own name and a number of other words that pertain to its products and services. But what happens if a company purchases its competitor’s name or other trademarked words?

In terms of the Internet, a company can make its own site pop up at the top of the search results whenever someone types in the competitor’s name. What happens in business terms, however, is an angry competitor places a phone call to its trademark lawyer.

Part of the reason keyword search terms are so important to businesses, Paulsrud says, is that many of the decisions potential customers make on line are not “sticky.” What does he mean by sticky? “If I get off at a highway exit and there’s a McDonald’s, I’ll buy a McDonald’s,” he says. “If there’s a Burger King, fine. I’ll buy Burger King. It’s not a super sticky decision. So if someone erected a billboard on the side of the highway that said there was a McDonald’s at the exit, but in reality there was only a Burger King, I would probably go ahead and purchase the burger at the competitor. That’s what is going on the Internet: People’s decisions get diverted by where the keyword sends them.”