Key Takeaways

  • Keyword advertising involves bidding on search engine keywords, which may include competitor trademarks.
  • Trademark holders may claim infringement if keyword use causes consumer confusion.
  • Courts analyze factors like consumer sophistication, evidence of confusion, and fair use when deciding infringement claims.
  • Defensive keyword strategies can mitigate legal risk, such as purchasing your own trademarks.
  • Search engines typically avoid liability; the burden falls on the advertiser.

What is Keyword Advertising Trademark Infringement?

Keyword advertising trademark infringement occurs when online search engine companies sell trademarked words and phrases to competitors of the trademark owner. Keyword advertising trademark infringement is a relatively new concept since search engines have become more widely used in the last decade.

Trademark owners are unhappy with this practice because they believe it leads to confusion among consumers. When consumers search for keywords that fall under the trademark, they see those exact words on websites that don't relate to the actual product or brand. This also increases the time it takes to find the right product or service from the company that holds the trademark.

Infringement only occurs when the search engine links the actual words within a trademark to a competitor. Your customer might perform a generic search for "contact lenses," which is not a term that is eligible for trademark protection.

More specific phrases, however, such as Bausch & Lomb, do fall under trademark protection. When a search engine links to a competitor's site with the trademarked keyword, this is a problem.

In some cases, it's easy for a consumer to see that a hit on a keyword search is paid advertising. But it's not always as clear.

Keyword advertising trademark infringement may decrease the value of the trademark because others are using it to gain awareness and draw traffic to their sites or increase sales. Trademark applications aren't free, so those who spend time and money to obtain a trademark on a phrase, word, or slogan lose out on the value it should hold.

Trademark laws state that only the trademark holder can use, profit from, copy, and distribute the approved mark. But when it's found through a search engine, it seems that the trademark protection isn't as strong.

The original purpose of a trademark was to reduce confusion among consumers. When someone wants to buy a product or service from a specific company, it should be easy to see what company made or offered the item. But allowing keyword advertising trademark infringement can cause confusion, so it seems to violate the law.

Those on the opposite side argue that allowing consumers to search with keywords actually offers a benefit. Doing so increases awareness and allows the consumer to make a more educated decision.

Internet marketing and search engine analysis is a newer problem for trademark owners. When assessing whether an instance of keyword advertising infringes on a trademark, courts often rely on economic analysis. Information found in analyses includes internet traffic based on keyword searches, the value of the trademark, and how close the goods or services appear in a search

When assessing potential damages caused by keyword advertising trademark infringement, lawyers also look at possible infringements and how much money was lost in sales due to similarity and proximity.

Legal Tests Used by Courts

Courts use several legal frameworks to evaluate whether keyword advertising constitutes trademark infringement:

  • Likelihood of Confusion Test: The most common test in trademark cases. Courts assess whether a reasonably prudent consumer is likely to be misled about the origin of the goods or services.
  • Use in Commerce: Merely purchasing a keyword is considered “use,” but courts often demand more—such as including the trademark in ad text.
  • Nominative Fair Use: If a company uses another’s trademark to describe that company’s product (not its own), and doesn’t suggest endorsement or affiliation, the use may be protected.

Courts also weigh:

  • Strength of the trademark
  • Proximity of goods/services
  • Similarity in advertising and presentation
  • Actual consumer confusion
  • Consumer sophistication​

How Keyword Advertising Works in Search Engines

Keyword advertising allows businesses to bid on specific search terms, including competitors' brand names, to display ads in search engine results. Google Ads and similar platforms operate on a pay-per-click model, meaning businesses pay each time someone clicks their ad. These keywords can include:

  • Generic product categories (e.g., “running shoes”)
  • Brand names (e.g., “Nike” or “Adidas”)
  • Competitor names, which often raise legal concerns if trademarked

The controversy arises when one company uses another’s trademarked name to attract search traffic, potentially confusing consumers or diverting business unfairly​.

Why Is Keyword Advertisement Trademark Infringement Important?

Keyword advertisement trademark infringement is important because of the value of online search tools and marketing. Companies across all industries are focusing more time and energy on online initiatives that generate awareness about the brand. When a company or person holds a trademark, that serves to protect the interests and intellectual property. Allowing a search engine company to sell those trademarked keywords causes confusion and lessens the value of the trademark.

If you are facing possible keyword advertising trademark infringement, your case will need to meet four elements:

  • You must hold a current trademark
    • This trademark must exactly match the keyword or words
  • You have prior rights to the design
  • The other company or person infringing on your mark used it to sell services or goods in regular commerce
  • The other company's use of the mark will likely cause confusion for consumers
    • Confusion relates to the source of the service or goods, or whether the other company or person is affiliated with the trademark owner

Many of the cases that favor the search engine sites or competing companies find that keyword advertising doesn't infringe on a trademark because it's not an actual use of the trademark.

When a case goes to court, those involved will look at several factors as well:

  • Intent
    • You must prove that the third-party intended to mislead the consumer by using keywords.
  • Actual confusion
    • You'll have to include actual proof of consumer confusion that happened as a result of the keyword advertising.
  • Consumer sophistication
    • This relates to whether those who see the keyword are members of the general public or potential customers searching for your brand or product.

Reasons to Consider Not Using Keyword Advertising Trademark Infringement

If you believe that someone else infringed on your trademark by purchasing keywords, you can take legal action. As a trademark holder, you have the right to sue in federal court over infringement. But proceed with caution, as there is not always enough proof to validate the claims of infringement.

Consumers use keywords every day to search for products and services. It's difficult to prove that the use of a keyword constitutes trademark infringement. Even when the keyword is contained within your mark, you may not be able to show that the use by a third-party caused significant confusion.

Because keyword advertising trademark infringement cases are hard to win, many companies avoid fighting this battle.

If you hold a trademark or trademarks, you may wonder how to protect your company or yourself from infringement. The best way to do so is monitor usage of keywords by searching for them yourself. If you find that someone else is causing confusion through advertising, submit a compliant to the company that owns the search engine where you found the concerning use of keywords.

If filing a complaint against Google, Yahoo, Bing, or one of the other search engine companies doesn't solve the problem, you can also go directly to the company that is using your trademark as a keyword.

Some companies take a more defensive approach by buying their own trademarked keywords and phrases before a competitor can do so. Even if the cost to buy those words from the search engine company is high, it's likely less than the cost of taking legal action against an infringer.

Best Practices for Avoiding Infringement in Keyword Advertising

To avoid keyword advertising trademark infringement, consider these best practices:

  • Avoid using competitors’ trademarks in your ad copy. Even if you bid on trademarked terms, displaying them in your text increases confusion risk.
  • Use disclaimers. Clarifying your brand's identity in the ad may reduce the chance of perceived confusion.
  • Bid on generic keywords. Focus campaigns on product categories rather than competitor names.
  • Register your own trademarks as keywords. This prevents competitors from buying them and protects your brand presence online.
  • Regularly monitor ad activity. Use Google Alerts or paid tools to track unauthorized use of your trademarks in ads.

Being proactive helps reduce liability and fosters ethical competition in digital marketing​​.

What Could Happen When You Do Keyword Advertising Trademark Infringement?

There are examples of keyword advertising trademark infringement claims across a variety of industries. In 2012, Rosetta Stone Ltd. filed a suit against Google, Inc. Google had launched its AdWords program more than a decade earlier, and in 2004 it changed the program to allow bids on trademarked words. Following this change, more than 20 companies filed suits, including Rosetta Stone.

Rosetta Stone claimed that Google's AdWords program allowed third-party companies to mislead consumers who were searching for Rosetta Stone's products and services. The suit included claims of direct trademark infringement, vicarious trademark infringement, trademark dilution, and contributory trademark infringement.

Trademark dilution involves changing a trademark in a minor way to use it. Vicarious and contributory trademark infringements occur when someone participated in infringement without being the primary offender.

This case was ruled in Google's favor. Analysis proved that no specific examples of consumer confusion occurred as a result of the AdWords program. It's not easy to prove confusion among consumers, especially because simply using trademarked words or phrases doesn't always lead to confusion for someone looking for a specific brand or product.

Courts are reluctant to blame the search engine companies for keyword advertising trademark infringement. But if your company is blatant in its use of these trademarked keywords, such as using them in banner ads or other marketing campaigns, you could violate the terms of a trademark by causing consumer confusion.

Another example involved General Steel Corporation and Armstrong Steel Corporation. Both offer prefabricated steel buildings. A former employee of General Steel started the competing company. He launched a keyword campaign that focused on keywords "general steel buildings." General Steel filed a suit against Armstrong Steel for trademark infringement based on the keyword ads, among other claims.

The judge ruled in favor of Armstrong Steel in this case as well. There wasn't enough clear evidence that the campaign confused consumers. The judge also stated that customers targeted by the keywords are sophisticated and would not hastily purchase a steel building because of an ad campaign. A large purchase like this involves more research, which negates the confusion claim.

One question that commonly arises in keyword advertising trademark infringement is what constitutes use. In the last decade, federal district courts have held firm to the idea that buying another company's trademarked words to use as a keyword in a search and/or trigger advertising constitutes use in commerce. But the plaintiff must still provide sufficient proof that the example of use in commerce caused confusion among consumers.

Common Mistakes

It's a mistake to assume that using a keyword found in your trademark is always an infringement. As evident in many of the recent cases, it's very difficult to prove confusion caused by keyword advertising. Without sufficient proof, you won't win a case of keyword advertising trademark infringement.

One example ruled in favor of the trademark owner was between Sara Lee Corp. and Kayser-Roth Corp, direct competitors. Sara Lee Corp. also brought consumer surveys as evidence, which show confusion >30 to 40 percent of the time.

Recent Trends and Industry Implications

Legal outcomes related to keyword advertising continue evolving as online marketing becomes more complex. Key trends include:

  • Shift toward consumer protection: Courts increasingly focus on whether consumers are genuinely misled by the use of trademarks in ads.
  • Growing use of surveys: Plaintiffs often use consumer surveys to demonstrate confusion, with success varying based on methodology and margin of error.
  • Impact on small businesses: Smaller firms may struggle to defend their trademarks due to the cost of litigation, placing greater importance on preventative measures like preemptive keyword purchases.
  • Platform policy changes: Google has adjusted its AdWords policies over time to allow limited use of trademarks, as long as ad content complies with fair use guidelines​.

Frequently Asked Questions

  1. Is it legal to use a competitor’s trademark as a keyword in Google Ads?
    Yes, but it may lead to trademark infringement if it causes consumer confusion or implies endorsement.
  2. What’s the difference between trademark use and infringement in keyword advertising?
    “Use” refers to bidding on a keyword; infringement requires proof that such use misleads consumers or harms the trademark holder.
  3. Can I include a competitor's name in my ad copy?
    This is much riskier than bidding on the keyword alone and often considered infringement unless clearly allowed under fair use.
  4. How do courts decide if keyword use is infringement?
    Courts apply multi-factor tests focusing on likelihood of confusion, intent, consumer perception, and evidence of harm.
  5. What should I do if someone’s using my trademark in keyword ads?
    Start by filing a complaint with the search engine. If unresolved, consider cease-and-desist letters or legal action with a trademark attorney’s help.

If you need help with keyword advertising trademark infringement, you can post your question or concern on UpCounsel's marketplace. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.