Thursday, May 21, 2009

Behavioral Targeting Interest Based Advertising and The Trademark Infringement Laws

The day of behavioral targeting is upon us. In 2005 the Second Circuit, Federal Court of Appeals found that use of trademarks in Internet advertising is not "use in commerce" for purposes of the Lanham Act; thereby upholding the use of trademarks to trigger the competitive use of pop-up ads. This week I received a notice from Google advising me to update my privacy policy: "Interest-based advertising will allow advertisers to show ads based on a user's previous interactions with them, such as visits to advertiser website and also to reach users based on their interests (e.g. "sports enthusiast"). To develop interest categories, we will recognize the types of web pages users visit throughout the Google content network.

As an example, if they visit a number of sports pages, we will add them to the 'sports enthusiast' interest category." The one time problem, now cleared by this court, was that the process of data collection had the potential of violating the trademark laws.

The "competitors" (competing advertisers (through Google in this example)) use information collected concerning our web-browsing behavior and then select the ads to display on our screen. This ability offers an advantage to the savvy marketer. But, are we, the computer user (c-user), being improperly influenced? Do we really want to be led around by someone else's algorithm? Let's say you look up McDonald's hamburgers and you get a pop-up for Angus. Hopefully, you get the idea.

So, what basically happens is that a software package on one window of your computer gathers your web surfing data, crunches it, matches it with their database of similar but competing goods and services, and then gives you a pop-up ad on another window for the competitor of the guy who you actually found on the web.

The details are in the case but, if you're curious, The Lanham Act, 15 USC section 1125 , provides: "(a) Civil action (1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which - (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act."

The Lanham Act further defines "use in commerce," as follows: "For purposes of this Chapter, a mark shall be deemed to be in use in commerce - (1) on goods when - (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce, and (2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce. . . ." 15 U.S.C. section 1127 In deciding for the defendants (pop-up guys), one court observed "A company's internal utilization of a trademark in a way that does not communicate it to the public is analogous to a individual's private thoughts about a trademark." This apparently means that so long as the defendant keeps the plaintiff's information hidden from view ("private thoughts"), it can be used by the defendant however creatively he sees fit. This is so even though the free riding competition will "profit from the goodwill and reputation in Plaintiff's website that led the user to access Plaintiff's website in the first place."

Ironically, it appears that this caselaw has also implicated our (c- user's) interests by ushering in a crowd of software applications that will analyze our own "private thoughts" in order to target advertising. For a recent and interactive application of an eerily similar technology check out any of the Google account services like Gmail, AdSense, AdWords, Google Reader, Google Calendar, Webmaster Central or Google Analytics and you may notice their "search wiki" digesting your every search and serving it up to the highest bidder. This of course, requires the c-user's consent ... Or does it? I still can't figure out how to opt out and therefore, I am concerned about the impact this technology may have. It will be interesting to see if the legislature will step in and try to regulate the bothersome activity of pop-ups and help protect us from ourselves. Beware: "THERE'S A CODE IN EVERY HAPPY MEAL!" Article Source:

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