May 14, 2007, 12:00 AM

Utah legislators back off keyword search bill

Utah has agreed not to enforce for now a new law that would ban search engines from displaying competitors’ ads when someone searches for a trademarked name.

A Utah law designed to prevent competitors’ ads from popping up next to search results for a trademarked name took effect April 30 but is not being enforced for the time being. State Rep. David Clark, one of the backers of the Trademark Protection Act passed this year, says state officials agreed to move slowly on setting up the enforcement infrastructure after a meeting in late April with representatives of Google, Yahoo, Microsoft, AOL and other Internet companies.

“We’re in an agreed-upon hold area as we try to dialogue with them to see if we can accomplish what we’re trying to do with as little impact as possible on their business,” Clark tells Internet Retailer.

The law calls on Utah to set up a system that would allow companies to register their trademarks. Once that registry is set up, a company that had registered its trademark could sue if a search for one of its trademarked names led to a competitor’s ad being displayed.

Clark says the state is purposely moving slowly on setting up the registry so the law cannot be enforced while the state continues to meet with industry representatives. He says he hopes by the end of May “we’ll know whether we can find something workable or agree to disagree.”

Clark says the aim of the bill is to protect the investment companies make in brand names they trademark. However, the law has generated considerable opposition in the Internet world, even beyond the search engines that profit from paid search. For instance, the Electronic Frontier Foundation, a not-for-profit group focused on Internet-related consumer issues, says the public might benefit from an advocacy group being able to buy an ad exposing a safety issue with a company’s product and that consumers also might want to learn about offers from competitors.

Search engines have different policies on keyword search advertising against trademarked names. Yahoo says it does not allow such search ads. Google does allow them, at least in the United States and Canada. In Europe, where some courts have ruled against the practice, Google removes ads when it receives complaints from companies that own the trademarked names.

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