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Where internet marketing, company names and the rule of law collide

Thursday, 8 May 2008 — by

Company names, slogans and logos can all be legally protected in one way or another. But what about keywords? Where does a company name end and search query begin? In a US law court, of all places…

According to an Ars Technica article late last month, a legal ruling regarding internet marketing might just have set a very remarkable precedent:

“… Orion Bancorp of Florida … not only got a judge to give it the domain name of competitor Orion Residential Finance, it got the judge to agree that if Orion Residential Finance ever buys keyword advertising on the Internet, it must pay for a ‘negative keyword’ that prevents the ads from appearing in conjunction with the word ‘Orion.’”

I was captivated by the various nuanced aspects of the ruling. So much so, I decided to share the article on Pownce. Good job I did, since I managed to attract the attentions of Dave L. of Cleveland, US:

“I’m not a lawyer but part of the ruling makes sense. Two companies in the same industry should not be able to have such similar names. I shouldn’t be able to create a company called Apple Devices and make computers for example.

But the “negative keyword” thing is interesting. Should I be able to create a computer company called “Dave’s Computers” and, to compete with Apple, I buy the keyword “Apple” from Google so adverts for my computers will show up when people search for Apple?

I think people should be able to do that.”

At which point, I chime in with:

“Yeah, I can see what you mean Dave, but what if the first company is operating globally while the other is just pitching at local people?”

After which, Dave replies:

“When you’re dealing with a global company versus a conflicting local company the only real difference I can see is that the global company’s damages, if any, will be smaller.

But I think part of the reason for the law is consumer protection. If I want to buy an Apple computer I should be able to do that without the burden of sifting out all the sound-alike companies. My confusion would be the same whether the company is global or just local.

And I suspect if there was a exemption in the law for small companies every city would sprout sound-alike companies.

Even if I started a small local computer company called Apple Devices, because my name contained the word “Apple”, and I made very clear that we’re not the Apple company that makes the Mac, think of the burden on word of mouth consumer experience?

Suppose my computers were not very good and my customers talk to their friends about this terrible Apple computer they bought. Would it always be clear they meant the guy on Main Street and not the company in California?

I wonder how the case where both companies are limited to different local areas would be handled? It probably never comes up because why would Tony’s Pizza in Delaware bother suing Tony’s Pizza in Phoenix?

What would happen if one of the Tony’s Pizza places became a national chain? Could they then go after the others? There would probably be many Tony’s Pizza’s that existed before the recently expanded one did. That wouldn’t seem fair.

Unfortunately these kinds of laws always require a judgment call. How close is too close? If I was Apply Computers would that be OK? If I was Apple Devices and I make portable radios, would that be OK? Or too much like the iPod? What if I make kitchen appliances?

I am thankfully not a lawyer.

There’s a company called “COBY” that makes headphones and other portable electronic devices and everytime I see one I think “SONY”. Why? Two letters or the same but they start with different letters, and are pronounced much differently.

One similarity though is the exact same type face as Sony. There’s probably an art to naming a company so that it reminds you, at some level, of a company you trust but is not so similar that you get sued.”

Thankfully, I’m not a lawyer, either!

I suppose it’s not surprising such a matter has found its way into a court of law. In many ways, this ruling clears up the blurred boundary between web and law.

However, internationality and legal ignorance will probably mean this isn’t the last we’re going to hear of this particular law…

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