Steven Bradley of TheVanBlog wrote “Stealing Customers Through Google Maps” which brought up something I have not looked into much before - whether or not using a competitor’s name to steal customers is legal.

Is Using a Competitor’s Name to Steal Customers Legal or Illegal?

There is no doubt it is not very nice. In fact, were you to meet your competitor on the street after he found out what you are doing he might prefer to sock you in the face as opposed to shake your hand for your great sportsman-like act of using his name to steal fair customers. Fairness aside; is it legal?

First, be clear that I am not a lawyer but off the top of my head (and from those undergrad and grad biz law classes), the legality should have more to do with how the competitor’s name is used and treated as opposed to the act of using the name alone. Let’s create three examples where you use a competitor’s name (Brand X) as paid a keyword in your PPC program. “Brand X” is searched and…

1. the ad copy is something like “Excellent alternative to Brand X” then the honesty and intent is clear and the ad should be legal.
2. the ad copy does not use the competitor’s name OR your name and only mentions products and contact information then the ad is in a gray area I won’t touch with a ten foot pole. Confusing.
3. the ad copy includes the competitor’s name and is even presented as being placed BY the competitor then you might be taking part in fraud.

Here is a quick article on the legality of the topic of using competitors’ names as keywords in PPC marketing from the Business of Software.

“Trademark Infringement Issues for Pay-Per-Click (PPC) Advertisers” from Ezine Articles includes an overview of MSN, Yahoo, and Google’s policies on PPC trademark bidding, a case study on the subject, and suggestions for how to deal with it if you think a competitor is using your trademark.

Joe Agliozzo is the SEM Lawyer (he is actually a lawyer). In “Trademark Infringement in PPC Advertising”, he goes over some basics of PPC trademark infringement and says:

What you can’t do is pose AS American Blinds to steal their customer - but there is nothing wrong with putting your ad up there along with American Blinds’ ad so that the consumer can compare your offering with theirs.

This is a PPC trademark lawsuit case study from Eric Goldman of the Technology & Marketing Law Blog. The article is a detailed and very interesting discussion of the points of a case between the owner of the trademark and the actual PPC advertiser who used the keyword in its marketing. Usually the search engine is the defendant.

Using Competitors’ Names is Recommended?

Mistake #17 in “17 Most Common PPC Mistakes Web Marketers Make” is Avoiding Brand Name Keywords:

… anyone searching for your competitor could easily be your customer instead. Why not have your ad show up under that keywords? What if they are still shopping around? What if they are searching for your competitor’s name because they saw their TV or radio ad. Bottom line is, bid on your competitor’s brand names. Most of the time the ROI on those keywords is excellent. If you get a “legal letter” from the competitors and it holds water, I’d suggest comply with it.

I will look more into this but, for now, it seems the best idea, legally speaking, is to use the Golden Rule, which you should be doing anyway.

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