Microsoft Adopts Google-Style Trademark Policy for Keyword Advertising

By Eric Goldman

I have gotten several emails relaying this announcement from Microsoft:

We are writing to alert you to some pending changes to the trademark policy within the Microsoft Advertising adCenter Intellectual Property Guidelines. Starting March 3, 2011, adCenter will no longer review trademark keyword complaints. However, adCenter will continue to investigate brand owner complaints related to trademark use in ad text.

We want to make it easier for you to manage your search advertising campaigns. By aligning the adCenter trademark policy with the current industry standard, we hope to help simplify your marketing efforts across the various online advertising programs. Please take a moment to review our updated trademark policy in the Intellectual Property Guidelines so that you may prepare for this change. If you have questions or need further assistance, please contact our support teams.

You can see the policy here.

Microsoft’s reference to “the current industry standard” is interesting. For many years, Google’s trademark policy has differed from almost every other search engine. But since Google is nearly 80% of the keyword ad market, I guess Microsoft can acknowledge them abstractly as the “industry standard” without actually referencing Google by name. Now that Microsoft has adopted Google’s general approach, I assume Yahoo will fall in line next. [UPDATE: as a reader pointed out, now that Yahoo has outsourced keyword ad sales to Microsoft as part of their overall search integration, this policy change automatically applies to Yahoo's search engine as well.]

I’m interested in the timing of Microsoft’s announcement. On the one hand, as I mentioned last year in my “Internet Law Trends” slide, the keyword ad battles–especially against search engines–seem to be winding down, and Google appears to have prevailed decisively. Given that Google has done all of the hard legal work for Microsoft, Microsoft can free-ride on its results. On the other hand, we still have a major pending appeal in the Rosetta Stone v. Google case, and the appeals court could issue a ruling that casts doubt on both Google’s and (now) Microsoft’s trademark policies. I guess Microsoft is willing to take that risk. The good news for Google is that with Microsoft and Google both standardized on the same program, Google doesn’t look like an industry outlier, and it has gained a new and well-financed ally to support its policies.

Although Microsoft’s new policy makes sense to me both doctrinally and as a matter of policy, Microsoft’s decision reiterates how badly it is trailing Google, such that it has to follow the market leader. Microsoft is much more used to dictating terms rather than having to adopt someone else’s. Also, I wonder if this is really just a cash grab. In the past, Microsoft’s margins were so outrageous that it could ignore low-hanging revenue fruit if it wanted to. This development could be a suggestion that those days are over–especially in search, where Bing isn’t profitable, so Microsoft’s online endeavors need every cent they can get to keep up with the Google juggernaut.

Related posts:

* Google Liberalizes Its European Trademark Policy

* Google Liberalizes US Trademark Policy: “What, Me Worry?” Part 2

* Google’s International Trademark Policy Change: “What, Me Worry?”

* Hotels Benefit When Distributors Reference the Hotel’s Trademark in Keyword Ad Copy

UPDATE: World Trademark Review has more to say.