Last week’s search headlines informed us that Yahoo is a charter member of CADNA, the Coalition Against Domain Name Abuse.

The coalition, composed of brand heavyweights, including AIG, Hilton, Dell, Verizon, Wyndham, Marriott, and others, estimates that cybersquatting costs companies worldwide more than $1 billion annually in diverted customer sales and enforcement expenses.

From the Coalition’s home page:

“Since brand-rooted domains attract Internet traffic, the majority of domain names kept by cybersquatters are then used to post pay-per-click (PPC) advertisement links in order to easily monetize visitor traffic.

Internet users who visit these sites find posted lists of “sponsored links” to sites that may be relevant to the industries of the brands infringed. If users click the links that correspond to the intended brands, those brand owners may be charged click fees by search engines that share the proceeds with the domain name registrants.“

THE NEXT PARAGRAPH OF THE COALITION’S STATEMENT HAD ME DUMBFOUNDED:

“These fees add up. PPC sites are among the worst kinds of infringement on the Internet today because they divert traffic likely intended for a brand owner’s site and often monetize this traffic at the direct expense of the brand owner.”

Dumbfounded, because the exact same statement can be used to describe Yahoo:

“Yahoo’s search engine advertising practices are among the worst kinds of infringement on the Internet today because they divert traffic likely intended for a brand owner’s site and often monetize this traffic at the direct expense of the brand owner.”

What I really want to know is how much does Yahoo cost companies worldwide in diverted customer sales and enforcement expenses? Yahoo is, without a doubt, the single largest violator of trademark law online in the United States.

In a trademark lawsuit against Google (Geico v. Google), the Eastern District Court of Virginia found a likelihood of confusion for sponsored listings featuring a trademark in the heading or text of the listing:

“…the district court found that the “extremely high” percentage of respondents who experienced some degree of confusion when viewing these advertisements was sufficient to show that there was a likelihood of confusion present when GEICO’s marks appeared in either the heading or the text of a Sponsored Link advertisement.

Google advised the district court that it had no contrary evidence. Thus, the district court held that GEICO had established a likelihood of confusion and had therefore shown that Google violated the Lanham Act with regard to those Sponsored Link advertisements that included GEICO’s marks in the headings or text.”

Google settled with Geico to avoid a tumultuous threat to their business model and offers an optional trademark policy to trademark holders to prevent forms of infringement.

In a nutshell, this policy provides any entity, whether they are a Google advertiser or not, the right to protect their registered trademarks by halting unauthorized parties from using said trademarks in the heading or text of Google search engine advertisements.

Allow me to illustrate the differences in trademark usage between Yahoo and Google, and I’ll do so using one of Yahoo’s partners in the newly announced CADNA coalition, Wyndham Worldwide (ahem, Susan Crane).

Below is a screenshot of the search “Wyndham” in Google:

Notice the paid search results in Google are ads by Wyndham Vacations (Wyndham-vacations.com) and Wyndham Vacation Resorts (Fairfieldgetaways.com), both Wyndam Worldwide properties and authorized advertisers.

The next screenshot features a search of “Wyndham” in Yahoo:

Authorized advertisers Wyndam Hotels and Wyndham Vacations are prominently visible, but so are several other unauthorized entities.

Yahoo’s policy to allow unauthorized entities to advertise on a trademark-triggered search result, using the trademark in the heading and/or text of the ad, constitutes trademark dilution, specifically the blurring provision as written in the Trademark Dilution Revision Act of 2006.

The provision states:

“Subject to the principles of equity, the owner of a famous mark that is distinctive, inherently or through acquired distinctiveness, shall be entitled to an injunction against another person who, at any time after the owner’s mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.”

By definition:

“…’dilution by blurring’ is association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark. In determining whether a mark or trade name is likely to cause dilution by blurring, the court may consider all relevant factors, including the following:

(v) Whether the user of the mark or trade name intended to create an association with the famous mark.

(vi) Any actual association between the mark or trade name and the famous mark.”

Exclusions:

“The following shall not be actionable as dilution by blurring or dilution by tarnishment under this subsection:

(A) Any fair use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famous mark by another person other than as a designation of source for the person’s own goods or services, including use in connection with:

(i) advertising or promotion that permits consumers to compare goods or services; or

(ii) identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner.

(B) All forms of news reporting and news commentary.

(C) Any noncommercial use of a mark.

It appears that Wyndham would be entitled to injunctive relief in this example. The unauthorized usage of the Wyndham trademark by unrelated entities does not meet the standard of fair use, news reporting or commentary, nor noncommercial use of the Wyndham trademark.

Technorati tags: Yahoo trademark policy, CADNA, trademark dilution