Google's New Trademark Policies Good For Sales, Bad For Legal

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Google (GOOG) has made two changes to its policies regarding trademarks. Combined, they’re good for revenue — they’ll allow more ads in more places, potentially at higher rates. But relaxing rules around trademarks could lead to more lawsuits, such as a recent class action suit in Texas.

  • From a Google blog post: “Under certain criteria, you can use trademark terms in your ad text in the U.S. even if you don’t own that trademark or have explicit approval from the trademark owner to use it,” Google announced. “This change will help you to create more narrowly targeted ad text that highlights your specific inventory.”
  • Broadpoint AmTech analyst Ben Schachter notes in a report today that Google has broadened its policy about trademark bidding. “This resolves the issue of bidding on trademarked keywords (e.g., can Pepsi bid for an ad if a user searches for Coke).” Under new policy, this will be allowed in 190 countries; before, he thinks, it was only allowed in four.

Schachter’s takeaway: “The bottom line is that these two changes will be positive revenue drivers when allowed and into 3Q and beyond, however, we believe trademark holders will undoubtedly, and loudly, raise legal challenges.”

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