Travel agents have questioned the legality of the decision by the brands of Carnival Corp. to prohibit travel agencies from bidding on their trademarks as keywords in online search engines.
Many trademark lawyers suggest that the courts have not set any real precedents on this.
"The law is unsettled," said Lara Pearson, a Nevada-based trademark lawyer. "The law hasn’t caught up with the Internet."
Courts have often found that there is trademark infringement if someone uses a trademark belonging to someone else in commerce.
But what is not clear is whether buying ad space linked to Internet searches for a trademarked keyword can be considered using that trademark in commerce.
On that question there does not seem to be consensus. Ad buyers argue that while a search on the trademark term may cause the sponsored search result to appear, that does not constitute an actual use of the trademarked keyword in commerce.
In any event, Pearson said that in her opinion, the Carnival brands have a good case because "the third party is trading on the goodwill of the brand owner." She also believes that prohibiting the purchase of the keywords is not a restraint-of-trade issue.
"If Carnival said, ‘You can’t use our name on your website’, it would be hard to sell Carnival without their name," she said. "But while purchasing keywords is clearly a commercial activity to promote their business, they can still promote Carnival without purchasing the keywords. It’s a leg up, but it’s not necessary."
When the Carnival brands announced their new policies, they were very clear that it was done to "eliminate confusion" when consumers search for their brands online.
"When a consumer searches for Carnival, they’re seeking Carnival content," said a Carnival Cruise Lines spokeswoman last month. "The goal is to provide the cleanest, straightest path to the most comprehensive Carnival content available, which is on Carnival.com."
This might hint that if this were to be challenged, Carnival would invoke the legal doctrine called "initial interest confusion," which holds that there is trademark infringement if consumers are confused by the information they encounter by searching a trademarked name.
The courts have generally only sided with companies citing initial interest confusion when those companies are competitors. So if Cruise Line A were buying keywords belonging to Cruise Line B, which drove consumers to Cruise Line B, the courts have found that to be illegal.
However, in this case the agents are selling the cruises they are buying keywords for. In a court case brought by a skin products company against a website that bought its trademark as a keyword, a U.S. District Court in Arizona found that there is no consumer confusion if the company buying the keywords is selling the product the keywords represent.
"S & L Vitamins uses Designer Skin’s marks to truthfully inform Internet searchers where they can find Designer Skin’s products," the decision said. "Rather than deceive customers into visiting their websites, this use truthfully informs customers of the contents of those sites. Indeed, in practical effect S & L Vitamins invites Designer Skin’s customers to purchase Designer Skin’s products. The fact that these customers will have the opportunity to purchase competing products when they arrive at S & L Vitamins’ sites is irrelevant.
"The customers searching for Designer Skin’s products find exactly what they are looking for when they arrive at these sites. S & L Vitamins is not deceiving consumers in any way. Thus, its use of the marks does not cause initial interest confusion."
Other travel brands have either mounted prohibitions of trademark keywords in their distribution channels or have taken action to prevent search engines from selling their trademark keywords to third parties. Marriott International issued a similar prohibition several years ago, disallowing online travel sellers to bid on keywords containing Marriott trademarks.
But so far, there is no definitive court decision that has created precedence.
As Pearson pointed out, even if courts did eventually find that what the Carnival brands are doing is illegal, the brands have protected themselves by making this prohibition part of their contracts with travel sellers.
"You can agree contractually to not do something that’s lawful to do," she explained. "Carnival could say, ‘That’s legal, but under our contract it’s not.’ "