Why Trademarks Matter in PPC ?
Within digital marketing, Pay-Per-Click (PPC) advertising is an important driver of targeted traffic and brand visibility. Yet as the competition becomes fiercer, the legal framework regarding trademark use within PPC campaigns becomes more important. Using third party keywords in a misappropriating manner—be it within ad copy or as a keyword—may result in legal conflict, monetary fines, or a harmed reputation for your brand. This guide tries to explain where trademarks overlap with PPC advertising. It defines the legal parameters, platform-specific guidelines (such as Google Ads policies), and best practices in responsibly using trademarks. As an advertiser or agency, this roadmap will guide you through compliance while executing successful, legally compliant PPC campaigns.
What are Trademarks in PPC?
Within the Pay-Per-Click (PPC) advertising competitive arena, trademarks are extremely important both for brand identification and regulatory compliance. Advertisers frequently bid on branded keywords—often even competitors’—to promote visibility and traffic. Keyword bidding on third party keywords is generally permitted, but employing those marks erroneously within ad copy violates platform policies or trademark legislation. Such misuse can precipitate legal controversy or engender negative publicity. Search engines like Google and Microsoft have strict policies around using other people’s trademarks in ads. Even misusing your own trademark can confuse users and dilute brand messaging. Being respectful of trademark rights in PPC isn’t only wise—it’s necessary.
Legal Landscape of Trademarks in PPC
Trademark usage in PPC advertising poses considerable legal risks. Brand trademark misuse—particularly when misleadingly used—may result in infringement suits, ad removals, or money penalties. Platforms and courts use the “likelihood of confusion” test to determine violations. This requires examining if the usage of a trademark would confuse consumers into believing there’s a connection or endorsement.
Furthermore, trademark legislation is different depending on the region. For instance, the U.S. places greater weight on consumer confusion, whereas the EU might prioritize unfair competition more. International campaign advertisers need to comprehend and adjust for the differences in laws so that they are compliant across countries.
Google and Microsoft PPC Rulebook
Google Ads (formerly Google AdWords) enables businesses to advertise products and services online by bidding on specific keywords. When users enter a search term in the Google search bar, the engine presents the most relevant results according to its algorithm. Advertisers can bid on keywords so that their ads appear as sponsored links in search results. Google Ads operates on a pay-per-click (PPC) model, where advertisers pay Google every time a user clicks on their ad.
Google Ads permits bidding against trademarked words but prohibits their use in ad copy except where the advertiser is an approved reseller or has a direct permission. Microsoft Advertising uses a similar framework but tends to be more accommodating, especially to resellers and information websites, with more leeway in the usage of ad text.
For instance, Google Ads will allow an advertiser to bid on “Nike” as a keyword but limits the use of “Nike” in ad copy unless the advertiser is a licensed reseller or has Nike’s approval. In terms of trademark usage in PPC, Microsoft Advertising is in contrast more accommodating. Resellers can usually use trademarked terms such as “Nike” in ad copy to refer to their products. While Google Ads helps businesses reach customers, it also opens doors for third-party misuse of trademarks, leading to trademark infringement issues
Risks of Improper Trademark Use in PPC
A company using third party trademarks to divert web traffic to its website can severely destroy the original brand’s reputation in the market. Moreover, it is quite easy and lucrative to misuse third party trademarks online. Let us understand this with an example. Suppose a user wishes to purchase the latest mobile phone but is unfamiliar with the brand’s official website. He will visit the search engine and punch in specific keywords in the search bar. The search engine will present natural search results along with the sponsored links of advertisers bidding on the search terms entered by the user. Trademark law ascertains whether advertising using registered trademarks as keywords amounts to infringement or not.
Google allows third parties to use trademarks in ad wording, provided they use them lawfully. However, there are some differences in the level of restrictions in different geographical regions. In general, there are ways to use third party trademarks in online ads correctly. For instance, resellers offering a branded product online can use a trademark in their advertising copy.
Conversely, incorrect trademark usage in pay-per-click (PPC) advertising can have severe business and legal repercussions. Among the most prominent risks is trademark infringement litigation, which can be a costly affair and harm your business reputation. Moreover, search engines such as Google will disapprove your advertisements or deactivate your advertisement account if you engage in online trademark violations, hindering your marketing campaigns and affecting sales.
In addition to legal and platform-based penalties, trademark abuse may also damage your brand reputation. Your business might be viewed as unethical or untrustworthy by your customers, generating negative publicity and consumer distrust. Ensuring the proper use of trademarks contributes to compliance, penalty prevention, and safeguarding your brand reputation in competitive advert spaces.
Examples of Trademarks Used as Keywords in Advertisements
Informational websites can legally use a trademark or brand name when publishing reviews or product details about a particular brand. For example, Tupperware® partners can advertise and sell products using the Tupperware name. However, if a trademark infringes on the trademark owner’s rights, one can file a complaint with Google to remove the ad, a process that typically takes six to nine weeks. It’s advisable to consult legal experts for further protection steps, both online and offline.
Sellers often use specific trademarked terms or generic keywords as search engine advertisement keywords. For instance, a shoe seller might use terms like ‘footwear’ or ‘sports shoes’ to advertise. These keywords can be generic or descriptive terms, which are often also registered trademarks. While businesses can freely use some generic terms as keywords, unauthorized use of specific trademarked terms can lead to infringement. A notable example is when Matrimony.com filed a case in 2019 against Google for allowing other matrimonial services to use its registered trademarks, like regional names combined with ‘matrimony,’ such as “Telugu matrimony” or “Punjabi matrimony.” The court ruled in favor of Google, noting that the plaintiff used similar keywords and paid for ads. Therefore, owning a registered trademark for generic terms does not automatically entitle one to prevent others from using them as keywords.
Using another company’s name in an ad is called piggybacking, where businesses capitalize on a competitor’s reputation. Courts typically don’t hold search engines liable for ads using third-party trademarks unless there’s a “likelihood of confusion.” The Delhi High Court recently ruled in favor of a trademark owner in such a case, emphasizing that confusion must be established for the case to succeed. Google profits from these ads, leading to lawsuits from brand owners against both the search engine and third-party advertisers.
Case Studies & Examples
Veraz vs. Open Discovery SA
On May 4, 2018, the Division III of the Federal Court of Appeals in Argentina delivered a landmark decision regarding the use of third party trademarks. One of the key elements in the case was the behavior of the defendant (Open Discovery). The defendant used the plaintiff’s widely known trademark “VERAZ” as a keyword to appear on the internet via the advertisement for customers searching specifically for the plaintiff’s trademark.
The decision by the court: In the court’s decision, the act of excessive usage of the trademark was seen as unfair competition. The court issued a resolution, establishing that such behavior amounts to undue use of trademarks as well as an act of unfair competition. Hence, the court awarded substantial damages to the plaintiff for the unfair use of its trademark.
Teve Compras vs. Sprayette & Google
In 2020, Teve Compras filed a complaint against Sprayette and Google, claiming that whenever a user searched for “Teve Compras” on Google, a sponsored link by Sprayette would pop up through Google Ads. The plaintiff regarded this as excessive use of the registered trademark that took advantage of the prestige and diverted its customers to another website.
The decision of the court: The court said that terms like “TV,” “Teve,” and “Compras” (parts of the plaintiff’s trademark) were commonly used words and were describing activities of both the defendant and the plaintiff. Hence, it rejected the complaint.
Through the decision of the court on both of these cases, we comprehend that unfair use of registered trademarks to take advantage of a brand’s reputation amongst consumers can be trademark infringement. However, companies have the right to advertise using generic terms even when they may be registered as a trademark by a competitor.
Defensive Strategies for Protecting Your Trademarks in PPC
In order to protect your trademark in pay-per-click advertising, it is important to use proactive defense techniques.
Begin by continually bidding on your own brand keywords to keep yourself visible and stop competitors from stealing your traffic.
Reporting formal complaints to platforms such as Google and Bing when unauthorized advertisers attempt to use your trademark can also help get infringing adverts removed.
Monitor third-party advertisers and affiliates on a regular basis to make sure they comply with your brand guidelines and are not abusing your trademark. Most search engines have policies designed to prevent advertisers from misleading users by using others’ trademarks in the ad copy, which can cause potential customers to end up landing on your competitors’ site.
As a matter of policy, applying your trademark strategically in ad copy, sitelinks, and extensions can also strengthen brand recall and discourage others from bidding on your terms. Such practices not only help safeguard your brand equity but also lead to compliance and improve campaign performance.
Conclusion
In the competitive landscape of PPC marketing, trademark awareness and compliance isn’t merely a matter of staying out of legal hot water—it’s a matter of upholding brand integrity and consumer trust. Misuse of trademarks can result in penalties, reputational damage, and even lawsuits.
By complying with platform policies, implementing defensive practices, and keeping watchful eyes out, companies can avoid trouble while optimizing the effectiveness of their ad campaigns.
As online advertising advances, remaining aware and mindful of trademark usage will be the determining factor in long-term successful and sustainable marketing.
