Friday, March 7, 2008 at 1:28 PM ET
Last year, we told you about a law passed by the Utah state legislature that essentially prohibited search engines like Google from allowing trademarks from being used as keywords to trigger ads. As we wrote at the time, this law ran counter to the precedent of federal trademark law, which has consistently upheld comparative advertising as being good for consumers, competition and free speech.
So if a department store like Macy's wanted to advertise that they sell Nike shoes, under the Utah law they would not have been able to use the term 'Nike' to trigger an ad for their store. Or if Avis wanted to announce a sale, they couldn't use the keyword "Hertz" to trigger ads for people searching for rental cars.
Although the Utah law had not yet been enforced, it represented a big potential problem for consumers and advertisers alike. Consumers would have been prevented from seeing the kind of comparative ads that help them get the best deal possible. And businesses (including small businesses) would have been prevented from advertising products that they sell. For example, if Cole Sport in Park City wanted to advertise that they were running a huge end of season sale on K2 skis, the Utah law would have prohibited them from doing so.
The law also would have hurt free speech, with citizens being unable to run ads in protest of a certain company's business practices, for example.
Fortunately, the Utah legislature amended the bill this week and removed the provisions of the law which prohibited this type of keyword advertising. We applaud in particular Utah Sen. Dan Eastman, who led the efforts to make sure Utah continued to allow competition to thrive online.