TechLaw

In the end, Utah's on-again, off-again attempt to repeal a 2007 law that gave trademark owners a cause of action against rivals and search engines for deploying electronic advertising triggered by a trademark turned out to be no more than the latest skirmish between long-time combatants on this issue.

The Utah Senate passed S.B. 151, a bill repealing restrictions on trademark-triggered electronic advertising, on Feb. 6. On March 4, just when it appeared that the Utah House would approve the S.B. 151, a substitute measure was offered and approved. Backers of the substitute measure were seeking to preserve Utah's restrictions on trademark-triggered advertising. Their bill limited the trademark owners' cause of action to suits against direct competitors; additionally, the House-passed bill made changes to address commerce clause concerns and to require advertisers to conspicuously display the phrase "Paid Advertisement" alongside search-triggered advertising.

The competing bills were sent to a conference committee March 5, the final day of the legislative session. Forces seeking to preserve some sort of restriction on trademark-triggered advertising were defeated in the conference committee. The original Senate measure, sponsored by Sen. Dan R. Eastman, eventually emerged from the conference, and both houses quickly approved it. S.B. 151 now awaits the governor's signature.

BNA asked its Utah correspondent Tripp Baltz to find out what happened. Tripp talked to nearly everybody involved in the matter and, while I am not going to give away his story before we publish it, I will say that Utah's struggle to do something about trademark-triggered advertising is longstanding and heartfelt. And it didn't end on March 5.

For the tech industry, lobbyists from Google, Microsoft, Yahoo! and America Online have been working in Utah ever since the state passed the country's first anti-adware legislation in 2004. From what we hear, the tech industry leaned very hard on Sen. Eastman to get S.B. 151 introduced and passed in the Senate. They might have prevailed on Sen. Eastman with reasoned policy arguments, and they might have suggested that Utah's current law was ripe for constitutional challenge.

The other side of the debate was represented most vociferously by 1-800 Contacts of Draper, Utah, and -- behind the scenes -- by Rep. Stephen H. Urquhart, the sponsor and chief defender of Utah's 2004 anti-adware legislation. Both of these folks walked away with nothing March 5. It seems unlikely they will not be heard from again.

Utah politics aside, 1-800 Contacts has also been active in the courts, most notably in the case of 1-800 Contacts, Inc. v. WhenU.com Inc., 414 F.3d 400 (2d Cir. 2005), in which the Second Circuit held that Whenu.com's trademark-triggered display of pop-up ads for rival goods was not an actionable use of the mark. More recently, 1-800 Contacts sued a rival contact lens vendor for purchasing search engine keywords containing its trademarks. See 1-800 CONTACTS Inc. v. LensWorld.com Inc., D. Utah, No. 08–15, complaint filed 1/8/08.

Counsel for 1-800 Contacts told Tripp that American Airlines and American Blinds -- two other companies that have pressed their case against trademark-triggered advertising in court -- also urged legislators to support the House-passed version of S.B. 151.