http://www.infobeat.com/stories/cgi/story.cgi?id=2558418834-10f 06:30 PM ET 02/11/99 Web Search Sites Sued Over Ads Web Search Sites Sued Over Ads By EILEEN GLANTON= AP Business Writer= NEW YORK (AP) _ Estee Lauder and Playboy Enterprises are aligned in a fight over their good names that could help chart the future of advertising on the Internet. In separate lawsuits, the perfume maker and the publisher say Web sites are improperly selling the advertising that is displayed when someone types in the company's name to search for an Internet site. Advertising linked to search words _ ``keywords'' in Internet parlance _ is a major source of revenue for Web sites, but the legality of using trademarked names hasn't been resolved in court. Estee Lauder sued the Web search site Excite last month in federal court in New York city, saying that such ads infringe upon its trademark, foster unfair competition, and constitute false advertising. The suit seeks an injunction barring the ads. On Excite's Web site, a computer user who types in words ``Estee Lauder'' gets a list of Web pages mentioning the company. Also displayed: A big banner ad for the Fragrance Counter Inc., a small online retailer of perfume and makeup. Fragrance Counter paid Excite for that ad, and for the link to Estee Lauder. Playboy Enterprises sued Excite and Netscape last week in federal court in California and took its complaint a step further than Estee Lauder. Playboy said the sites ``hijacked and usurped'' its good name by linking it to ads for hard-core pornography sites that go way beyond the Playmate of the Month. Internet companies and lawyers are anxiously watching the cases, which could set new precedents in the evolving world of cyberspace law. ``There could be major repercussions for Web companies trying to make money,'' said Drew Ianni, an online advertising analyst for the Internet research firm Jupiter Communications. Keyword advertising sells for an average of $40 for every thousand times the ad is displayed. These ads now account for roughly 25 percent of online advertising revenues, which totaled $2 billion in 1998, according to the Internet Advertising Bureau. Typically, a Web site will link generic words such ``car,'' to a Ford ad or ``recipes'' to a hot new cookbook. However, Ianni estimates about 5 percent of overall revenues come from sales of trademarked keywords. Earlier court decisions have generally given companies the right to an Internet address, using their trademarked name. That means if Estee Lauder wanted to list its Web site as www.esteelauder.com, it could. (The company opted instead for www.elcompanies.com.) Keywords are the latest frontier. ``This is really the second generation of cyberspace law,'' said John T. Soma, a professor at the University of Denver's law school and a director of the Computer Law Association. Some lawyers say Estee Lauder may be able to mount a strong case for its company name. But the cosmetics giant is also fighting to control the use of the words ``Clinique'' and ``Origins,'' two Lauder brand names also linked to Fragrance Counter. ``What if you typed in 'origins' looking for information on Charles Darwin?'' asked Gerald Jenkins, a Chicago lawyer. ``This case raises questions about whether the seller of a keyword will have to keep track of every possible use of that word.'' None of the companies involved would comment on the suits. Estee Lauder does get some benefit from the advertising. A small number of its products are for sale on The Fragrance Counter's Web site, at prices roughly equal to department-store prices. In the end, these newfangled cases may be decided on old-fashioned principles of trademark law. Judges will need to determine whether consumers are confused by the ads, or whether the effectiveness of the companies' trademarks is being diluted. ``If they can show that that their name is being diluted by this use, they could have a pretty good case,'' said John Delaney, co-chairman of the new media practice at law firm Morrison & Foerster in New York. ____________________________________________________________________ -------------------------------------------------------------------- Join The NEW Web Consultants Association FORUMS and CHAT: Register Today at: http://just4u.com/forums/ Web Consultants Web Site : http://just4u.com/webconsultants Give the Gift of Life This Year... Just4U Stop Smoking Support forum - helping smokers for over three years-tell a friend: http://just4u.com/forums/ To get 500 Banner Ads for FREE go to http://www.linkbuddies.com/start.go?id=111261 ---------------------------------------------------------------------
