Deregulating Relevancy by Eric Goldman

Deregulating Relevancy
(August 2003)
Eric Goldman
Marquette University Law School

Introductory Words About TMs

  • TMs are product source identifiers
  • Goals of TM law:
    • Reduce consumer search costs
    • Protect producers’ investment in goodwill
  • Infringement standard: “likelihood of consumer confusion” about product source
    • Usually determined by a multi-factor test
    • But when consumers aren’t confused at purchase, courts may evaluate goodwill misappropriation

Defining Misappropriation

  • My Goal: Determine when junior users have appropriated too much benefit in situations where consumers aren’t confused at purchase
  • This requires us to separate “association” from “misappropriation”
    • Association = calling attention to content using a keyword/TM
    • Misappropriation = transference to the junior user of good feelings about TM owner
  • TM doctrines like Initial Interest Confusion and Sponsorship Confusion conflate the two

What About Relevancy?

  • When association = misappropriation, relevant content can infringe
    • Non-TM uses
    • Comparative information
    • Commentary/criticism/parody
    • After-market providers
  • This may increase net social search costs
    • TM owner can veto socially beneficial content
    • Some searches must use alternative search terms

Misappropriation from Search Diversion

  • Searchers dynamically assess the cost/benefit of incremental search steps
    • A searcher who has been diverted decides whether to switch or continue
  • In diversion cases, TM misappropriation should occur only when a junior user distorts decision-making because users’ switching costs exceed expected benefits from switch
    • Analogous to bait ‘n’ switch
    • Adjusts with strength of goodwill
    • Creates space for relevant alternative content

Interesting Attributes of Internet Searches

  • Internet searches can lower search costs
    • Availability of filtering content
    • Low extrication costs
    • Comprehensive searches
  • We cannot infer search objectives merely based on a keyword
    • Searches often lack surrounding context
    • Searchers have heterogeneous search objectives
    • Searchers often choose keywords poorly

Preserving Relevancy

  • Eliminate pre-sale goodwill misappropriation except for switching cost arbitrage
  • Use false advertising when appropriate
  • Expect search providers to optimize relevancy
    • Marketer abuses will be curbed by technology and evolved searcher expectations/practices
    • Search providers need a legal safe harbor for advanced relevancy techniques