The use of a competitor's trademark as a keyword triggering your sponsored link ad may be problematic. As of today (August 2006), the US case law in this regard is not conclusive. In Israel there is one recent judgment of the Tel Aviv District Court in the matter of Matim Li v. Crazy Line and Google (click here to go to our review of the judgment in the Israeli case law section of the website). In this judgment, Justive Altuvia ruled that there is nothing wrong in this practice. Nevertheless, we believe that trademark proprietors may try to overturn this ruling (also in other cases on this issue), and this issue might reach the Supreme Court, and until then it is not safe to say that the case law in Israel is conclusive. Thus, it might be a dangerous act on the part of an advertiser to use this practice, since it may lead to potential claims against it. Also, if the search engine is dragged into such legal action, the contractual relationships between search engines and advertiser usually provide that the advertiser is solely responsible with respect to such circumstances that lead to a claim, and is also responsible to indemnify the search engine for its costs in this regard. Thus, when the search engine and advertiser are both dragged into a claim, eventually if liability is found, the advertiser will bear the full responsibility.
In view of the above, advertisers should take these risks into consideration and take a conscious calculated business decision in this respect.