Dozier Internet Law often deals with situations in which a competitor is using another competitor's name, and while this area of law is clearly evolving, the Courts are beginning to understand the nuances associated with the power of this practice for SEO purposes, and reacting appropriately.
An excellent court decision crossed my desk about the August 28, 2008 First Circuit Court of Appeals opinion confirming a judgment for over $400,000 against a small business. The "offense"? Trademark infringement. In particular, the defendant used a competitor's name in its "metatags", and in the content of the site in white lettering with a white background, obviously for SEO purposes. And that is all that was proven. Both the US District Court that awarded the judgment and the First Circuit agreed that both uses infringed on the plaintiff's trademarks.
My guess is that the defendant took the advice of some of the commentators you see online and I suspect, given the other facts of how the case was handled, assumed the Court would conclude there was no trademark infringement. The end result was a judgment for all of the net profits of the Defendant's entire business for the last three and a half years, which was $230,339, plus attorney fees of $188,583, and to add insult to injury, another $7,500 in costs.
Eric Goldman blogs about how "wrong" this decision is. He claims that "metatags don't matter from a technology perspective", citing to his own blog post in which he claims, well..."metatags don't matter". Dozier Internet Law and the Courts, on the other hand, know they do. But this case was also about using a competitor's name in the content, something Goldman missed, I guess.
First, metatag descriptions are used by Google and Yahoo and most search engines. Metatag keywords are used by meta search engines, and other search engines. Anyone with even a passing understanding of search engine optimization would understand that Goldman's off base here and he really does not seem to grasp how SEO and the algorithms of search engines function.
Now, with respect to using competing trademarks in your content, the search engines use those terms to decide when to return a result. So, if someone is searching for Sears, and Walmart repeatedly, and with search engine optimization principles in mind, uses the Sears name on a page of its site, Walmart will come up in the search results when someone is looking for Sears. And thus the problem. If Walmart uses the Sears trademark in the coded title of the page, in an HTML header, repeats it three times, and uses anchored hypertext links with the name to mislead the search engines into believing that a Walmart page is a Sears page, then it becomes more and more apparent what is going on, and the Walmart result will move higher in searches seeking "Sears". There are many other SEO techniques surrounding the Sears name that could be employed, which I won't discuss here. Suffice it to say that the Courts, both the US District Court and Circuit Court, got it right.
By the way, I use Sears and Walmart as an example only. I don't know of any information that suggests either one of these companies is doing this...for what should be obvious reasons to everyone who REALLY understands the law and business of the web.
Obvious, according to the Court decision, even to the Defendant in this case...the Courts found that the defendant "admittedly took these actions because he had heard that Venture's marks would attract people using internet search engines to the McGills website."