Lawsuits Over Brand Names May Change Internet Advertising

Wire service article from the New York Times, authored by Laurie Flynn. Appeared in the San Antonio Express News, Sunday February 21, 1999; page 5J:

A recent round of lawsuits, including one from Playboy Enterprises, threatens to challenge some fundamental assumptions of Internet Advertising.

Playboy, no stranger to the courts when it comes to protecting its famous brand, is suing Netscape Communications and Excite in an effort to keep banner ads for pornographic, non-Playboy sites from appearing when Web surfers use either Netscape or Excite to look for material with the key words "playboy" or "playmate". Searching for Playboy magazine on Excite, for example, summons a come-hither ad from Tease.com.

Just a few weeks before, Estee Lauder filed a similar lawsuit against Excite, accusing the search service of trademark infringement, "bait and switch" false advertising and unfair competition.

A search for Estee Lauder on Excite, or on Excite's associated search provider, Web Crawler, brings up an ad for the Fragrance Counter - a retailer that Estee Lauder says is not an authorized seller of Estee Lauder products. The Fragrance Counter is also named I the Estee Lauder suit.

Currently, ad sales based on key words account for roughly a quarter of the advertising revenue generated by portal and search sites such as Excite - a category of Web sites that together generated more than $450 million from advertising, according to Jupiter Communications.

If Playboy and Estee Lauder prevail in court, the rules of Internet advertising would need to be substantially rewritten.

"At the end of the day, the search engines are selling advertising against a trademarked brand name and making a profit on it," said Drew Ianni, a Jupiter analyst. "Any change would have an impact on the bottom line."