The practice of paid search conquesting--bidding on competitor brand names as keywords to intercept their potential customers--has been a controversial but common digital marketing tactic for years. Recent federal appellate court decisions have provided significant clarity on when this practice crosses legal lines, offering advertisers more confidence in their paid search strategies while establishing clear boundaries that must be respected.
In October 2024, both the U.S. Court of Appeals for the Second Circuit and the Ninth Circuit issued published decisions rejecting trademark infringement claims based on advertising in keyword searches. These rulings create a greater possibility that brands engaged in paid search advertising will be able to defend against trademark infringement claims, while also providing practical guidance on how to implement competitor keyword campaigns without legal exposure.
Understanding these legal parameters is essential for any comprehensive SEO strategy that includes paid search components.
The Legal Landscape
2
Federal Circuits Ruled on Keyword Bidding (2024)
0
Trademark Infringement Claims Succeeded
100%
Keyword Bidding Upheld as Legal Practice
Understanding Paid Search Conquesting
Paid search conquesting, sometimes called "competitive keyword bidding," involves an advertiser bidding on keywords that include a competitor's brand name or trademark. When a consumer searches for that competitor's brand, the bidding advertiser's ad may appear in the sponsored results section alongside or above the competitor's own advertisements. This tactic allows advertisers to insert themselves into a customer's search journey, presenting an alternative option at the precise moment the customer is actively seeking a solution.
The practice has become increasingly common as digital advertising has matured and competition for search traffic has intensified. When executed properly, conquesting can effectively capture high-intent traffic that would otherwise go directly to competitors. However, the legal landscape has historically been unclear, leaving advertisers uncertain about whether their campaigns might expose them to trademark infringement liability.
The competitors whose trademarks are used as keywords are rarely happy to see another brand "crashing the search engine optimization party." This tension between aggressive marketing tactics and trademark rights has produced years of litigation, with courts gradually developing the legal framework that now governs competitive keyword bidding.
Our paid search advertising services can help you implement compliant conquest strategies that capture high-intent traffic while respecting legal boundaries.
The Landmark Court Decisions
1-800 Contacts v. Warby Parker (Second Circuit)
The Second Circuit case involved Warby Parker's purchase of Google search engine keywords consisting of 1-800 Contacts' trademarks, including "1-800-CONTACTS" and related variations. When consumers searched for 1-800 Contacts, the first sponsored result was a Warby Parker advertisement: "15% Off First Contacts Order -- 90 Daily Contacts for Only $55."
The Second Circuit analyzed three distinct aspects of Warby Parker's conduct: the purchase of keywords, the resulting advertisement copy, and the linked landing page. 1-800 Contacts alleged that Warby Parker's actions constituted trademark infringement and unfair competition, focusing on all three elements.
The Court of Appeals established several critical principles. First, the court noted that bidding on competitor trademarks for keyword search advertising is a standard and permissible practice. Advertisers often outbid competitors for certain keywords, including competitor trademarks, to boost ad placement in the sponsored section of search engine results. The Second Circuit reiterated that the mere act of purchasing trademarks for search engine optimization does not itself constitute trademark infringement.
According to the Goodwin Law analysis of the Warby Parker case, the court concluded that "this well-known marketing strategy--standing alone--cannot support a claim of trademark infringement absent additional use of 1-800's trademarks." This represents a significant victory for advertisers who use competitive keyword bidding as part of their paid search strategy.
Lerner & Rowe v. Brown Engstrand (Ninth Circuit)
In the Ninth Circuit case, searches for the law firm Lerner & Rowe first yielded advertising for the Accident Law Group, which had bid on the competitor's firm name as a keyword. The competitor sued, claiming that consumer confusion was likely.
As noted by Katten Muchin Rosenman in their analysis of both decisions, while the Ninth Circuit case progressed to discovery and summary judgment--with statistical and expert survey evidence being crucial to the discussion of whether actual confusion existed--the outcome reinforced the Second Circuit's conclusions. Both courts have recognized that purchasing a competitor's name or mark as a keyword is not likely to cause confusion, especially when the resulting ads do not use the competitor's trademarks.
A particularly noteworthy aspect of the Ninth Circuit decision was a concurring opinion by Judge Roopali Desai, who recognized the difficulty of the likelihood of confusion analysis in these cases. She wrote that given "the predominance of the internet in our lives, this type of advertising has become commonplace. Scrolling through sponsored ads at the top of a results page is often the rule--not the exception--when using a search engine. The familiarity of sponsored ads to those navigating internet platforms makes the likelihood of confusion inquiry difficult, if not impossible, to satisfy."
These rulings align with broader multi-platform SEO considerations where brands must navigate competitive visibility across search and social platforms.
Why Keyword Bidding Alone Isn't Infringement
The Hidden Nature of Keywords
A fundamental principle underlying these court decisions is that keywords purchased for paid search advertising are hidden from consumers. When an advertiser bids on a competitor's trademark as a keyword, that keyword is used internally by the advertising platform and is never displayed to the consumer conducting the search.
From the consumer's perspective, they see only the sponsored advertisements that appear in their search results. They have no visibility into the keyword auction process or which specific terms triggered the ads they see. This distinction between internal keyword usage and external consumer-facing content became crucial to the courts' analyses.
The Second Circuit emphasized that the surrounding context of an ad is critical in determining whether consumers are likely to be confused. When reviewing Warby Parker's paid advertisement, the court noted that while Warby Parker's banner did not contain Warby Parker's trademark, the URL link to Warby Parker's homepage (warbyparker.com) clearly indicated the source of the ad.
The Ad Context Matters More
The courts consistently held that what advertisers display to consumers--the ad copy, the display URL, and the landing page--is far more relevant to trademark analysis than which keywords triggered the ad. As long as advertisers do not use competitors' trademarks in their actual advertisements, the likelihood of consumer confusion is significantly reduced.
In the Warby Parker case, the banner for the ad did not contain any indication of source. The paid ads did not display Warby Parker's house mark WARBY PARKER or any of 1-800's trademarks. Rather, the ad was silent about the entity behind the ad and instead consisted of promotional slogans such as "15% Off First Contacts Order -- 90 Daily Contacts for Only $55."
The court further highlighted that the word "Ad" immediately preceded Warby Parker's ad copy, signaling to consumers that the link following was a paid advertisement. Taken in totality, the surrounding context of Warby Parker's paid ad clearly labeled Warby Parker as the source of the advertisement.
Understanding these nuances is essential for effective PPC management that maximizes reach while minimizing legal exposure.
Practical guidelines based on court rulings
You CAN Bid on Competitor Keywords
Bidding on competitor brand names and trademarks as keywords is permitted and does not constitute trademark infringement by itself.
You CAN Appear in Sponsored Results
Competitors' search traffic can be intercepted through properly labeled sponsored advertisements.
You CANNOT Use Trademarks in Ad Copy
Never use a competitor's trademark or brand name in your advertisement copy, headlines, or descriptions.
You CANNOT Use Trademarks in URLs
Avoid using competitor trademarks in your display URL or destination URL that consumers can see.
You MUST Identify Your Brand
Ensure ads clearly identify your company through branding, logos, and distinctive elements.
You MUST Use Distinct Landing Pages
Landing pages should prominently feature your brand and not mimic competitor websites.
Implementing Competitor Keyword Campaigns Safely
Campaign Structure Recommendations
Organize your competitive keyword campaigns to maintain clear separation between your own brand terms and competitor conquest terms. This makes it easier to apply different ad copy and landing page strategies to each category.
Consider creating dedicated ad groups for competitive conquesting with carefully crafted ad copy that emphasizes your brand identity without referencing competitors. Your advertisements should stand on their own merits rather than piggybacking on competitor brand recognition through visible trademark usage.
Build out campaign-level negative keyword lists to prevent your conquest ads from appearing for certain modifier terms or close variants that might create unintended associations or confusion.
Documentation And Monitoring
Maintain documentation of your campaign structure, ad copy review processes, and landing page review procedures. While this documentation may never be needed, it demonstrates good faith efforts to operate within legal boundaries should any questions arise.
Monitor your advertisements regularly to ensure they remain compliant over time. As campaigns evolve and new ads are created, it's easy for potentially problematic language to slip through. Regular reviews help catch issues before they become legal problems.
Track any complaints or communications from competitors regarding your paid search campaigns. While the courts have ruled favorably on keyword bidding, competitors may still send cease and desist letters or initiate litigation. Having documentation of your compliant practices provides important evidence in any dispute.
Legal Review For High-Risk Campaigns
For advertisers in particularly litigious industries or those planning aggressive conquest campaigns, consider having legal counsel review your campaign structure before launch. A trademark attorney can evaluate whether your specific approach raises concerns based on current case law and industry practices.
This investment is particularly worthwhile when campaigns will target well-known brands with reputations for aggressive trademark enforcement, or when the advertiser's own brand position makes confusion about affiliation more likely. Our comprehensive SEO services include strategy consultations that help you navigate these complexities.
Additionally, understanding how branded keyword strategies can protect your own brand presence while you compete for competitor terms is essential for a balanced search marketing approach.
Common Mistakes That Trigger Liability
Using Competitor Trademarks In Ad Copy
The most common and dangerous mistake is incorporating competitor trademarks directly into advertisement text. This crosses the line from hidden keyword usage to visible trademark usage, which the courts have treated differently under trademark law.
When you include a competitor's brand name in your headline, description, or display URL, you are making a "use in commerce" that consumers can see. This visible usage is much more likely to be found to cause consumer confusion, particularly if the ad could be interpreted as implying sponsorship, affiliation, or endorsement by the competitor.
Even seemingly innocuous phrases like "as seen on" or "competing with [Competitor]" can create legal exposure. Avoid any mention of competitor brands in your external-facing ad content.
Ambiguous Landing Pages
Landing page design matters more than many advertisers realize. The Warby Parker case demonstrated that courts will examine whether landing pages create confusion about source or affiliation. While Warby Parker ultimately prevailed, the case illustrates that landing page design can become a significant point of contention.
Be cautious about creating landing pages that deliberately mimic competitor site layouts, use similar color schemes or visual elements, or structure content in ways that could confuse visitors about where they have arrived. Your landing page should clearly establish your brand identity within the first few seconds of arrival. Our web development services can help you create distinctive, brand-forward landing pages that convert paid traffic effectively.
Ignoring The Ad Context
The courts emphasized that surrounding context is critical to the confusion analysis. Advertisements that appear in clearly labeled sponsored sections, with visible destination URLs identifying the advertiser, and leading to branded landing pages are much less likely to cause confusion than ads that lack these clarity elements.
If you are using competitive keywords, ensure your campaigns include all elements that help consumers understand they are seeing a paid advertisement from your business, not an organic result or an endorsement from the searched brand.
Our conversion rate optimization services can help ensure your landing pages clearly communicate brand identity while maximizing the effectiveness of your paid traffic.