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Microsoft has recently tested a new system of advertising whereby ads are not placed on top of the organic search results, nor to the side, nor on a colored background, but actually within the list of organic results.  Is this a smart move?  Will Microsoft find itself on the end of a (meritorious) lawsuit for trademark infringement or unfair competition?  Probably not. 

The news of this new approach broke on the RKG blog, and was subsequently confirmed, with comment from Microsoft, on the Search Engine Land blog.  I learned of it via a tweet from Austrotrabant.

According to RKG’s findings, Bing has been testing the placement of ads as follows (though I don’t know of anyone being able to recreate this, either in Europe or North America):

Bing's ads in organic results

How the ads for custom t-shirts appeared on Bing's test layout (as found on the RKG blog)

Commentators have had mixed reactions.  Austrotrabant says it is “a dangerous road” for Microsoft and that Microsoft will face court action for trademark infringement since he believes an ad in this layout will most likely affect the trademark’s function of indicating origin, and might also be unfair competition.

I’m not convinced.

Firstly, there is no indication that Bing intends to sell trademarks for these ads, since I’m pretty certain that “custom t-shirts” is not a registered mark, anywhere.  But secondly, and regardless of the first point, this layout (in Europe at least) is the natural consequence of last year’s ECJ ruling in Google France which held that ad service providers such as Google and Bing are not “using” the trademarks selected by advertisers and therefore no registered trademark infringement claim can stick against them in respect of their sale of those trademarks as keywords.  So Microsoft (and Google, should it follow) is in the clear on that one.  Regarding unfair competition and possible secondary liability claims for registered trademark infringement, I think they would be hard to prove given the always increasing sophistication of Internet users and the significant differences between the ad results and their surrounding organic results.  There is also the possibility that the safe harbours of the E-Commerce Directive would negate any prima facie liability under any of the above heads of claim (although I don’t believe it’s a given that they would apply).

What do you think?  Would the above image mislead you?