Google Warns State of Utah on New Law

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SALT LAKE CITY — A new Utah state law that curbs keyword-triggered advertising is unconstitutional and probably will be challenged in court, Google officials said.

The law was created by Unspam Technologies CEO Matthew Prince, the same brains behind the controversial child-protection registry, which requires adult companies to submit their email lists to be "scrubbed" of e-mail addresses to which minors could have access. The Free Speech Coalition currently is challenging the registry in court.

As for the Utah law, Google did not confirm it would be the one to bring the law to court but does plan to work with other Internet companies to show Utah officials why the law hurts consumers, violates free speech and is inconsistent with both established U.S. trademark law and the U.S. capitalist system, Google spokesman Adam Kovacevich told The Salt Lake Tribune.
The law, named the Trademark Protection Act, initially was doubted to pass, because of the possibility of litigation. But it showed up late in the Utah Legislature’s session and passed with almost no opposition. Unless a special session surfaces or a court injunction is placed, the law will take effect June 30.

The law would work like this: companies that register trademarks in Utah will be protected from competitors looking to buy the right to get a sponsored link to show up right above the search results, from a keyword you put in the search box.

For example, if you type Overstock.com into Google's search engine, you will get sponsored links to SmartBargains.com, Buy.com and Webspawner.com. The new law would allow Overstock to sue the search engine and the competitor if such ads do show up in Utah-based Internet searches.
“Competition, which generally helps lower prices and benefits consumers, is fueled in part by companies being able to use advertising to draw contrasts with their competitors," Kovacevich said.

But Rep. David Clark, R-Santa Clara, Utah, the House sponsor of the law, argues that the law "places Utah in the front of the pack of U.S. states in trademark protection…I'm sorry they feel it's still the Wild West on the Internet," he said of Google and bloggers who have been blasting the law.
If litigation does occur, it shouldn’t surprise Utah legislators, as they were warned by their own lawyers. A legislative review note said the Trademark Protection Act had a "high probability of being found unconstitutional," according to the State Tribune.

And even Prince thinks the state will probably get sued. "I warned them during the session that this would make Google mad," he said.