How Can Smart People Make Such Stupid Laws?

I found this article through Slashdot today, and I’m embarrased to call myself a Utahn. Apparently our legislature has just passed a law that bans keyword advertising. Not all keyword advertising, just the ones that use something that could loosely be tied to a competitor’s trademark. If you’re in the same industry, couldn’t any keyword fit that description?

Apparently the law only applies if the ad is displayed in Utah or the advertiser/keyword vendor is located in Utah. How on Earth does one control that? In reality, every advertiser would have to check a Utah registry before buying keywords that might contain a trademark of a competitor. In fact, the language of the law is even more vague. It defines a trademark as an “electronic registration mark…[a] word, term, or name that represents a business, goods, or a service.” How does the state of Utah possibly expect to enforce this law?

If all this doesn’t spell S-T-U-P-I-D-I-T-Y, the law passed despite the fact that Utah’s general counsel informed the legislature that the law violated the dormant commerce clause.

The bills champion, Dan Eastman, is trying to protect against so-called trademark hijacking, which he refers to as a new form of identity theft. While that is a problem, this is one solution that will never work. The consitutional issues involved are only one massive obstacle in the road, not to mention the lack of support from anyone with a brain (OK, maybe that’s a bit harsh).

The likely outcome is that the law won’t stand up under scrutiny or even a slight breeze, but before we can bury it, our tax dollars will have to pay for the litigation and resulting court cases so the judges can strike it down. Couldn’t the state be doing something worthwhile with our money, like working on the new Real Salt Lake stadium? (And yes, I’m glad the stadium is being built)

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  • Benjamin

    My first thought is, who does Utah expect to carry the burden? Is it up to the big dogs like Google and Yahoo to do a reverse DNS lookup and find out where the search request is coming from? If so, I would be that they’ll just ignore this altogether, wait for Utah to take legal action, and just plan on it being shut down in court.

    If not the search engines, then who’s going to do this sort of filtering…the ISP’s? ISP’s definitely know the geographical location of their users, but how are they going to alter the ad requests?

    Like you Ben, I think I’m trying to figure out what they were thinking, and how they planned on enforcing this law. I’d also be interested to know if it really is a big deal.

    I read the article by Dan Eastman, and his logic sure seems flawed to me. The article he links to in support of his legislation refers to Mazda buying out a keyword for Mazda vs. Pontiac. Thus when people searched for “Pontiac,” they saw the Mazda ad on the top of the paid searches.

    Well, first of all, you can’t buy out natural search positions, which are the most clicked-on search results anyway. Mazda is never going to beat out Pontiac in the natural results in this case…google would go out of business if it did.

    Secondly, now you’re stifling competition? So Apple came out with a great Mac vs PC campaign. Are you going to say that Apple is infringing on Windows trademark because people who are looking for Windows ads might see the Mac vs PC campaign and buy a Mac instead?

    Give me a break. That’s not “carjacking” someone’s trademark, it’s not “shanghai’ing” someone’s searches…it’s competition and creative marketing – ***and it’s been around since the beginning of free enterprise***.

    Now, what would be wrong is if someone had falsified their links and made users think they were going to but really directed them to – that’s phishing, and is very illegal. But using creative marketing tactics to compete is what capitalism is all about.

    I’m very proud of our Utah legislature and all they do for starting businesses, but I have to say I’m disappointed in this one.