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Sponsored Ad Drama in theYarn World

January 6th, 2010

On Ravelry today, I stumbled across a forum thread discussing a recently filed lawsuit between Cascade Yarns and KnitPicks. (Full suit information here).

I won’t lie to you. I skimmed the forum posts and clicked through to the lawsuit, assuming it related to KnitPicks’ reputation for ‘knocking off’ designer yarns at lower prices. (Ironically enough, some might say the same about Cascade.) Cascade and KnitPicks have also been at odds for some time, with at least one previous trademark related lawsuit which was dismissed when KP voluntarily changed the name of the offending product.

This one is something new. It specifically relates to one business booking a sponsored ad for a competitor’s keyword, something that the business has never – and likely will never – carry.

In this case, Cascade’s suit is based on Knit Picks sponsored ads appearing for web searches of trademarked terms, “Cascade”, “Cascade 220″, “Cascade Yarns”.

I doubt this practice will benefit KP in the long run. There’s little more frustrating to a possible consumer than clicking through an ad to see no evidence of what was sought. For me, at least, it would devalue my opinion of the brand, and I’d be even less likely to click on future ads from the business, believing them to be a waste of time.

Whether or not it’s ethical, should it be legal?

Techcrunch has an article about a larger Google AdWords lawsuit. Rescuecom vs. Google complained of exactly this practice of selling ads on trademarked keywords to competitors. A final decision has not been reached, and the case is likely to go to trial unless there’s an out of court settlement.

More than anything, I think the results of these lawsuits (and probably countless similar ones) could change the way we think about search engine use, both as consumers and as web developers. And does the responsibility lie with the search engine to police their paid advertising links? Or with the advertisers themselves to “play fair”? Or, is it simply Cascade’s fault for not buying the keywords already?

I’m trying to think of a scenario in the non-webby world where using a competitor’s trademark would be ok. There really are few ‘keywords’ in real life. And the law seems pretty clear that one can’t use the word “Kleenex” to advertise facial tissue not made by Kimberly-Clark. Likewise, you’re not generally allowed to operate a business under a name that could be confused with a trademark holder in the same line of work. KnitPicks went after KPixie (formerly KnitPixie) for the same thing several years ago.

What do you think? Should it be legal to buy paid ads on a competitor’s keywords or SEO your site for a competitor’s product?

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10 Responses to “Sponsored Ad Drama in the Yarn World”

  1. Kristen Says:

    I googled “cascade yarns” and got cascade and its sellers. I went to Yahoo and ran the same search, and Knit Picks was the first result, right at the top. The descriptive line didn’t say they carried Cascade, but it was the *first* result.

    If I weren’t a knitter already in the know, I might actually click on that link to look for Cascade yarns, and then I’d be ticked off at Knit Picks for lying about their stock.

    I certainly don’t think it’s Cascade’s fault for not buying their own keywords.

  2. rj Says:

    Well, people use the word “fridge” to refer to a refrigerator, but I think that’s an abbreviation of the word “Fridgidaire”.

    Aspirin was once branded. I don’t have a bottle of Bayer’s product, or St. Joseph’s aspirin for children… otherwise I would be able to confirm the presence of a registered mark or not. Search engines seem to use aspirin interchangeably with headache medicine now. (Just did a quick Google search and all sorts of wacky things came up, in addition to lawsuits re: drug side effects.) The original makers of Aspirin lost their brand.

    People refer to hoovering (using their Hoover, of course). The list goes on. But these are all regional things. And of course there’s also a Hoover Dam. Check out the OED if you want some other ideas of brands that passed into common language. Not all of these are OK changes of trademark infringement, but there does seem to be a legal basis of when something stops being a trademark and starts being a common word.

  3. Love and Laughter,Amy Says:

    this has been going on since I was developing web sites in 1993. People would load their text and tags with the competitors name to get the eye balls of people who didn’t know to search for them.

    the real world application of this is when you go to the grocery store and you buy one brand of something and get a coupon for the competitor with your receipt.

    the only thing new about this is the lawsuits.

    I don’t think there should be a law and I don’t think it should be illegal. mostly it’s just bad business. rarely have I been moved to buy something from these solicitations. in fact the opposite is normally true. I doubt I’m alone in this.

  4. Karen Says:

    If I go into the grocery store and ask where the Diet Coke is, they tell me what aisle it’s in. If I ask where the soda is, they tell me the same aisle. As a real life keyword search, I get a lot more information than I need and I have to read the Pepsi and Fanta labels on my way to the Diet Coke. I’ve also been into stores expecting to purchase one brand of an item and then choosing another because it better served my needs and budget. And how many times have you gone into a yarn shop asking for, say, Lamb’s Pride Worsted and had the shop owner mention that they just got in a new, say, Berrocco worsted weight yarn. I wouldn’t have been able to make that choice unless I was exposed to the other brands.

    Also, Cascade doesn’t sell direct to consumer so to purchase their yarn online, you have to go to a third parties online store where you will probably be exposed to other brands of yarn.

    Competition is good for markets. It helps keep quality high and price low. Unless KnitPicks use of the keyword blocks Cascade from using the keyword (which I don’t think is the case) or if KnitPicks is using a name that’s way to similar to Cascade’s trademarks, then let the consumer make the final choice. If I specifically want a Cascade yarn, I’m going to buy a Cascade yarn. If I’m searching for Cascade because it’s the only one I know about, then I appreciate being exposed to other products.

  5. Knit Nurse Says:

    My partner insists on talking about doing the ‘vacuuming’ as he we have a Miele, not a Hoover! …although of course it would be even better if he actually did it, rather than just talking about it ;-)

    Reading about these kind of tactics, which strike me as rather underhand even if they are not illegal, just makes me more likely to avoid buying from the perpetrator.

  6. Kasey Says:

    From a legal standpoint, it looks like KnitPicks hasn’t technically done anything wrong. Generally the rule is whether a reasonable person would be confused about what is being purchased, and KP doesn’t have a yarn called Cascade or 220 or anything like that.

    Personally, I think there *should* be laws against this kind of attempted deception, but the law is usually about 5-10 years behind technology. Regulating the internet is always tricky business because it crosses so many borders – If State X passes a law banning this abuse of SEO, would it mean that no companies based in State X may do this, or would it be designed to protect customers located in State X against deceptive practices by companies in all states?

    I am curious about something you said, though – KP has a reputation for “knocking off designer yarns”. How precisely does one ‘knock off’ yarn? Unless we’re talking about some kind of unique colourway or a brand new texture of yarn…a skein of navy superwash sock yarn isn’t something originally by a particular designer/company that could be knocked off, is it?

  7. amy Says:

    re: knock-offs… I can’t count the times I’ve heard shop owners from the area complain about KP staff coming in, scoping out new arrivals, and shortly producing something really similar to an existing line. And no, there’s really nothing specifically unique comparing KnitPicks Wool of the Andes with Cascade 220 with say, Plymouth Galway either. Worsted weight wool with 12(?) plies, non-superwash, etc. So maybe “knock-off” is the wrong word. (And Cascade has had complains of doing similar things with Debbie Bliss cashmerino aran, for example.)

    Tricky stuff.

    I think that the issue here comes down to the legality of buying ad property based on someone else’s trademarked keyword.

  8. Marcy Says:

    I just typed in Cascade Yarns in google and nothing untoward came up. But then I went to dogpile and did the same thing. Something interesting came up. The fifth entry down said Classic Elite Yarns and underneath in smaller letters it said knitpicks and mentioned it was a sponsored link. So, not only is Knitpicks doing it to Cascade, they are doing it to Classic Elite.

  9. Terry Weber Says:

    Hello, one of my Internet Marketing students used this debate in our discussion of Negative Buzz. I want to clear up one point of confusion. Even if Cascade buys the keywords Cascade 220, (which I am sure they do) all the other companies can still buy that same keyword. Google and the other search engines will still sell that keyword to anyone! The question is should the search engines treat trademarked keywords differently than any other keyword? Should they be limited to selling the trademarked keywords only to the holder of the trademark? As Kasey says, the law is usually about 5-10 years behind the technology.

  10. Lauren Says:

    Quite frankly, given my personal experience with Knit Picks, I am absolutely not surprised.
    This company enjoy a fairly high reputation among knitters despite its pretty unethical business practices along with its appalling customer service.

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