Is Google going to ban trademark bidding?

What a fascinating question. Trademark bidding is a fuzzy topic because while on first blush it seems obvious that only a trademark holder should be able to bid on a trademarked word, it’s not quite that simple. For example, did you know that the word "Tommy" is trademarked? Not only that, there's more than one trademark that's been granted for this word, one of which is to the clothing manufacturer Tommy Hilfiger.

So does that mean that you can't bid on the word "Tommy" if you want to sell your new Tommy Tunes kid Telephone? What about if you're one of the other Tommy trademark holders? For that matter, what if you're trying to advertise "used ipods" or "refurb razr cellphone" ("ipod" and "razr" are both trademarks).

You can see it's not as clear-cut as Yahoo suggests with its ban. Worse, the reason that Yahoo is apparently trying to ban trademark bidding is to prevent competitive advertising. But isn't that one of the main values of a keyword-based advertising system, so you can put up enticing ads to try and sway someone's purchase of a competitive product or service?

In the United States, the courts have upheld competitive trademark bidding, as referenced in the Google ad keyword bidding policy. Given that policy, and given that it's backed by legal precedent, I think it's fair to say that Google won't be adopting this policy any time soon.

I'll go out on a limb: I think that Yahoo will abandon their ill-thought out policy too. A basic premise of capitalism is "may the best vendor win", and we see it every day with gas stations on four corners of an intersection, three shoe stores adjacent to each other in the mall and even a half-dozen cereals on the same shelf in the supermarket. I don't why online advertising should be any different.