To avoid court showdown, lawmakers may tweak online trademark registry program

Even a repeal possible after meetings with Web execs
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Legislative leaders are looking to tweak a troublesome trademark protection program rather than defend it in court, after an unprecedented meeting with Internet power brokers who would prefer the new registry be scrapped.

Republicans did not rule out a repeal of the law. Nor did they dismiss the possibility that problems could be dealt with in an upcoming special session. But after Tuesday's meeting on Capitol Hill, lawmakers held out hope that a compromise could be reached.

If not - "There isn't a lot of middle ground here," said House Speaker Greg Curtis - the state must decide if the law is worth a legal fight. And after Tuesday's meeting, lawmakers have a better idea of who they are up against: the Yankees, Patriots, Lakers, Gators and Blue Devils of new media combined.

Senior executives from Google, eBay, Microsoft, America Online, Yahoo, 1-800 Contacts and met with lawmakers in an impressive show of force. And while nothing was resolved during the 90-minute sit-down, lawmakers seemed to accept the inevitable.

"I don't know that we'll repeal it, but we understand we've got some work to do," said Rep. David Clark, House majority leader and co-sponsor of the suddenly controversial legislation.

Curtis was a little more circumspect. "It looks like an all-or-nothing proposition to me," he said.

Under the Trademark Protection Act, set to take effect Monday, companies could eventually register trademarks in Utah and protect them from competitors seeking to buy the right to key off of those brands in Internet searches. While there would be no state enforcement, a registered company could sue the search engine and violator if such ads were triggered in Utah-based searches.

The bill passed the Legislature unanimously despite a warning from legislative analysts that there was a "high probability" of it being overturned in court. The Electronic Frontier Foundation says the law may be in conflict with existing federal laws and is "a dangerous step toward transforming trademarks into monopolies on language" that courts have struck down.

Opponents like Google insist the law would have a devastating effect on Internet users, online speech and Internet commerce. At the meeting, Clark wanted to know why industry leaders waited until now to raise such concerns.

"I wish we had had this interaction with industry 60 days ago," Clark said Wednesday. "We would have all been better off."

Paul Rogers, a lobbyist for AOL and 1-800 Contacts, said he apologized to lawmakers for the inattention. Rogers also said a court fight is less likely after meeting with lawmakers. "We walked away with the clear impression that litigation may not be necessary," he said.

Bountiful Republican Dan Eastman, who backed the bill in the Senate, said the law will go into effect as planned. But no action will be taken to create the registry "while we will work with industry representatives to come up with a specific approach to what we're trying to do."

And what they're trying to do is stop companies from "stealing" trademarked terms to tease and mislead consumers into buying their products. All lawmakers want is for Google to protect other brands the way they shield their own, Eastman said.

If a company tries to buy the trigger rights to the word Google, the following message pops up: "Due to trademark reasons, we do not allow advertisers to use 'Google' in their Google AdWords ads. This term may be trademarked either for a certain product or service category and may apply only in certain countries."

"The Trademark Protection Act was never meant to attack Internet ad-word searches or limit advertising on the internet," Eastman said. "It designed to prevent people from using someone else's trademark to sell their product."

For companies like 1-800 Contacts and Overstock, both of which sell brand-name merchandise at discount prices, the ability to key off trademarked names is integral to doing business - a point lawmakers hadn't considered until now.

"Our input helped the policy makers to see that this legislation needs to be modified and perhaps even repealed," Rogers said. "As the meeting was breaking up, the two sponsors asked us if we would please see if there is a way their intent could be furthered without creating the detrimental impact we were describing. Our response was we would definitely try to do that."