SAN JOSE: Some of the biggest Internet search services could be setting the stage for a legal battle with companies that object to the way these sites are using their trademarks, experts at a Web search conference said Tuesday.

Google and Overture Services Inc. have in recent years seen explosive growth from their "paid listings" services, in which companies pay to have their ads run when Internet users key in certain search terms.

More recently, these companies have further improved their paid-listings revenues by suggesting customers bid on other key words, or by running their ads for free with related search terms.

For example, Google or Overture might suggest to an advertiser who pays to use the term "running shoes" to also add Nike, Adidas or New Balance to their search terms, to help them get more visibility. And on Google, the advertiser who bid on the term "running shoes" -- who could be a retailer, a rival shoe-maker or a discounter - might automatically have its ad appear when a customer enters the term "Nike running shoes."

"Arguably, (Google and Overture) are facilitating one of the greatest trademark infringement schemes ever perpetrated," Jeffrey Rohrs, a strategist at digital marketing firm Optiem and former practicing intellectual property attorney, said at Jupitermedia Corp.'s Search Engine Strategies Conference.

Google and Overture both declined to comment for this article.

Web auction site Ebay Inc. in recent weeks sent Google a letter in which it asked the search company not to sell third-party ads that link to search terms with Ebay's name alone, or in variations or phrases.

Some search companies have said they adhere to fair use trademark practices, noting that they are not selling trademarks but allowing advertisers to bid to use them.

According to Google's trademark policy, the company will remove ads if a trademark owner goes through Google's formal trademark complaint procedures. To that end, a search for "Ebay" on Google.com now brings up almost exclusively Ebay-sponsored sites among the top-ranked search results.

"That is a very dangerous precedent that Google set," said Rohrs, who added he would not be surprised if Google eventually changed its policy regarding who is allowed to use trademarked names.

While linking ads to the key word "Ebay" may test the fair use of a trademark, using a phrase like "Ebay alternatives" is a legitimate use, Rohrs said.

Wendy Seltzer, staff attorney for the Electronic Frontier Foundation, agreed. "Everybody needs to use other people's trademarks," Seltzer said.

While no lawsuits have yet been filed to test the laws governing the issue, conference participants said they fully expect one in the future, since Google and Overture have the deep pockets that trial lawyers target.

© Reuters