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Focus: Use of another's trade mark in search engine marketing

28 October 2009

In brief: While a recent opinion of the Advocate General to the European Court of Justice indicates that use of another's trade mark as a keyword in search engine marketing will not, of itself, constitute trade mark infringement in Europe, the position in Australia remains unsettled. Lawyer Nicholas Tobias reports on the aggressive and defensive uses of search engine marketing that can promote or protect a business's reputation.

How does it affect you?

  • Businesses should be alert to the practice and associated risks of using trade marks in search engine marketing, so that they may explore how best to promote their own brands while appropriately responding to competitors' shrewdly targeted advertising.
  • The Advocate General's opinion1 is particularly favourable to Australian businesses seeking to increase their exposure in Europe.
  • Keywords that are identical to Australian trade marks should not be purchased without first seeking advice.

Search engine marketing

Search engine marketing involves the display of advertisements relevant to searches conducted on search engines. Keywords are auctioned off, with the highest bidders receiving advertising space on the page on which the search results for the keyword are displayed. Each advertisement contains a hyperlink to the advertiser's page, and the advertiser pays the search engine just slightly more than the next highest bid amount every time a user clicks that hyperlink. The advertisements are commonly displayed above and/or to the right of the search results.

Litigious background

A number of actions have been brought against search engines and advertisers for trade mark infringement through the unauthorised use of keywords comprising trade marks and/or use of trade marks in the text of advertisements. The key player in such litigation has been Google, which has had courtroom victories in the UK and Germany, a mixed track record in the US and numerous defeats in France, and has also settled several disputes.

As there is no Australian precedent directed to use of trade marks as keywords in search engine marketing, international decisions and opinions are important, as they are likely to influence the Australian courts' position.

Policies

In any search engine marketing campaign, it is important to check specific search engines' policies before bidding on keywords. This is especially so when considering using another's trade mark as a keyword, as search engines have differing policies regarding what constitutes permissible use of trade marks in search engine marketing and when such use will be investigated.

For example, in June 2009, Google added 190 countries to its list of regions for which it would not investigate complaints regarding the use of trade marks as keywords. Previously, the list comprised only the US, Canada, the UK and Ireland. Australia was not added to the list. Note that this policy of non-investigation does not extend to use of trade marks in the text of advertisements, merely to their use as keywords.

The Advocate General's opinion

In three French cases that Google has lost and appealed, the appellate court referred to the European Court of Justice (ECJ) questions of law as to whether use of a keyword in search engine marketing may constitute trade mark infringement. On 22 September 2009, the Advocate General assisting the court delivered its opinion in the case. While opinions are not binding, they are usually followed by the court. The Advocate General held that mere use of trade marks as keywords in Google's search engine marketing did not constitute trade mark infringement by Google, nor by advertisers, and that Internet users were aware that not only the trade mark owner's site would appear as a result of a search in Google's search engine. The Advocate General noted, however, that an advertiser may be liable for trade mark infringement if it uses a trade mark in the text of an advertisement.

The ECJ's decision is expected early next year.

The position in Australia

There is no Australian precedent directed to use of trade marks as keywords in search engine marketing. The position here will turn on whether such use is 'use as a trade mark' under section 120 of the Trade Marks Act 1995 (Cth). This determination is almost certainly going to refer to overseas case law in the field.

Similarly, there is currently no precedent directed to whether the use of keywords in search engine marketing may give rise to liability in Australia for the tort of passing off, misleading or deceptive conduct under s52 of the Trade Practices Act 1974 (Cth), or falsely representing a sponsorship, approval or affiliation under s53 of the Trade Practices Act. On 11 July 2007, the Australian Competition and Consumer Commission (the ACCC) filed an action in the Federal Court against Trading Post Australia Pty Ltd (the Trading Post) and Google, alleging misleading and deceptive conduct (but not trade mark infringement) for use of the business names 'Kloster Ford' and 'Charlestown Toyota' as keywords, and in the titles of Google sponsored links, hyperlinked to the Trading Post's website. While the Trading Post and its parent company, Sensis, have settled with the ACCC, the action against Google continues, with a three to four week hearing listed for 8 March 2010. Although this case could determine whether the mere use of a business name as a keyword may constitute misleading or deceptive conduct under s52, the outcome may have little bearing on the issue of whether the use of a trade mark as a keyword constitutes 'use of a mark' under s120 of the Trade Marks Act.

Search engine marketing is a mature, multi-billion dollar industry and can offer significant exposure to businesses that bid on cleverly targeted keywords. However, Australian businesses should be alert to the risks associated with the current dearth of Australian precedent directed to the use of others' trade marks as keywords in search engine marketing. Every reputable business should also be mindful of protecting its own image and customer base from third parties using its trade marks or business name in search engine marketing.

What to do if your rights are being infringed

If your Australian trade mark is being used as a keyword or in the text of a search engine marketing advertisement without your consent, it is worth considering informing the search engine via its notification procedures as a first port of call, following which the search engine may remove the infringing advertisement and prevent the keyword from being bid on in the future. As each search engine has its own distinct trade mark policy, the success of each application will turn on its facts, and the remedies may differ. For example, in some cases, use of a trade mark for the purpose of competitive comparisons may be a legitimate use of the mark that does not infringe the trade mark owner's rights, with the result that it may be allowed by some search engines.

In all cases, be sure to seek advice before sending any letters of demand, as there is a fine line between an infringing advertisement and one that is shrewdly and legitimately targeted, and a groundless threat has the potential, itself, to attract liability.

Footnotes
  1. Advocate General's opinion in joined cases C-236/08, C-237/08 and C-238/08: Google France & Google Inc. v Louis Vuitton Malletier, Google France v Viaticum & Luteciel and Google France v CNRRH, Pierre-Alexis Thonet, Bruno Raboin & Tiger, franchisée Unicis.

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