background image
30
T H E P R I M E R U S P A R A D I G M
Competitive Keyword Advertising:
How Far Can You Go?
Google AdWords is an online advertising
service. One of its features is sponsored
links, advertisements triggered by
keywords supplied by the advertiser.
When a user conducts a Google search
with a keyword, the search results display
the sponsored link in addition to organic
search results.
It is common for advertisers to use
competitors' trademarks as keywords
in Google AdWords. This means the
advertiser's sponsored link ad will
appear when someone searches for their
competitor or their competitor's products/
services. It makes sense from a marketing
perspective to target competitors' potential
customers ­ after all, they are searching for
a product/service that the advertiser offers.
In this article we compare the legality
of competitive keyword advertising in
Australia, the United States and Europe.
Australia
Australian case law suggests that
including a competitor's trademarks as
keywords does not constitute trademark
infringement.
In
Veda v Malouf the court held that
Malouf's use of the applicant's trademark,
"Veda," in keywords was not trademark
"use" (and hence trademark infringement)
for the purposes of local trademark
law for a number of reasons.
1
First, the
advertiser, in this case Malouf, simply
selected keywords and provided them to
Google. This is not "use" that indicates a
connection between the services provided
by Malouf and the services provided by
Veda. Second, keywords involving the
word "Veda" may be used by anyone
under the Google AdWords program,
including Malouf's competitors. When
a consumer searches using one of these
keywords, sponsored links of Malouf's
competitors may appear. They may also
appear in organic search results. Third,
the keywords are invisible to consumers.
Justice Katzmann stated "the proposition
that using words which are invisible
and inaudible, indeed imperceptible, to
consumers is using them as a trademark
makes no sense." After all, keywords
cannot be seen to distinguish the services
of one trader from another when no one
can see the keywords.
In
Veda, the Court made a distinction
between bidding on a competitor's
trademarks as keywords and displaying a
competitor's trademark in the text of the
sponsored link advertisement. Whether
this amounts to trademark infringement
depends on the circumstances, and
whether the use is considered to be
descriptive (which is acceptable) or to be
used as a badge of origin.
Europe
In Google France v Louis Vuitton Malletier
SA
the Court of Justice of the European
Union (CJEU) stated that the test is
whether the selection of trademarked
keywords has an adverse effect on one of
the functions of the trademark, such as
the function of indicating the origin of the
mark. This depends in particular on the
manner in which that ad is presented.
2
A
function of the trademark will be adversely
affected where the ad does not enable
an average internet user, or enables that
user only with difficulty, to ascertain
whether the goods or services referred to
therein originate from the proprietor of the
trademark or an undertaking economically
connected to it or, on the contrary originate
from a third party."
3
In other words, there
will be infringement where the average
consumer may wrongly think that the
goods advertised are from the trademark
proprietor.
In
Interflora v Marks & Spencer,
4
both
the plaintiff and defendant operated
internet websites that took orders for the
delivery of flowers. The plaintiff alleged
that in using its trademark, "Interflora,"
and associated terms, the defendant was
Asia Pacific ­ Australia
Selwyn Black leads the business lawyers group
at Carroll & O'Dea Lawyers. His practice includes
advising on a variety of issues for businesses
including marketing disputes, acquisitions
and disposals, joint ventures, contracts and
employment arrangements, international supply,
license and distributorship arrangements and
associated disputes and regulatory issues.
With training in three countries,
Simone Black
is a lawyer to deliver quality advice and
advocacy for clients in the Carroll & O'Dea
Lawyers business lawyers team.
Carroll & O'Dea
Level 18, St. James Centre
111 Elizabeth Street
Sydney New South Wales 2000 Australia
+61.2.9291.7100 Phone
+61.2.9221.1117 Fax
codea.com.au
sblack@codea.com.au
simone_black@codea.com.au
Selwyn Black
Simone Black