Patent & Trade Mark

Advertisers, Google and AdWords

Date: 20 May 2010
Author: Larissa Wayne
  • A recent European decision held that an Internet search engine provider, such as Google, did not infringe registered trade marks by its AdWord system.
  • However advertisers using a registered trade mark as a keyword may infringe.
  • Trade Mark owners need to be proactive to identify misuse of their registered trade marks on the internet, and take appropriate action.
The popular internet keyword program, Google AdWords, has caused a flurry of allegations of trade mark infringement, with Courts struggling to balance the rights of trade mark owners, advertisers and search engine providers.

What are Google AdWords?

Google AdWords advertisements are created by businesses choosing keywords for which its advertisement will appear as sponsored links. AdWords advertisements or sponsored links are displayed along with search results on Google, as well as on search and content sites such as AOL, EarthLink, HowStuffWorks, and Blogger.
The problem that arises is that the AdWord system allows brand names or trade marks to be purchased as keywords by entities other than the trade mark owner, so advertisers may “piggy-back” on a well-known brand to gain publicity for their sponsored link. This problem is exacerbated if these advertisers are selling competing products or counterfeit products.
Although this may seem like a clever marketing strategy, there are a growing number of cases indicating that the use of a third party’s trade mark in this way may result in exposure to claims for trade mark infringement.

How are the Courts handling this issue?

In March 2010, the Court of Justice of the European Union (the “ECJ”) issued its opinion on the use of keywords in search engines on the Internet. It ruled that Google could continue to sell trade marks as advertising keywords, providing that Google acts quickly to take down such advertisements when trade mark owners object on the basis that the advertisements, and/or linked websites resulting from the keyword buys, infringe the owner’s trade marks.
The effect of this European decision is that trade mark owners cannot stop their trade marks from being purchased as keywords in Europe. However Google must act promptly where a legitimate claim of infringement is made. It is likely that this is the position which will be adopted by the Courts in other countries, and it provides some consolation to owners of registered trade marks requiring Google, to be responsive to claims of trade mark infringement by use of AdWords.
In Australia the first question for infringement of a registered trade mark is whether the use of the trade mark as keywords for AdWords advertisements and the resulting advertising links constitutes “use as a trade mark”.
A recent Australian case Mantra Group Pty Limited v Tailly Pty Limited [No 2] 1 , found trade mark infringement in relation to various internet marketing strategies, including use of terms similar to the registered trade mark Circle on Cavill as keywords for Google advertisements. The Federal Court decided to restrain the defendant from using Circle on Cavill or similar names as part of a search engine keyword, domain name, metatag or business name. Google was apparently not informed that Mantra held a registered trade mark for “Circle on Cavill” until approximately 21 May 2009. Since then, Google has not allowed anyone else to use the words “Circle on Cavill” as a keyword in any of its paid advertisements.
This illustrates that all is not lost for trade mark owners, who have the right to claim trade mark infringement against advertisers, when it is unclear to customers who is behind the advertisement such that there is a likelihood of confusion or association between the legitimate website and the advertiser’s website. This will be decided on a case-by-case basis by national courts.

What does Google think about it?

Google’s FAQ states:
“As a provider of space for advertisements, we cannot arbitrate trade mark disputes between advertisers and trade mark owners. As stated in our Terms and Conditions, advertisers are responsible for the keywords and ad text that they choose to use. We encourage trade mark owners to resolve their disputes directly with our advertisers, particularly because the advertisers may have similar advertisements on other sites. As a courtesy, we are willing to perform a limited investigation of reasonable complaints. When we receive a complaint from a trade mark owner, our review is limited to ensuring that the advertisements at issue are not using the trademarked term as a keyword trigger. If they are, we disable those keywords from the ad campaign…”
While the ECJ’s decision relieves Google, to an extent, from claims of infringement by trade mark owners, it will be interesting to see whether Google changes its AdWord policy following the ECJ decision.

What should advertisers do?

The ECJ decision makes it clear that the obligation is on the advertiser, and not Google, to avoid the risk of infringement. This includes:
  1. not to use trade marks of others in internet marketing strategies
  2. to make it clear that there is no link between the advertiser and the trade mark owner if the trade mark owner’s trade mark is used as an AdWord
  3. to ensure that the text in the advertisement is not misleading about the advertiser’s connection to the trade mark owner.

What should trade mark owners do?

Internet advertising is a key forum where misuse can and does occur. Trade Mark owners should:
  1. ensure their trade marks are registered
  2. monitor search engines by carrying out searches for products and/or brands using their trade marks as keywords
  3. place entities which have purchased trade marks as AdWords or similar, on notice of any objections or concerns
  4. notify Google or other search engine providers of misuse of registered trade marks and request that the AdWords or similar are removed or disabled.
If you have any questions or require any assistance in relation to protection of your trade marks, please contact a member of the trade marks team
1  [2010] FCA 291 (26 March 2010)
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