There has been widespread attention given to the practice of using a competitor’s trade mark as a keyword in Google AdWords. There is also confusion as to whether this practice is, or should be, allowed.
Can you use a competitor’s trade mark as a keyword in Google AdWords in Australia? What about in other countries? Yes; or possibly no; or maybe. There may be no clear cut answer. It depends on a variety of factors, all of which should be addressed prior to utilising a competitor’s trade mark as an AdWord for each target jurisdiction.
How does Google AdWords work?
How does Google AdWords actually work? Advertisers are able to purchase ‘keywords’ from Google AdWords to associate with a purchased ad. There are usually many keywords per ad, as there are many words that may be associated with a specific product or service that is being advertised. For example, a Google ad for women’s clothes may employ the keywords “fashion”, “clothing”, “accessories”, “shoes”, “hats” etc.
Taken one step further, Brands or trade marks are often used as keywords. For example, “McDonalds” uses “McDonalds” as a keyword. The advertiser may, however, also choose to purchase keywords of a competitor’s Brands – for example “Hungry Jacks” or “KFC”. The trade mark is not owned by the advertiser, nor is it visible anywhere on the advertisement; rather it is hidden or masked in script behind the ad.
In Google Inc v Australian Competition and Consumer Commission (2013) 99 IPR 197 it was held that Google, in allowing and performing this practice, did not engage in misleading and deceptive conduct contrary to the then section 52 of the Trade Practices Act (now section 18 of Schedule 2 of the Competition and Consumer Act 2010 – the Australian Consumer Law). Google was merely a “conduit” in allowing advertisers to utilize the trade marks of competitors as keywords. Following on from this case, Google’s AdWords policy was changed, removing the restriction on purchasing competitors’ trade marks as keywords.
With that said however, certain conduct is still capable of being in breach of the Trade Marks Act 1995 or the Competition and Consumer Act 2010. Whilst Google was held as not engaging in misleading and deceptive conduct, there is no such confirmation of the position for advertisers.
A recent case in Norway saw the Norway Committee for Unfair Competition (NCUC) find that using a competitor’s trade mark as an AdWord contravenes section 25 of the Marketing Control Act 2009 (Norway). The NCUC surmised that the goodwill inherent within a trade mark is a result of the efforts of the trade mark owner to market that trade mark effectively. It is due to this successful marketing that an internet user then types the trade mark into a search engine. Use of the trade mark by a non-owner is considered exploitation of that goodwill and thus is seen to be a breach of ‘good business practice’.
In Interflora Inc v Marks and Spencer plc (M&S) (2013) 2 All ER 663, M&S had purchased “Interflora” as a keyword. The subsequent use, it was held, misled the reasonable observer into thinking there was a connection between Interflora and M&S. Essentially once confusion is created about the origin of the product or services in question then infringement may occur.
The European Court of Justice takes the viewpoint that permitting the use of competitor’s trade marks in AdWords promotes competition and is encouraged. Nonetheless, where there is confusion on the part of the average internet user as to the origin of the goods or services in question, the advertiser will be liable.
The legalities of using competitors’ trade marks in Google AdWords differs from country to country, sometimes markedly, sometimes subtlety.
If you choose to use a competitor’s trade mark as a keyword in Australia, be very wary – even though Google was found not liable in the ACCC case, the same precedent has not yet been set for advertisers.
If you operate internationally it is vital to check whether the conduct that is perfectly acceptable in your own country does not contravene international laws.
10 July 2013