As traditional advertising channels have declined, online advertising has increased exponentially. However, the methods used to sell and place online advertising (bidding for keywords), together with the lucrative revenues involved, have led to a number of court battles over trademark infringement. These court battles have affected not just the entity placing the advert, but also the operators of the advertising systems.
How online advertising works
The majority of online advertising is sold through a small number of businesses that sell keywords and place adverts on websites and search engines. One of the best known is Google Adwords. Adwords was launched by Google in 2000, and by 2008 had revenues of some US$21 billion (aprox £14 billion). It works by allowing you to buy a good screen position for your advert in the results of a Google search for a word or a phrase you choose.
So, for example, we could bid up to £2 for a Brodies advert to be displayed when a user searches for ‘outsourcing law Scotland’ (although you only pay Google if someone clicks-through on your advert).
This is a fairly standard use of Adwords. However, imagine we had bid for the Brodies’ advert to be displayed when a competitor’s brand name was searched for. We might get more traffic but our competitors would not be too happy. This year’s general election campaigning threw up its own little search advertising conflict when it appeared that Labour were one of the highest bidders for the search term ‘David Cameron’ (the Labour advert that popped up was a critique of Toryism). Interestingly, at the same time lingerie and sex toy retailer Ann Summers also appeared to be bidding for display against results for David Cameron.
But for commercial businesses and brand protection there are some lessons to be learned from a couple of recent high-profile court cases.
Case studies
Interflora versus Marks & Spencer
In this case, it has emerged that M&S bid for its flower delivery advert to be displayed if anyone Googled ‘Interflora’. Interflora brought an action against M&S for trademark infringement.
The case is currently stayed, (i.e. paused) pending consideration by the European Court of Justice (ECJ). However, that same European Court has issued a decision on a similar case (see below).
Louis Vuitton versus Google
The long-running court battle between Louis Vuitton and Google has now ended – the luxury goods company had sued Google (as opposed to the party that had purchased the Adwords) over use of its trademarked brand names in search advertising. In March, the ECJ held that Google was not liable because it was just a conduit for the infringement and not the author of the infringement (i.e. it was not ‘using’ the mark in question).
While the decision may be questionable, the upshot is clear – if you are the aggrieved brand owner, you have to challenge the purchaser of the Adword, and not Google.
Avoiding trademark infringement
The law is still unclear on whether or not bidding for a keyword can constitute trademark infringement. This means that advertisers should consider each keyword carefully before they bid for them. The following tips may be helpful:
1. Just because a keyword is available to purchase (or suggested to you by the advertising service on the basis of the content of your website and search traffic), it does not mean that it can be used without infringing another party’s trademarks.
2. Check whether the term that you are considering corresponds (or is similar) to a third party’s registered trademark.
3. If the answer is yes, think carefully about whether the ad is worth it?
4. If you think the Adword is worth investing in, make sure that it is clear from the advert that accompanies your sponsored link (and from the website to which it links) that you are not linked to the trademark owner.
Best practice for brand owners
But what if you are in the Interflora position and someone has bought your trademark as an Adword?
An advisable response is to make sure that you immediately outbid the other person – paying enough to ensure that your advert appears before theirs when a search is made for your trademark.
Despite the outcome of the Louis Vuitton case, it may also be worth raising an objection with Google. Although there is a chance it may not succeed, it’s at least a cheap option.
If that doesn’t work then it is likely that you will need to instruct lawyers to threaten legal action on grounds of trademark infringement unless the adverts stop. This often yields results because the rogue Adwords are typically purchased by web or marketing professionals who don’t understand the legal risk, and once they do, they will often back down.
As a last resort some businesses have even taken up the same tactics – bidding for their advert to be displayed against the searches for their competitors’ trademarks. However, this is an aggressive play because it raises the stakes – though it has been known to result in a withdrawal agreement.
