Goldenvoice’s Coachella Music Festival last week filed a trademark lawsuit against Urban Outfitters, accusing the clothing retailer of trademark infringement, tortious interference and unfair competition for driving traffic to its website by purchasing Coachella-themed Google Adwords and using the term in its website metadata.
Here, Laura Harper, a partner at British law firm Shoosmiths, comments from a UK perspective on the legal issues surrounding the purchase of such keywords by rival brands.
Expenditure on internet advertising in the UK rose by over 15% in the second half of 2016 and is set to increase further this year. With the appetite for online and mobile advertising growing amongst brand owners, the role of Google AdWords appears to be increasing in significance.
What are AdWords?
Google AdWords is an advertising service which allows advertisers to have accessible advertisements appear in Google’s search results. Advertisers that use AdWords can purchase one or more keywords relevant to their business so that when potential customers type the keyword into Google’s search engine, the advertiser’s advertisement will appear above or next to the search results, the benefit being that the advertisement is displayed above the ‘natural’ results. If more than one advertiser purchases a particular keyword, advertisers can bid on the order of the display; the highest bidder achieves the highest position in the results.
Google does not prevent advertisers from using third-party trademarks as keywords in its AdWords service. It is this permitted use of a competitor’s trademark that has led to a number of high-profile brands attempting to assert their intellectual property rights through the courts, with varying degrees of success. The cases are few and far between, but they do provide interesting guidance on what may and may not amount to trademark infringement. In recent years, the courts’ view on such cases has tipped in favour of promoting competition over protecting the rights of trademark owners.
Can advertisers use third-party trademarks as ‘keywords’ without infringing the rights of the trademark owner?
The short answer is: yes.
Provided that the advertiser makes it clear that the goods and services it is selling originate from the advertiser and not the trademark owner, then the use of a keyword which is a registered trademark is unlikely to be infringing. Conversely, if it is unclear or confusing to customers whether there is some economic link between the advertiser and the trademark owner, then there is a likelihood of infringement.
The European Court of Justice confirmed that the use by an advertiser of a keyword that is identical to a third-party trademark constitutes ‘use in the course of trade’ (a prerequisite to establish trademark infringement), but that such use shall not be infringing where it is clear that there is no commercial connection between the advertiser and the trademark owner.
‘The reasonably well-informed and observant internet user’
In the 2014 case of Interflora Inc. v Marks and Spencer plc, the court established the principle of the ‘reasonably well-informed and observant internet user’. If such a user would be able to tell that the advertisement that appeared as a result of inputting a particular keyword was not the advertisement of the trademark owner, but that of a competitor, then there would be no harm to the distinctiveness of the trademark and, therefore, no infringement.
In this case the court also said that the use of a third-party trademark as a keyword is lawful as long as it is done with ‘due cause’. Exercising ‘due cause’ would be engaging in fair commercial competition with a trademark proprietor, offering goods and services as an alternative to the trademark owner’s goods and services. Therefore, in such circumstances, when a competitor uses a third party registered trademark in its AdWords campaign by purchasing and bidding on keywords that are third party registered trademarks, such use can be fair.
Honesty is the best policy
Honest use of a trademark is a defence to trademark infringement. The use must be in accordance with honest practices in industrial or commercial matters. For example, a trademark may be used to describe the contents of a website or to identify the goods or services sold on the website or as part of a legitimate comparative advertising campaign. However, it’s unlikely that the use of a keyword (which is invisible on the website and to the consumer) for comparative advertising purposes would be held to be honest use.
The case of Victoria Plum Ltd (t/a VictoriaPlum.com) v Victorian Plumbing Ltd & Ors (2016) concerned the purchase by Victorian Plumbing Ltd (Victoria Plumbing) of the keywords ‘Victoria Plumb’ and ‘Victoria Plumbing’. VictoriaPlum.com owns several EU and UK trademark registrations for the mark VICTORIA PLUMB. Victoria Plum Ltd (previously, Victoria Plumb Ltd) (VictoriaPlum.com) sued Victorian Plumbing for trademark infringement. The court decided that Victorian Plumbing’s advertisements would not enable a reasonably well-informed and observant internet user to ascertain whether the goods or services originated from VictoriaPlum.com or from a business commercially connected to it. In the circumstances, Victorian Plumbing had infringed Victoria Plum’s trademark by using it in Victoria Plumbing’s Google AdWords campaign.
In the context of honest use, the court said that, where two entities have co-existed for a long period of time which have the same or similar names, it is inevitable that confusion will arise. To an extent, this confusion will have to be tolerated. However, one of the entities must not take steps to exacerbate the level of confusion beyond what is inevitable. In the case of VictoriaPlum.com, it was difficult for customers to be certain of the origin of the goods and so the use of the keywords was dishonest.
What can trademark owners do?
- If infringement is suspected, a trademark owner can submit a complaint to Google – Google will undertake a ‘limited investigation’ if a trademark used as a keyword in combination with text in an advertisement is confusing as to the origin of the advertised goods and/or services. If Google decides that it is confusing, it will prevent the advertisement from running
- Conduct regular checks – search for the trademark on a number of search engine providers. This will reveal hidden uses of the trademark as keywords (as with AdWords or metatags), as well as visible uses
- Beware of making unjustified threats of trademark infringement proceedings – this can give rise to a cause of action for the advertiser who may bring a claim against the trademark owner
- Consider taking legal advice on how best to protect your brand from unauthorised online use
What can advertisers do?
Transparency is key. Transparency in the advertisement is necessary to protect the consumer; also, the more transparent the advertisement, the less likelihood of confusion in the minds of the public and, therefore, of trademark infringement. Advertisers should bear in mind that customers searching for a particular brand may be confused when presented with a different brand offering the same or similar goods and/or services. Provided that the advertiser ensures that customers can ascertain where the goods and/or services originate from, purchasing and bidding on third-party trademarked keywords is fair game in the online world.
Laura Harper is a partner at Shoosmiths LLP.