Trade marks are a key element of a businesses’ brand identity and at the forefront of the interface between branding and technology – trade marks are often used in new digital services or products.  This often leads to legal conflict, as trade mark law (like almost all law) originated pre-digital times and was not developed with the digital world in mind.

One of the most fundamental challenges came about through the use of trade marks as keywords in online search engines, because the type of service meant that the application of existing trade mark law was unclear.  

Legal background

Under Article 5 of the European Trade Mark Directive (which forms the basis of all EU trade mark law) the proprietor of a registered trade mark has the exclusive right to prevent all third parties from using in the course of trade without the proprietor’s consent:

• a sign which is identical with the registered trade mark, in relation to goods and services identical to those for the relevant trade mark is registered; and
• a sign where such use, because the sign or the goods and services are similar to the registered trade mark or those for which it is registered, creates a likelihood of confusion (including that of association) between the sign and the registered trade mark.

Additional protection is afforded to well-known trade marks whose proprietors can prevent the use of similar signs by others, in relation to goods or services which are not similar.

Applying the law to online keyword services throws up certain difficulties due to the nature of the service.

What is the relevant “use” and who is the infringer?

Trade mark law centres around “use” of an infringing sign and in the case of keyword services, it is not immediately clear what the use is (and therefore who the defendant/infringer is). If the act of using a keyword in an online search to generate the relevant advertisements is “use”, the service provider is the user and therefore the potential defendant/infringer. If the act of registering the keyword is “use”, the advertiser is the potential defendant/infringer. There is also the possibility that the relevant keyword is actually displayed in the advertisement which was triggered.

 Is the keyword used in relation to similar or identical services?

An advertiser will usually use the keyword in relation to services or goods which are similar to those for which the keyword was registered as a trade mark. However, that is not automatically trade mark infringement, because very often the triggered advertisement does not display the relevant keyword.

The service provider’s use of the keyword is for purely administrative services (linking and displaying the keywords and relevant advertisements, for its customers, the advertisers) and such use may not even be use “in the course of business” which is an essential condition for trade mark infringement. 

Does the use of a trade mark as a keyword cause confusion?

The use of search engines is so widespread and such a basic component of online services that the average user of such services is likely to have fairly high threshold of knowledge about the different search results and is unlikely to believe that there is a connection between the advertisements generated through use of a keyword and the natural search results.

English law

The first case to be brought under English law based on UK legislation and not involving European law concerned the registration by Sainsbury’s and Pricegrabber of a keyword which was similar to the name of a sauce (Mr Spicy, which was registered as a trade mark).  The case was dismissed because of a fatal fault (it was pleaded on the basis that the registered keyword was identical to the relevant trade mark, while in fact it was just similar). But the judge stated (in a non-binding commentary) that such a service is unlikely to be an infringement of trade mark rights because its use of a trade mark did not affect any of the rights of a trade mark owner. However, since there was no judgment, the legal state of uncertainty continued.

One of the interesting side effects of this outcome was that Google quickly amended a part of its AdWords policy which, prior to the dismissal of the case, had prevented advertisers in the UK and Ireland from using trade marks ad AdWords. Google decided to allow such use (however, the ban on using the trade mark within the advertisement itself remained).

The European Decision

The decision by the European Court of Justice (ECJ) in three joint cases (Google v. three brand owners) recently clarified the uncertainty in this area of law.  The ECJ decided that the use of a registered trade mark as a keyword is “use in the course of trade” in relation to the advertiser but not in relation to the service provider. This means that the likes of Google and Yahoo would not breach trade mark law by providing such a service. The ECJ also decided that the proprietor of a registered trade mark can only prevent such use by the advertiser if it can be shown that the use would have a detrimental effect on the function of the relevant trade mark (such as its role as an indicator of origin and quality). In reaching its decision, the ECJ considered the fact that it has, for some time, been possible to use registered trade marks in the course of comparative advertising and that therefore the use in keyword services could not automatically be considered to be more detrimental to the functions of a registered trade mark.

In August 2010, Google further amended its AdWords policy so that it now allows (in the UK, Ireland and the USA) the use of registered trade marks within the triggered advertisements, provided that it is not competitive, critical or negative. This includes instances where the advertisements do not lead to a landing page which features goods or services that are related to the trade mark which was used as a keyword.

Conclusion

Brand owners have to deal with the use of their trade marks by competitors as a type of comparative advertising. To the extent that your trade mark is used by a competitor within the advertisement, you have to examine whether it is used in a confusing or misleading manner.

Rustam Roy is a Senior Associate at solicitors, Manches LLP, specialising in

IT and IP issues. Contact him on rustam.roy@manches.com or 01865 813692.