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Case law: Court gives guidance on when using competitor's trade marks as online keywords is unlawful

Businesses buying keywords comprising a competitor's trade marks should ensure they meet the criteria for lawful use of such keywords, and monitor the rate of clickthroughs from their advertisements, as this show their advertisement does not meet those criteria.

Legal Alert

This update was published in Legal Alert - February 2017

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

Two online bathroom retailers had similar names but had rubbed along in the same marketplace since 2001, apart from the odd situation when members of the public confused them.

One company had registered its name as a trade mark. The rival company started to buy online keywords identical to the registered trade mark, and keywords that were very similar to it. This meant that when someone searched the internet using the words in the company's trade mark (or very similar words), the search results presented them with the rival's advertisements. Eventually, the rival was spending more than £600,000 on keyword advertising. The trade mark owner took the rival company to court, claiming its trade mark had been infringed.

Keyword advertising is lawful unless the advert displayed in response to the keywords "does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party".

The High Court ruled that the rival's adverts failed this test, therefore it had infringed the trade mark owner's rights. Relevant factors included:

  • The trade mark owner's mark was long-standing and had a substantial reputation
  • Both businesses sold a virtually identical range of goods
  • It was not clear from the rival's advertisements that they were not the trade mark owner's advertisements
  • It could be assumed that people using the trade mark in their search would expect to see a link to the trade mark owner's website in the results. The fact there was a high click rate on the link to the rival's website from the advertisement was evidence that a 'normally informed and reasonably attentive internet user' would not appreciate that the link was to a different company's website

There is a defence of 'honest concurrent use', but the Court ruled that on the facts of this case, the defence cannot justify the rival's use of the trade mark owner's marks when bidding on them as keywords.

Operative date

  • Now

Recommendation

  • Businesses buying online keywords comprising competitor's trade marks should ensure they meet the criteria for lawful use of such keywords. Particularly, they should monitor the rate of clickthroughs from their advertisements as these may be evidence that their advertisement does not meet those criteria

Case law: Victoria Plum Ltd (t/a Victoria Plumb) v Victorian Plumbing Ltd & Ors [2016] EWHC 2911

Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.