Nico de Jong, Lawyer
Wrays Perth
The Internet has become a major arena for advertising. With more than 2 billion users and approximately one third of the world’s population using the internet, the amount of information it holds is increasing exponentially. To stand out amongst the crowd, vendors have developed new and devious ways to attract consumers to their products and services. Pay-per-click advertising, in particular, the use of Google adwords, is a common tactic used by many companies to stay ahead of competitors. How can this affect your intellectual property rights?
When a search query is entered into Google, the user is given a list of results relevant to the query. Google uses complex algorithms to order results according to their relevance. These results are typically called “organic” results. In addition to these, advertisements or sponsored links often appear either above or to the right hand side of the list of organic results. These results have a shaded background and different wording, indicating that they are advertisements. An advertiser has paid Google to show these results by purchasing Google adwords relevant to the search term. Unfortunately, advertisers can also purchase competitors’ names as adwords. They can then direct internet traffic to their website, traffic that would otherwise be intended for the competitor.
So how do owners of intellectual property rights stop competitors from using their name as an adword? This is a grey area and depends on the circumstances. Fortunately, a recent case in Australia (ACCC v Trading Post and Another (2011) 93 IPR 358) has provided some guidance on the issue in various situations:
Example 1 – Harvey World Travel
The court looked at the use of the keywords “HARVEY WORLD TRAVEL” by STA Travel (STA Travel and Harvey World Travel are competitors in the travel industry). When users entered “HARVEY WORLD TRAVEL” as a search query in Google, they were presented with a list of results including the following at the top left of the page:
Harvey World Travel
www.statravel.com.au Unbeatable deals on flights, Hotels & Pkg’s Search, Book & Pack Now!
Google argued that relevant consumers would have known that STA Travel and Harvey World Travel are competitors. Google likened the advertisement to: “If you click on this link you may find information relevant to your search, in particular, information relevant to travel”. On this basis, Google claimed the advertisement was not misleading or deceptive.
The Court disagreed and found that consumers would incorrectly understand from the above advertisement that STA Travel had a commercial relationship with Harvey World Travel. Consumers could find information relating to Harvey World Travel at the website www.statravel.com.au such as flight details or other travel related products and services offered by Harvey World Travel. The conduct was found to be misleading and deceptive.
Example 2 – Playstation 2
The court looked at the use of the keyword “PLAYSTATION 2” by Microsoft (distributor of the Xbox 360 in Australia). When users entered “PLAYSTATION 2” as a search query in Google, they were presented with a list of results including the following at the top left of the page:
Playstation2
www.xbox360.com.au Over 160 Games, Console, Wireless freedom and Xbox Live with Xbox 360
Playstation 2 and Xbox 360 are competing products. Google argued that “Playstation 2” and “Xbox 360” had such strong reputations that consumers would not confuse the two or see an association between them. According to Google, the advertisement says no more than: “If you are interested in game consoles, which you appear to be because you typed in Playstation 2, we have the X Box 360”.
The Court disagreed, finding that many consumers, such as parents or grandparents looking to buy a console or game, would not have such an understanding. The Court held that the Playstation 2 advertisement was likely to mislead or deceive consumers because it suggested that Playstation games or consoles could be bought from www.xbox360.com or that information about these products was available at the website. This was misleading.
Conclusion
These examples show how using competitors’ names as adwords can be regarded as misleading and deceptive conduct. So how do you determine whether the use of a competitor’s name or trade mark as an adword constitutes trade mark infringement, misleading/deceptive conduct and/or passing off? The simple answer is that it depends on the way the name or trade mark is being used.
If you are concerned about competitors using your name or trade mark as an adword to direct traffic to its website, or you are worried that you may be using the name or trade mark of a competitor as an adword in an unlawful manner, please contact Wrays for assistance.
For further information, contact Nico de Jong at Nico.deJong@wrays.com.au