Trademarks and AdWords: Buyers Beware! Advertisers Beware!

The debate about trademarks and AdWords advertising rages on and could transform internet advertising on Google, which could be required to 'respect' trademarks, but for now its the buyer and advertiser who have to beware.

The test is generally whether consumers are confused or misled about the origin, quality or availability trademark protected product or service, and unauthorized or inappropriate use of the trademark.

Any restrictions on trademarks in AdWord campaigns may lead to increasing battles over the registration of trademarks in various countries.

Advertisers may have to be very careful choosing the keywords and AdWords for their campaigns. See this article for all the latest news for advertising.

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Relationship between Brands and Trademarks
Relationship between Brands and Trademarks | Source

Who is liable - the advertiser for choosing a trademark they do not own as an AdWord, or Google for letting anyone bid and use trademarks as AdWords. That is the big question that remains unanswered and is being tested in various court cases around the world. The whole future of internet advertising is at stake.

Similar issues have arisen about the use of trademarks in URLs (discussed below) and cyber-squatting (also called 'domain squatting'), which is trafficking in, registering, or using a domain name inappropriately, in order to profit from the goodwill of a someone else's trademark.

There have been a series of court cases, particularly in Europe that have dealt with trademarks and AdWords issues. The latest case concerns a search under the word “Interflora”, which is a registered trademark, on Google’s search engine in Britain. The search for 'Interflora' brings up sponsored advertisements for three different Web sites based on the adword "Interflora": Asda’s, Marks & Spencer’s and Interflora, only the latter that holds the trademark. The two other companies compete with Interflora and sell flowers. Interflora argues that the paid Adwords ads on the search results misleads consumers and so breaches their Trademark.

An adviser to the European Court of Justice has stated in respobse to this court case that online advertisements that could confuse and mislead consumers should not be allowed.

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Rather than suing Google, Interflora went after a user of the service, Marks & Spencer. If the court agrees with the opinion, Google’s customers may have to reassess how extensively and precisely they want to bid for and use a competitor's trademark as an AdWord.

This is basically the 'advertiser beware' principle. Google may also have to restrict or block the use of trademarks by those who don't own them, but this remains to be determined as the argument is only an opinion to be put to the court. Who is liable in this case Google or the Advertiser (Marks & Spencer).

A Google Australia search on 'Interflora' shows a paid advertisement for Interflora Australia, which appears as #1 in the search results. The second result is for a company that includes the phrase 'not an Interflora Florist' in their title - a very interesting tactic, indeed!!!!

This raises the interesting issue of the use of trademarks in titles, including book titles and presumably article titles. This is generally allowed as it is regared as a 'Nominative use', which refers to the use the trademark owned by someone else, as a reference to describe the other product, or to compare it to their own. The 'nominative use test' basically states that you can use someone else's trademark provided that:

  • The service or product cannot be reasonably described or recognised without using the trademark (that is that the trademark is descriptive of a place, person, or product attribute).
  • The user only the part of the trademark that as is necessary to identify the product (for example the words in the trademark but not the symbol or font)
  • The user does nothing to suggest or deceive the consumer that the product is sponsored or endorsed by the trademark holder. This applies if the product or service is non-commercial or commercial.
  • The same test apply to the metatags.

The Interflora lawsuit is the latest in a series of cases regarding the potential limits of search engine advertising under laws that apply in the European Union. There have been a large number of adsense court cases in America, and in Europe an elsewhere.

In July, 2010 the outcome of a case brought by temporary cabin maker Portakabin, found that companies could use trademarks and names of competitors as Internet advertising keywords without breaking European trademark laws.

This ruling supported an earlier judgment in the famous Google-Louis Vuitton case, when Louis Vuitton claimed that its brand name was used by companies that advertised counterfeit Louis Vuitton goods. The finding in that case was that if internet Service Providers, such as Google, were "neutral" about the content, then the trademark law was not infringed. ('User beware')

Google has always pushed the 'buyer beware principle' and has advocated that consumers are intelligent and are not confused or misled when they are presented with a variety of ads displayed in the search results to their search queries. This is basically the 'buyer beware principle'. It is obvious that Google will benefit from a range of advertisers being linked to a trademark or brand name that are used in AdWords campaigns.

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CYBER SQUATTING
CYBER SQUATTING

The basic test that is used in these legal challenges is that the product placements could be subject to trademark law if the trademark holder can prove that consumers were confused. Trademarking is a method of building brand recognition and is subject to various trademarking authorities in various countries. Most law suits regarding trademark violation cases involve determining if the infringing conduct caused or could cause confusion in the marketplace in the following ways:

  • Confusion about the origin of the product or service (such as appropriating the name of a competitor) or
  • Misrepresentations regarding quality, features or nature of the product or service (for example falsely claiming that orange juice is 'freshly squeezed').
  • Prevention against dilution of a trademark's reputation.
  • However, a llegal challenge need not necessarily involve confusion as such. The mere usage of a trademark, may be a violation if unauthorized irrespective of any losses.

Trade Marks in Domain Names

You could be liable for infringing someone else's trademark by using it in a domain name. The test applied is very similar to that described previously "consumers were confused" or "the public was confused". The test is: Does the infringing URL cause "public confusion." In other words, if the URL bottom level domain name is the identical or very similar to a famous, known or established trademark, and might lead customers to the web site in the expectation that the trademarked goods or services would be found at the site. The question is: Does the domain name cause public confusion or might it?

The proof of this can be expensive as it may require a properly conducted public survey to prove such a claim.

The trademark owner might obtain a court injunction to stop a domain name if the mark is similar to a domain name and it is registered, strong and not generic or descriptive. Claims may be held to be infringements, whether or no the confusion of deception is willful or not. The domain name may be cancelled and there may be criminal liability, civil liability and punitive damages and seizure of goods or shut down of a site.

For the URL, trademark breaches generally applies in one of two ways:

  • within the URL or
  • within a link.

There have been many court cases regarding trademarks in URLs, and as a consequence domain name applicants must now confirm that the name applied for does not infringe upon the rights of any third party, and that use of the name is lawful. If a dispute arises, the domain name holder may be given 30 days to show that it has the legal right to use the trademark.

If the proof is not acceptable, the domain name may be suspended until the dispute is resolved through litigation or arbitration. As an alternative to a lawsuit over use of a domain name, trademark holders can file a complaint with an ICANN-approved dispute resolution organization. See http://www.icann.org/udrp/udrp-policy-24oct99.htm.

It is interesting that trademarks can be allowed in parts of the URL other than the domain name. For example a subdirectory name can legally use a trademark, or a trademark can be used in a specific file name. For example, the URL http://www.mysite.com/food/pepsi/pizzahut.html would appear to violate two trademarks. However a federal judge in USA, has recently ruled that such usage is liable to lesser protection than URL domain names, because it may be a simple description and does not mean it will cause confusion in the way the domain name usage does. As long as the content of the page does cause confusion about its origin or source, then there is no violation for use of a trademark as a description.

Google spokesman Jon Murchison has stated that Google is confident that their trademark policy represents an appropriate balance between the interests of the trademark owners and consumer choice and that their position has been confirmed by decisions in various trademark cases.

For a good introduction to trademark issues for webmasters see the article by Timothy J. Walton (2000 - though outdated).

For a funny article on business names and other fun articles see:

Fabulously Silly Business Names

Sheep ain't no Dumb Blonds

Lift, Elevator Etiquette - What you Can Do, Can't Do, Naughty Things

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© 2011 Dr. John Anderson

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ppc-specialist 3 years ago from Pakistan

Good information related to trademark.... nice hub voted up and sharing

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