Internet Keyword Advertising and Trade Mark Infringement Searching For Trouble
N i c h o l a s T y a c k e & R o h a n H ig g in s , C la y to n Utz
Rohan Higgins is a solicitor in the Intellectual Property and Information Technology Litigation group at Clayton Utz,
Sydney. Nick Tyacke is a Senior Associate in the same group. Nick Specialises in domestic and international intellectual
property dispute resolution. Prior to joining Clayton Utz, Nick worked in New York for a number of years with one of the
United States’ top intellectual property litigation firms.
Internet search companies have long
relied on the sale of advertising to
provide a revenue stream. Over time,
efforts have been made to tailor such
advertising to the individual user and,
more recently, to the “keyword”
searched by the user.1 This latter form
of advertising, referred to as “keyword
advertising”, is now one of the primary
revenue streams for many search
engine companies.2 The significant
revenue streams produced by this
advertising model, combined with the
relatively unobtrusive (and thus
unobjectionable to internet users)
nature of such ads has seen, and is
likely to continue to see, increased
efforts to use, or expand the use of,
keyword advertising by search engine
companies as they try to maximise this
revenue stream.3
However, keyword advertising raises
issues of possible trade mark
infringement, as the term triggering the
targeted ad or sponsored search result
may be the trade mark of a company
other than that featured in the triggered
ad. This newly emerging form of
potential trade mark infringement has
been met with a series of trade mark
infringement actions in the United
States and Europe. This article will
look at the current state of the law with
respect to this issue in those
jurisdictions and assess how Australian
courts would be likely to treat this
issue.
How
keyword
works
advertising
Keyword advertising works through
the sale or auctioning of search terms
by a search engine company or its
advertising subsidiary.4 The advertiser
selects (with or without the assistance
of the search engine company or its
advertising subsidiary) keywords that
20
it wishes its advertising linked to when
a search is conducted using that search
engine and nominates the maximum
amount it is willing to pay when a user
clicks on the triggered ad. Whenever
that search engine is used to conduct a
search using any of those keywords,
the advertiser’s advertisement will
appear either as a banner or text ad on
the search results page or among the
search results.
The legal issue
Traditionally, trade mark infringement
disputes have concerned allegations of
use of a mark that is substantially
similar to the mark of another in
connection with competitive goods or
services. Generally, the closer the
proximity of the goods or services and
the greater the similarity of the marks,
the greater the likelihood that trade
mark infringement will be found.
Disputes over the use of trade marked
terms as keywords used to trigger on­
line banner or text advertising, or to
influence the ranking of search results,
present additional issues: such use is
not necessarily in connection with the
goods and services being sold or
advertised, but is instead often a degree
or two more remote.
Moreover, although the person
entering the keyword will be aware of
the term he or she searched, they will
not necessarily associate the triggered
advertising with that keyword. For
example, internet users are accustomed
to banner advertising on web pages.
The advertising triggered by keywords
on search results pages does not appear
with any indication that it was
triggered by the keyword searched.
Thus, internet users will not
necessarily associate a banner ad
triggered by a keyword search with
that search.
Computers & Law June 2004
At the other extreme are sponsored
keyword triggered search results, such
as those generated by searches
conducted on Kanoodle, which are not
separated from non-sponsored results
and are ranked above the nonsponsored results on the search results
page.
With respect to text based advertising,
consideration must be given to the
impact of the location where the
advertising is placed, ie, how clearly
separate from the search results is it?
Consideration must also be given to
any language used to describe the
advertising. For example, Google
places such advertising under the
heading “Sponsored Links”, while
Yahoo! designates them as “Sponsor
Results.”
Text-based keyword advertising and
sponsored keyword triggered search
results add an additional consideration:
each triggered advertisement and
search result appears under a short
descriptive title that constitutes the link
to the linked webpage, followed by one
or two lines of information further
briefly describing the contents of the
linked page, followed by the URL or
web address of the linked webpage.
Other factors also serve to distinguish
keyword
advertising
from
the
traditional trade mark infringement
situation. For example, although the
advertising may be triggered by a trade
marked keyword, that trade marked
term will not necessarily be displayed
by the advertisement. Instead, the
advertisement may display the trade
mark of the advertiser, or it may
contain language that does not
associate the trade mark with any
specific company.
Finally, although the ad or search
result triggered by the keyword
contains only a limited amount of
Internet Keyword Advertising and Trade Mark Infringement
information, the web pages to which it
links often offer considerably more,
making it entirely clear whose web
page it is.
Thus, an assessment of trade mark
infringement in the context of keyword
advertising requires a decision as to the
point at which the infringement
determination should be made. Should
it be assessed at the time the search
results page is displayed, so that the
m e r e fact that the ad or search result is
triggered by a third party’s trade
marked term is the basis for the
infringement determination? Or should
it be assessed once the triggered results
have been considered, so that the web
page address, web page description,
and/or content and location of the ad
should also be taken into account? Or
should it be after the triggered ad or
search result has been clicked on and
the linked web page viewed?
A further question in relation to this
type of trademark infringement is who
should be liable for any infringement
that has occurred. Should it be the
internet search company that sells the
infringing keyword, the party that buys
the infringing keyword or both? If the
content of the triggered ad or search
result are to be considered in assessing
trade mark infringement, then should
the degree of each party’s control over
that content be taken into account in
attributing liability?5 Should the party
that controls the content of the
triggered result be responsible for
conducting a trade mark search prior to
use, so that the other party is absolved
of liability if infringement occurs?6
Litigating keyword disputes
The United States experience
In the United States, the ire of trade
mark owners who contend their trade
marks are being infringed by keyword
advertising has been directed primarily
at the internet search companies that
have sold such keywords, rather than
the advertisers who have bought them.
The P layboy case
The leading United States case on this
issue is the consolidated case P layboy
E n terp rises,
In c
v
N e ts c a p e
and
P layboy
E n te rp ris e s International, I n c
C o m m unications
C o rp
v E xcite,
That case concerned the specific
issue of whether search companies can
be found liable for trade mark
infringement for the sale to a third
party of another party’s trade marks for
use as search keywords to which that
third party’s banner ads, that do not
contain the trade marked terms, are
linked.
I n c .1
Playboy commenced proceedings in
1999 against Netscape and Excite for
trade mark infringement based on their
inclusion of Playboy’s trade marks
“playboy” and “playmate” within the
list of over 400 terms related to sex
and adult entertainment that Netscape
and Excite required adult-oriented
companies purchasing keyword banner
advertising to link to.
The United States District Court for
the Central District of California
denied a motion for preliminary
injunction and then threw out the case,
awarding summary judgment to
Netscape and Excite.8 On 14 January
2004, the United States Court of
Appeals for the Ninth Circuit reversed
the decision to award summary
judgment, holding that the claim
should be allowed to proceed and be
tried on its merits.9
While the Court of Appeals was not
called upon to make a final
adjudication of whether there had been
trade mark infringement, it did find
that genuine issues existed as to
whether Netscape and Excite’s sale of
“playboy”
and
“playmate”
as
keywords to which banner ads were
linked could constitute trade mark
infringement, and sent the case back to
the district court to be reconsidered.10
The Ninth Circuit held that Playboy
had presented sufficient evidence to go
to trial on the theory that the keyword
advertising was likely to create “initial
interest” confusion, a recognised basis
for trademark infringement under US
law.11
Playboy argued that Netscape and
Excite, in conjunction with advertisers,
misappropriated the goodwill of
Playboy’s marks by leading internet
users to competitors’ websites, and that
they did so by linking adult-oriented
advertisements to Playboy’s trade
marks, actively creating initial interest
confusion. More specifically, Playboy
argued
that
because
banner
advertisements, which did not identify
the source of the advertisement as
-
Searching For Trouble
Playboy or otherwise, appeared
immediately
after
users
typed
Playboy’s marks into the search field
of the defendants’ search engines and
hit search, some users may initially
believe that the unlabeled banner
advertisements triggered were links to
Playboy’s sites or to sites affiliated
with Playboy.12 In addition, many of
the advertisements instructed users to
“click here”. Because of their
confusion, users may follow the
instruction, believing they would be
connected to a Playboy site. Once they
followed the instructions to “click
here,” and accessed the site, the
damage would have been done, even if
the users realised “immediately upon
accessing” the competitor’s site that
they had reached a site “wholly
unrelated to” Playboy’s, as some users
may be perfectly happy to remain on
the competitor’s site. Such users
reached the site because of the
defendants’ use of Playboy’s mark.
Through initial consumer confusion,
the competitor “will ... have gained a
customer
by
appropriating
the
goodwill
that
[Playboy]
ha[d]
developed in its [ ] mark.”13 The court
held that precedent suggested that
evidence of such activities would be
sufficient to create a genuine issue as
to whether Netscape and Excite's
actions
constituted
trade
mark
infringement, precluding summary
judgment.
The court confirmed its conclusion as
to the existence of a genuine issue as to
whether Netscape and Excite's conduct
amounted to trade mark infringement
by applying the factors used in a
traditional trade mark infringement
analysis in that circuit, modified as
necessary to address the on-line, rather
than “bricks and mortar”, scenario of
the case. The court focused initially on
an expert study submitted by Playboy
establishing a strong likelihood of
initial interest confusion. The court
also took into account the strength of
Playboy’s trade marks, the close
proximity of the goods, the strong
similarity of the marks, and its
conclusion that consumer care in
searching was likely to be quite low.14
The court also considered evidence as
to Netscape and Excite’s intent.
Although it did not find that the
evidence established that Netscape and
Excite intended to confuse internet
users, it held that such intent could be
Computers & Law June 2004 21
Internet Keyword Advertising and Trade Mark Infringement
inferred from the facts, as the evidence
suggested that Netscape and Excite did
nothing to prevent click-throughs that
resulted from confusion, and profited
from such click-throughs.15 Playboy
introduced evidence that Netscape and
Excite actively controlled the content
of advertisements on their pages in
other contexts, and could have reduced
confusion in this context by requiring
advertisers to identify themselves on
the triggered banner ads, but did not do
so as that would have reduced click­
through rates. The court found that the
most telling fact was that Netscape and
Excite refused to remove “playboy”
and “playmate” from their lists of
keywords even when advertisers
requested that they do so. The court
held that this suggested that the search
engine operators used the terms to
trade on Playboy’s good will.
The P layboy court was only required
to determine the narrow issue of
whether a genuine issue existed as to
whether the sale of a third party’s trade
marks for use as keywords that
triggered advertising that did not
identify its source could constitute
trade mark infringement by the search
engine company selling the keywords.
It was not required to consider whether
trade mark infringement may be found
if the triggered ad contained
information that made it clear that it
was not sponsored or associated with
the party holding the trade mark rights
in the term searched. However, a
separate concurrence was written
specifically to reject dicta in the
leading Ninth Circuit decision on
initial interest confusion, B ro o k field
C o m m unications I n c v West C oast
E n terta in m en t C o rp , ‘6 which suggested
that trade mark infringement may
occur
even
where
banner
advertisements are clearly labelled.17
The concurring opinion held that there
is a big difference between misleading
a web user into visiting another
website based on an unlabelled ad and
providing a clearly labelled choice. It
considered that only the former should
constitute trade mark infringement.
Soon after this decision by the appeals
court, and before a final resolution of
the infringement issues could be
reached by the district court, the case
was settled on undisclosed terms.
Thus, although the P la y b o y case gives
considerable guidance as to how US
22
Computers & Law June 2004
courts (or at least those in the Ninth
Circuit) will treat the narrow issue of
the sale of a third party’s trade marks
for use as keywords that trigger
advertising that does not identify its
source, there remains considerable
uncertainty with respect to all other
aspects of the relationship between
keyword advertising and trade mark
law.
Other United States cases
Although the P layboy case is the only
United States case to have proceeded
to judgment, whether first instance or
on appeal, the issue of keyword
advertising based
trade
mark
infringement is still pending in
numerous other cases. Threats of trade
mark infringement litigation have also
been used to modify search engine
advertising practices in
specific
instances. These actions and threats
reveal the uncertainty as to what does
and does not constitute trade mark
infringement in the context of keyword
advertising.
Google has been the subject of the
most challenges with respect to its
keyword advertising practice. In July
2002, American Blind and Wallpaper
Factory Inc (“ABW”) accused Google
of trade mark infringement for selling
keywords that infringed its trade
marks. ABW demanded that Google
stop selling 35 different keywords
similar to its trade marks to
competitors.18 In September 2002,
Google agreed to remove keyword ads
linked to American Blind’s trade
marks “American Blind & Wallpaper
Factory”, “American Blind Factory”
and “DecorateToday”, but stated that it
could not block variants of those terms,
such as “American blind” or
“American wallpaper” because they
were descriptive terms that others had
a right to use. Google also stated that
its matching algorithms would return
an ad for “American blinds” if a user
searched for a generic term such as
“wallpaper.”
In November 2003, ABW again wrote
to Google, this time threatening legal
action. Google responded by filing its
own case with the United States
District Court for the Northern District
of California.19 It sought a court ruling
that its actions did not constitute
infringement of ABW’s trade marks.
-
Searching For Trouble
ABW then filed its own suit in the
United States District Court for the
Southern District of New York against
Google and its partners AOL and
Netscape.20 ABW asked the court to
consider its claims and dismiss
Google’s suit. Among the relief
requested by ABW is an injunction
prohibiting the search engines from
posting
“listings
for
ABW’s
competitors when Internet users run a
search on Defendants’ search engines
using keywords that are identical or
substantially similar to the [ABW]
Marks.”21 In other words, ABW seeks
a prohibition of any listings, whether
paid or unpaid, of its competitors when
the search query contains the allegedly
confusing phrases.
Google has also faced requests from
numerous other companies in the
United States to stop selling
advertising linked to the requester’s
trade marks. Dell and Hewlett-Packard
were successful in this endeavour.22 In
2003, eBay asked Google not to sell
advertising based on a 13 page list of
keywords. Google agreed not to sell
advertising based on eBay’s trade
marks, but not the other listed terms.
Problems for other search
engines in the United States
Google is not the only search engine
company to have experienced legal
troubles in the United States over the
sale of keyword-based advertising.
Mark Nutritionals, which produces and
markets the Body Solutions weightloss program, filed separate suits
against search engine companies
AltaVista, FindWhat, Kanoodle and
Overture
for
selling
keyword
advertising linked to the Mark
Nutritionals
trade
mark
“body
solutions” 23 Mark Nutritionals claimed
that a search conducted on AltaVista
for “body solutions” placed Mark
Nutritionals 36th in the search results.
The same search using Kanoodle did
not produce a link to Mark Nutritionals
at all. Mark Nutritionals did not sue
Google because a search for “body
solutions” using that search engine
yielded Mark Nutritionals as first in
the list of results. Both Google and
AltaVista searches for that term
yielded competitors’ ads adjacent to
the search results.
Internet Keyword Advertising and Trade Mark Infringement - Searching For Trouble
Estee Lauder brought a similar suit
against
online
perfume
seller
Fragrance Counter and search engine
Excite in 1999 over Fragrance Counter
banner ads being triggered by searches
for Estee Lauder’s trade marks “Estee
Lauder”, “Clinique” and “Origins”.24
The suit was settled in August 2000,
with Fragrance Counter agreeing, inter
alia, not to use Estee Lauder’s trades
marks in this manner. Estee Lauder
later settled with Excite in the United
States, and won an injunction in a
similar suit filed in Germany
(discussed below).
The United Kingdom goes in a
different direction
in March 2004, the United Kingdom
Court of Appeals issued its judgment
in R e e d E x e c u tiv e v R e e d B u sin ess
Inform ation ,25 indicating that United
Kingdom courts view this issue very'
differently and are considerably less
likely than United States courts to find
that keyword advertising constitutes
trade mark infringement.
Reed Executive owned a nationwide
employment agency in the United
Kingdom and registered “Reed” as a
trade mark for employment agency
services. The Reed Elsevier group
published a number of magazines and
eventually developed a website at
www.totaljobs.com advertising jobs.
Reed Elsevier paid Yahoo! for a
“totaljobs” banner ad linked to the
search terms “recruitment” and “job”
and was given a free link for searches
of its own name. Reed Elsevier chose
“Reed” rather than “Reed Elsevier” as
this additional search term. As a result,
if someone searched on Yahoo! using
the terms “recruitment”, “job” or
“Reed”, the “totaljobs” banner ad
would be caused to appear along with
the search results.
The Court of Appeals held that it could
not see how causing the “totaljobs”
banner ad, which did not include any
use of the term “Reed”, when a search
was conducted using that term, could
amount to trade mark infringement
under the likelihood of confusion
standard.26 In reaching its decision, the
court significantly stated:
“T h e w eb -usin g m e m b e r o f the
p u b lic
knows
that all sorts
of
b a n n ers a p p e a r w hen h e o r sh e
d o es a s e a rc h a n d they a re o r
m ay b e t r i g g e r e d by so m eth in g in
the s e a rc h . H e o r s h e also knows
that
sea rch es
results
—
p ro d u ce
re s u lts
fu zzy
with
m u ch
mark infringement where the trade
marked keyword triggers an ad that
does not include the trade marked term
in any way.
ru b b ish th ro w n in. T h e idea that
a s e a rc h u n d e r the n a m e R e e d
w ould m ake a n y o n e think th ere
was a tra d e c o n n e c tio n betw een a
totaljobs
banner
m aking
no
r e fe r e n c e to t h e w o rd “R e e d ” a n d
R e e d E m p lo y m e n t is fa n cifu l. ”21
The court stated that infringement may
still be found based on the likelihood
of confusion of someone who clicked
on the banner, but that such
infringement would be based on the
content of the underlying website, not
the banner.28
The court also held that the use of the
term “Reed” to trigger a banner ad also
did not amount to passing off. The
court cited the classic example of
passing off — where a trader having
accepted an order for brand X supplies
brand Y in such circumstances that the
customer is unlikely to notice the
substitution and is thus misled, and
stated:
“ That is a h u n d r e d m iles fr o m a
consum er
c o n d u c tin g
a
s e a rc h
u n d e r the n a m e R e e d a n d fin d in g
a b a n n e r w h ich on its f a c e has no
co n n ectio n with his s e a rc h term.
A gain, i f h e click s th ro ugh a n d
fin d s m islea d in g m a teria l on the
site, th ere c o u ld b e p a s s in g o f f —
but that w o u ld b e as resu lt o f
what is on th e site, not the Yahoo
,,29
use.
The R e e d case demonstrates a
fundamentally different approach to
the issue of keyword advertising based
trade mark infringement than that
adopted in the United States cases
discussed above. In those cases, the ire
of the trade mark holder was largely
directed against the search engine
company selling its trade marks as
keywords. The buyer of such keywords
received little attention. In the R e e d
case, the action was brought solely
against the keyword buyer. The search
engine company that sold the trade
marked term as a keyword was not
even named as a party. Additionally,
the R e e d case indicates that United
Kingdom courts, unlike their United
States counterparts, are not prepared to
find trade mark infringement on the
basis of initial interest confusion, and
thus, are far less likely to find trade
The
view
continental
European
Actions for trade mark infringement
based on the sale of keyword
advertising have also been brought in
France and Germany.
France
Four infringement actions have been
commenced in France to date, all
against Google. Google’s sale of
French travel companies Viaticum and
Lutecel’s trade marks “bourse des
vols” (market for flights) and “bourse
des voyages” (market for travel) as
keywords was held to constitute trade
mark infringement under French law.
Google was ordered to pay 75,000
Euros as damages.30 In reaching its
decision, the V iaticum /L utecel court
went considerably further than the
United States P la y b o y decision,
holding that when searches are done on
registered trademarks, Google should
“find
the
means
to
block
advertisements by third parties who
have no right to these trademarks.”
Infringement actions commenced by
Louis Vuitton SA,31 Rentabiliweb,32
and AXA,33 against Google remain
pending.
Germany
Three trade mark infringement actions
based on the sale of a third party’s
trade mark as a keyword search term
have been commenced in Germany:
two against the search engine company
only (Google in both instances) and
one against the search engine company
(Excite) and the advertiser (Fragrance
Counter).
In
G m b H v G o o gle
an interim injunction was
granted prohibiting Google from
displaying a sponsored link for the
domain name “preisserver.de” in the
result page for a search with the
keyword
“Preispiraten”
(price
pirates).34
Metaspinner
has
subsequently accused Google of
breaching the injunction by continuing
to allow advertisers to use the term.35
M eta sp in n er
D eu tsch la n d ,
Computers & Law June 2004 23
Internet Keyword Advertising and Trade Mark infringement
In N em etsch ek A G v. G o o g le, the court
held that Google was not liable for use
of a trade marked keyword by an
advertiser.36 The N em etsch ek court
held that Google could not be held
liable for trade mark infringement as
Google does not itself use such terms
for advertising and is not responsible
for the keywords its advertisers
choose.
The court further held that Google did
not have a duty to constantly check the
keywords it sold to assess whether they
were trade marked by a third party
because it was not feasible for it to do
so due to the high number of
keywords, the numerous variations of
those keywords and the lack of
awareness
of possible
licence
agreements.
As indicated above, Estee Lauder
brought an action against Fragrance
Counter and Excite over Fragrance
Counter banner ads being triggered by
searches for Estee Lauder’s trade
marks.37 The Hamburg District Court
held that use of the trade marked terms
in the triggered banner ads did not
amount to trade mark use, and thus
was not infringement of the Estee
Lauder trade marks. The court
however entered an injunction against
Fragrance Counter and Excite, and
ordered each to pay damages to Estee
Lauder for breach of the German Law
on Unfair Competition.
W hat does
Australia?
this
mean
for
The issue of the use of trade marked
terms as keywords used to trigger on­
line banner or text advertising, or to
influence the ranking of search results,
has yet to be addressed by an
Australian court. However, some
guidance can be drawn from the cases
discussed above.
Under Australian law, a trade mark
owner whose trade mark is used to
trigger on-line banner or text
advertising, or to influence the ranking
of search results, has potentially three
causes of action:38
1.
24
if the trade mark is registered, the
trade mark owner may bring an
action
for
trade
mark
infringement if the triggered
result contains the registered
trade mark (or a mark which is
Computers & Law June 2004
substantially identical with, or
deceptively similar to, the
registered trade mark) and the
triggered result relates to goods or
services for which the mark is
registered in Australia - or if it is
a very famous brand, even in
respect of different goods or
services - if such use is harmful
to the trade mark owner (section
120 of the T ra d e M arks A ct 1995
(Cth);
2.
irrespective of whether the trade
mark is registered or not,
(a) the use could amount to
“passing o ff’, such as
“switch-and-sell” marketing
(a famous example is the
offering of another white
rum when someone asks for
Bacardi); and/or
(b) the use could breach section
52 of the T ra d e P ra ctices
A ct 1 9 7 4 (Cth) if it is held to
be misleading, deceptive or
false.
-
Searching For Trouble
the ‘deceptive similarity’ of a mark
used in the triggered banner ad to the
trade mark, the greater the likelihood
that the banner ad will be held to
infringe that mark.
The R e e d and P layboy cases only
addressed the specific issue of banner
advertising triggered by a keyword
search. However, as discussed above,
such searches may also trigger text ads
or influence the ranking of search
results. With respect to such triggered
results, the R e e d court’s stated
justification
for
finding
no
infringement becomes questionable.
As quoted above, the R e e d court based
its holding of non-infringement on its
conclusions
about
web
users’
understanding of the results generated
or triggered by a keyword search. The
court made a specific statement about
web users’ understanding of the
relationship of banner ads to the
keyword searched, but also generalized
beyond banner ads and, in dicta, stated
that “[t]h e w eb -u sin g m e m b e r o f the
p u b lic
...
also
knows
that s e a rc h e s
p r o d u c e fu zzy results -
results with
If this dicta
is followed, then courts will treat all
forms of triggered result equally,
irrespective of whether, for example,
they are displayed with or separate
from the actual search results.
m u ch ru b b ish throw n in, ”
Trade mark infringement
Australian courts have yet to consider
the issue of initial interest confusion.
Although it is unknown whether such
an argument was raised in the R e e d
case, the language quoted above from
that case suggests that United
Kingdom courts would be unlikely to
recognise such a basis for finding trade
mark infringement. In light of the
strong similarity in language between
section 120 of the T ra d e M a rk s A ct
1995 (Cth) and section 10(2) of the
T ra d e M arks A ct 3994 (UK) addressed
in R eed , it is likely that an Australian
court would be reluctant to adopt the
doctrine of initial interest confusion
into Australian trade mark law.
Confronted with the issue addressed by
the R e e d and P layboy courts of a trade
marked term being used as a keyword
to trigger a banner advertisement that
did not contain that term, it is likely
that an Australian court would apply a
trade mark infringement analysis as
close as possible to that which it
applies in the “bricks and mortar”
world, as those courts did. Using such
an analysis, an Australian court would
be likely to reach a result similar to
that of the R e e d court, ie, the greater
It is submitted that this dicta should not
be followed, as it is likely to go well
beyond the evidence before the R e e d
court. How internet users view banner
ads, which are entirely separate from
the search results and which likely
employ different typeface, colour
scheme, etc to the search results, is
likely to be very different from how
they view text ads that are placed
above, below or alongside the search
result, often in identical typeface and
colour scheme to the results
themselves, or sponsored search results
that are ranked above, but not
separated or distinguished in any way
from, non-sponsored results. It could
be
expected
that
the
more
indistinguishable the triggered result or
ad is from the other search results, the
more likely an internet user would be
confused as to the source of the
triggered result, or as to the
relationship between the triggered
result and the trade mark owner.
Thus, in assessing whether a triggered
search result infringes a trade mark, an
Internet Keyword Advertising and Trade Mark Infringement
Australian court should consider the
content, appearance and location of
that search result in its entirety. A
likelihood of confusion, and thus trade
mark infringement, should be more
likely to be found the less
distinguishable the triggered result is
from the other results.
Passing off
If the owner of a trade mark (whether
registered or not) that is used as a
keyword trigger brought an action for
passing off, it would need to
demonstrate that it had an established
reputation in its trade mark, that the
use of that trade mark as a keyword
trigger misrepresented an association
between the seller/buyer of that
keyword and the trade mark owner,
and that the trade mark owner had
suffered damage as a result.
As indicated above, the R e e d court also
addressed this cause of action. The
court held that the use of a trade
marked keyword to trigger a banner ad
that “on its face has no connection
with” the trade mark is “a hundred
miles from” passing off. Due to the
close similarity between the UK and
Australian law of passing off, it is
likely that an Australian court would
reach a similar decision to the R e e d
court if presented with the same facts.
The closer the apparent connection
between the triggered result, based on
a combination of its content,
appearance, and location, and the trade
marked search tenn, the more likely an
Australian court would be to consider
the triggered result to amount to
passing off.
The Trade Practices Act
The third ground for a trade mark
owner to assert its rights with respect
to the use of its trade mark as a
keyword search term is under section
52 of the T ra d e P ra c tic e s A ct. Section
52 prohibits misleading or deceptive
conduct in trade or commerce in
Australia, or in trade or commerce
between Australia and a place outside
Australia. “Misleading and deceptive
conduct” has been construed to mean
conduct that does, or is likely to, lead
persons into error.39 It would thus be
necessary for a person complaining of
the use of the trade mark to establish
that relevant consumers were led into
error in fact or likely to be so.
It is likely that similar considerations
to those discussed above with respect
to trade mark infringement and passing
off will also influence an Australian
court’s decision with respect to this
cause of action, so that the closer the
apparent connection between the
triggered
result,
based
on
a
combination of its content, appearance,
and location, and the trade marked
search term, the more likely an
Australian court would be to consider
the triggered result as leading persons
into error and amounting to a breach of
the T ra d e P ra c tic e s A ct.
Searching For Trouble
-
bow in the form of the
T ra d e P ra ctices
Act.
1
See,
e .g .,
h tlp ://w w w .c lic k x .c o m /n e w -s /
a r t i c l e .p h o /1 7 3 0 8 1 1 .
h ttp s ://w w w . g o o g le ,
c o m /a d s e n s e /
2
G o o g le ’s
know n
k e y w o rd
as
a d v e r tis in g
“ A d w o rd s” ,
a c c o u n t fo r 5 0 - 7 5 %
SU S
1
is
p ro g ra m ,
e s tim a te d
to
o f G o o g le 's e stim a te d
b illio n
2003
r e v e n u e s.
h ttp :/A v w w .k s a t.c o m /m o n c v /2 7 8 5 0 1 9 /d e ta il.
h tm l.
Y a h o o ! r e c e n tly a n n o u n c e d a h ig h ly
s u c c e s s fu l 2 0 0 4 firs t q u a rte r, p o s tin g a S U S
101 m illio n p ro fit, d u e in p a rt to su rg in g ad
reven u es,
h t t p :// n e w s .c o m .e o m / 2 10 0 - 1 0 3 8 -
5 1 8 6 9 0 8 . h tm l? ta g = n l
3
h t t p ://w w w .k s a t .c o m /m o n e v /2 7 8 5 0 1 9 /
d e ta il.h tm l
4
See
h ttp sv ’/a d w o rd s . g o o g l e .c o m /s e l e c t /,
h t t p ://w w w .c o n tc n t.o v e r tu r e .e o m /d /U S m /a v
s /in d c x .ih tm l.
h ttp s ://s a f e .k a n o o d le .c o n t'
c lie n t s e r v ic e s /lis tin u s /in d e x .c o o l
Conclusion
5
Keyword advertising is becoming an
increasingly important source of
advertising revenue for internet search
companies and an increasingly
important form of advertising for
companies wishing to advertise on the
internet. This trend appears destined to
continue, with the use of keyword
advertising continuing to increase.
However, some of the keywords being
sold and bought by these entities are
the trade marks of third parties. This is
also likely to continue to increase.
As a result of this practice, trade mark
owners have begun to mobilise to
protect their intellectual property, with
a number of internet search companies
as well as advertisers already involved
in trade mark infringement cases in the
United States and Europe.
Although decisions on this issue are
still relatively few, United States and
United Kingdom courts have already
indicated that they are likely to treat
this issue very differently, the United
States being relatively more likely to
find trade mark infringement (on the
basis of the United States doctrine of
initial interest confusion), with the
United Kingdom being less likely to
find trade mark infringement (or
passing off).
Although Australian courts are yet to
address the issue, it is likely that they
will follow United Kingdom precedent
due to the strong similarity between
United Kingdom and Australian trade
mark and passing off law. However,
Australian trade mark owners also
have another potential string to their
G o o g l e ’ s “ T e r m s o f S e r v ic e ” , f o r e x a m p le ,
s ta te th a t a d v e r tis e r s a r e re s p o n s ib le fo r the
k e y w o rd s an d ad t e x t th a t th e y c h o o s e to use
o n G o o g l e ’ s s e r v ic e s .
h t t p ://w w w .g o o » ie .
c o m /te r m s o f s e n d e e .h tm l
6
G o o g l e ’ s “ T ra d e m a rk C o m p la in t P r o c e d u r e ”
sta te s th a t G o o g le “ is n o t in a p o sitio n to
a rb itra te
tra d e m a rk
a d v e r tis e r s
d is p u te s
and
h t t p f /w w w ,g o o g le .c o m /tm
In ste a d ,
b e tw e e n
tra d e m a rk
G o o g le
w ill
the
o w n e r s .”
c o m p la in t.h tm l.
p e rfo rm
a
lim ited
in v e s tig a tio n o n ly i f it r e c e iv e s a c o m p la in t.
I f th e c o m p la in t c o n c e r n s a U n ited S ta te s or
C a n a d ia n tra d e m a rk , it w ill o n ly in v e s tig a te
w h e th e r
th e
exact
tra d e
m a rk e d
te rm
is
b e in g u s e d in ad t e x t. I f th e c o m p la in t is
w ith r e s p e c t to a tr a d e m a rk fro m a n o th e r
ju r is d ic tio n , G o o g l e ’ s r e v ie w
is lim ited to
e n s u rin g th a t th e a d v e r tis e m e n ts a t issu e are
n o t u s in g th e e x a c t tra d e m a rk e d te rm in the
ad te x t o r a s a k e y w o rd trig g e r.
7
3 5 4 F .3 d 1 0 2 0 (9 th C ir. 2 0 0 4 )
8
5 5 F .S u p p .2 d 1 0 7 0 ( C .D . C a l. 1 9 9 9 )
9
3 5 4 F .3 d 1 0 2 0 ( 9 th C ir. 2 0 0 4 )
10
The
C o u rt
c o n s id e r e d
and
of
th e
E x c i te
A p p e a ls
in d ic a te d
th a t
it
issu e o f w h e th e r N e ts c a p e
w ere
d ir e c tly
or
m e re ly
c o n tr ib u te d ly lia b le to b e a tr ic k y q u estio n
th a t it d id n o t n e e d to d e c id e .
11
“ Initial
in te re s t
c o n f u s io n
c o n f u s io n
th a t c r e a te s
co m p e tito r’s
p r o d u c t.
is
c u s to m e r
in itial in te re st in a
A lth o u g h
d isp elled
b e f o re an a c tu a l s a le o c c u r s , initial in terest
c o n f u s io n im p e r m is s ib ly c a p ita liz e s on the
g o o d w ill
a s s o c ia te d
w ith
th e r e f o r e
a c tio n a b le
in f r in g e m e n t.”
354
2004)
12
m a rk
an d
is
tra d e m a rk
F .3 d
1020
(9 th
C ir.
at [2 ]
Id . a t
[3 ].
The
b a n n e r ad c le a r ly
o v e r tly
th o s e
a
co m p ared
co u rt
n o te d
id e n tifie d
P la y b o y 's
o f th e a d v e r tis e r , n o
th a t i f the
its s o u r c e o r
p ro d u c ts
initial
to
in terest
c o n f u s io n w o u ld o c c u r . Id. a t n o te 16
13
Id
14
T h e c o u r t b a s e d th is la tte r a s s e s s m e n t on the
fact
th a t
th e
p r o d u c ts
in v o lv e d
w e re
in e x p e n s iv e a n d on its p re su m p tio n th at the
a v e ra g e
se arch er
s e e k in g
a d u lt-o rie n te d
Computers & Law June 2004 25
Internet Keyword Advertising and Trade Mark Infringement
m a te ria ls on th e in tern e t is e a s ily d iv e rte d
24
fro m a s p e c ific p ro d u c t he o r sh e is s e e k in g
2 4 4 2 1 7 .h t m l
i f o th e r o p tio n s , p a r tic u la rly g ra p h ic o n e s ,
a p p e a r m o r e quiGkly. Id. a t [6 ]
15
Id
h t t n :// n c w s .o o m .c o m / 2 1 0 0 - 1 0 1 7 3 -
[ 2 0 0 4 ] EW C A (Civ) 1 5 9
26
UK
does
35
h t t p ://w w w .c lic k z .c o m /n e w s /a itic lc .p h p /
3350371.
25
la w
Searching For Trouble
-
not
c o n s id e r
lik e lih o o d
of
36
h ttp ://w w w . intern.de/news/5147.html .
37
In re Estee Lauder Cosmetics Ltd. (D is t. C t.
H a m b u rg , F e b r u a r y 1 6 , 2 0 0 0 ) .
c o n f u s io n w h e re th e m a rk s an d s e r v ic e s o f
th e tra d e m a rk o w n e r a n d a lle g e d in frin g e r
16
1 7 4 F .3 d 1 0 3 6 (9 th C ir. 1 9 9 9 )
17
3 5 4 F .3 d 1 0 2 0 (9 th C ir. 2 0 0 4 )
18
h ttp ://w v v w .c 1i c k z .c o m /n c w s /a r tic lc .p h p /
a re id e n tic a l - th e “ id e n tity te s t” - b u t d o e s
3285971
19
d e c e p tiv e c o n d u c t b y a c o r p o ra tio n in trad e
Id. a t [ 1 4 1 ]
29
Id. a t [ 1 4 3 ]
30
Societe Viaticum et Societe Luteciel contre
Societe Google France, T rib u n a l d e G ra n d e
In s ta n c e
o c to b r e
N e v v s l e tte r s .a s p ? I D = 4 5 0 & A r tic le ^ 2 4 9 1
or co m m erce. T he
d e N a n te r r e , 2 i m e c h a m b re ,
2003
a v a ila b le
Products Ltd v Bordenb Inc. ( 1 9 9 0 ) 1 7 IP R
1 a t 7 (L d O l iv e r ), a ffirm e d in Cat Media
Pty Ltd v Opti-Healthcare Pty Ltd [ 2 0 0 3 ]
13
FCA
at
h ttp ://w w w .c n n .^ 1 1 1 /2 0 0 3 /1 E C U /
Parkdale Custom Built Furniture Pty Ltd v
Puxu Pty Ltd ( 1 9 8 2 ) 4 2 A L R 1 at 6 (G ib b s
b i z t e c h /1 0 /2 4 /f r a n c e .g o o g l e .a p /
C J).
39
31
- 5 0 6 1 8 8 8 .h t m l
h t t p ://s e a r c h e n g in c w a tc h .c o m /s e r e p o r t/
1 3 3 a t [ 4 2 ] (B r a n s o n J ) is d ir e c te d to
th e g e t-u p o f a t r a d e r ’ s g o o d s.
7
http ://\ v w w .k s a t.c o m /m o n e v /2 7 8 5 0 1 9 /
'c la s s ic trin ity ' te s t fo r
p a s s in g o f f e s p o u s e d in Reckitt & Colman
h ttp ://w rwrw .iu r is c o m .n e t',ip t/v is u .p h p ? I D ^ 3 6
d e ta il.h tm l. h ttp ://n e \ v s .c o m .c o m /2 1 0 0 - 1 0 2 4
c o n d u c t.
c o u r s e o f tr a d e .' S e c tio n 5 2 o f th e Trade
Practices Act is d ire c te d to m is le a d in g o r
28
h ttp : 7 w w w ,hk 1a w , c o m /P u b l ic a tio n s /
to c o m m e r c ia l
th a t 'u se a s a tr a d e m ark ' m u st b e 'in the
(N .D . C a l. 2 0 0 3 )
21
is d ir e c te d
S e c tio n 17 o f th e Trade Marks Act s p e c ifie s
[2 0 0 4 ] E W C A (C iv ) 1 5 9 at [1 4 0 ]
Google Inc. v. American Blind & Wallpaper
Factory, Inc., C iv il C a s e N o . 5 : 0 3 - 0 5 3 4 0
American Blind & Wallpaper Factory, Inc. v
Google Inc. et al ( S .D .N .Y ., J a n . 2 7 , 2 0 0 4 )
23
It is to b e n o te d th a t e a c h o f th e s e c a u s e s o f
a c tio n
id e n tity .
27
20
22
38
re q u ire its c o n s id e r a tio n w h e re th e re is n ot
32
Id
33
h t t p :// n e w s .c o m .c o m / 2 1 1 0 - 1 0 3 8
0 2 / 0 2 - a l t a v i s t a .d o c .
h ttp ://s e a r c h e n g in c w a tc h .c o m /s e r e p o r t
3-
/0 2 /0 2 - f i n d w h a t.d o c .
5 2 0 0 1 9 3 . h tm l? n a r t= r s s & ta g ~ le e d & s u b i~ n
h ttp ://s e a r c h e n g in e w a tc h .e o m /s e r e p o rt/Q 2 /0
ew s.
2 -k a n o o d le .d o c .
34
h ttp ://s e a r c h c n g in e w a tc h .c o m /s e r e p o r t
h ttp ://g n s o .ic a n n .o r g /m a ilin g lis ts /a r c h iv e s /re g is tr a r s /m s g O l 19 0 .h t m l .
/ 0 2 /0 2 - o v e r t u r e .d o c
Victory for P2P users and ISPs in Canada
M e lis s a L e s s i a n d S y d n ey B ir c h a ll, F r e e h i l l s
Melissa Lessi is a solicitor in the Technology, Media and Telecommunications section of Freehills’ Corporate group. Sydney
Birchall is a solicitor in Freehills’ Intellectual Property group.
1 Background
There have been many high-profile
instances of record companies ‘getting
tough’ on music file swapping over the
internet in recent times.1 In one such
case,2 B M G C a n a d a I n c v J o h n D o e
[2004] FC 488, the Federal Court of
Canada held that uploading music files
into shared folders on peer-to-peer
(P2P) networks does not constitute
copyright infringement.
The plaintiffs, collectively referred to
as the Canadian Recording Industry
Association (CRIA), brought a motion
seeking pre-action discovery from five
internet service providers (ISPs) of the
identity of customers (Network Users)
alleged to have illegally traded in
music downloaded from the internet.
The Network Users were the
defendants to the action.
To succeed, the plaintiffs needed to
satisfy a range of criteria. These
26
Computers & Law June 2004
criteria included establishing a prima
facie case of infringement of copyright
by the defendants,3 and proving that
the public interest in disclosure
outweighed privacy concerns. Justice
von Finckenstein held that the
plaintiffs failed to satisfy these criteria,
among others.4
2
Copyright infringement
2.1 The plaintiffs’ submissions
The plaintiffs submitted that the
Network Users were infringing
copyright by:
•
installing a P2P application
(program) on their computers;
•
copying files to shared directories
on their computers;
•
connecting their computers to the
internet;
•
running the P2P application while
on the internet; and
•
making the files in the shared
directories available for copying,
transmission and distribution to
any one of millions of users of the
P2P service.
It was submitted that these activities
infringed the exclusive rights of
copyright holders under the Canadian
C o p y righ t A ct, RS 1985, c C-42
(Canadian Act) because the Network
Users were:
•
reproducing sound recordings;
•
authorising the reproduction of
sound recordings;
•
distributing unauthorised copies
of the sound recordings; and