Australia – Court approves business’s use of a third party’s trademarks as AdWords in limited circumstances

Thinking of optimising your search results with a competitor’s trademark? This new court decision means advertisers must tread carefully.

 It’s a common practice used by businesses to optimise their search engine results with Google: Keywords are purchased through Google Adwords which may include names or trademarks owned by a competitor in order to piggyback their own sponsored links on the results of a search for their competitor’s service.

Cheeky, yes. But does this constitute trademark infringement?

The Federal Court recently clarified the position in Australia regarding an advertiser’s use of a competitor’s trademarks as Google Adwords in the decision of Veda Advantage Limited v Malouf Group Enterprises Pty Ltd [2016] FCA 255.

Veda Advantage Limited, (a financial services company that generates personal credit reports), alleged that the use of the word “Veda” by Malouf Group Enterprises (a credit repair business) constituted an infringement of their trademarks and amounted to false or misleading and deceptive conduct under Australian Consumer Law.

What Malouf did

Malouf Group had purchased at least 86 keywords through Google Adwords which included or consisted of the word “Veda” so that when “veda” was typed into Google’s search engine, the results would include Malouf’s sponsored advertising links. In addition, the headings of some of Malouf’s sponsored links contained the word “Veda”.

The court held that simply using “Veda” as a Google Adword would not infringe Veda’s Trademark rights or contravene Australian Consumer law because the keywords themselves are not visible to consumers, and therefore did not suggest any association between the products and services of Malouf and the Veda brand.

As for the use of keywords in a sponsored link heading which is visible to consumers, the court held that there would still be no infringement provided that the words are only used to describe its services, which in this case included repairing Veda credit files for consumers. For example, “Fix your Veda History” did not infringe the Veda trademark as the keywords were not acting as a “badge of origin” for Malouf’s services, or attempting to advertise them under the Veda brand.

However, use of the word “Veda” in a visible advertisement heading entitled “Veda Report Centre”, was found to constitute trademark infringement and misleading and deceptive conduct as it did suggest a connection between Malouf and Veda brands.

The take home point

Simply bidding on or using another business’s trademark in circumstances where the word is not visible to consumers in online ad text, will unlikely contravene Google policies, trademark law or Australian Consumer Law. However, where such keywords are visible, care must be taken to ensure they are not used as a “badge of origin” for your products or services.

If you are in doubt as to the extent to which you can use a third party’s trademark in your online marketing strategies, contact us.