Is the use of a trade mark in AdWords an infringement?

The concept of ‘Googling’ has become a part of everyday life.  But does anyone ever stop to think how Google results are collated?  In the case of Veda Advantage Limited v Malouf Group Enterprises Pty Limited [2016] FCA 255 (Veda Advantage case) one company did just that, and they were not happy with the answer.  The case concerned the use of registered trade marks as keywords and in the title tags and descriptions of sponsored link advertising in the Google AdWords program.

What is Google AdWords?

The Google search engine displays two types of search results: organic results and sponsored links. Sponsored links are advertisements, which Google’s AdWords program allows advertisers to create, change, and monitor.  They are triggered by keywords privately supplied by the advertiser to Google.

Malouf Group Enterprises Pty Limited (Malouf) uses the Google AdWords program to advertise, promote and direct consumers to its websites.  One of the Google AdWords campaigns that Malouf has run, involves the use of 86 keywords that comprise or contain the word “Veda”, including “contact Veda”, “Veda login” and “Veda credit score”.

The facts of the Veda Advantage case

The plaintiff in the case was Veda Advantage Limited (Veda) and the defendant was Malouf.  Veda is the owner of the following registered trade marks:

• “VEDA”;
• “VEDA ADVANTAGE”;
• “VEDACHECK”; and
• “VEDASCORE”.

The trade mark issues in dispute

Veda alleged that Malouf’s use of the word “Veda” (in its various forms and combinations) as keywords and in the text of the sponsored links generated by the use of those keywords contravened s 120(1) of the Trade Marks Act 1995 (Cth).  Malouf denied that it infringed the registered Veda trade marks for the following reasons:

• firstly, its use of the Veda trade marks was and is not, use as a trade mark;
• secondly, it did not and does not use the Veda trade marks in respect of, or supply, services for which they are registered; and
• thirdly, in the alternative that the Court were to find that it did use the Veda trade marks as trade marks, it did so in good faith, to indicate the kind, intended purpose or some other characteristic of the services under s 122(1)(b)(i) or s 122(1)(c) of the Trade Marks Act 1995 (Cth).

(1) Did Malouf’s use of the word “Veda” involve use of the word “as a trade mark” within the meaning of s 120(1)?

The court distinguished between use of the word “Veda” in keywords and in the titles of the sponsored links.   The court held that Malouf’s use of the “Veda” keywords was not a trade mark use, as Malouf merely selected the keywords and provided them to Google, which was not use indicating a connection in the course of trade between the services provided by Malouf and the services provided by Veda.

Moreover, the same keywords could be acquired by anyone under Google’s AdWords program.  The keywords are also invisible to consumers.  The use of the “Veda” word marks in the titles of the sponsored links was more complicated, as the words are visible to consumers.  Ultimately, most of the uses of the “Veda” word marks in the titles were held to be descriptive of the services provided by Malouf, and thus did not constitute use as a trade mark. However, the court held that Malouf infringed the Veda trade marks in its sponsored link advertisements featuring the text “The Veda Report Centre” and “The Veda-Report Centre” for its Clean Your Credit business in October 2014.

(2) If Malouf did use “Veda” as a trade mark, did it do so in relation to services in respect of which the Veda trade marks are registered?

Malouf argued that it does not provide services in relation to Class 36.  Malouf does not in fact hold a licence to provide financial services and its websites state that it does not provide financial services.  Nonetheless, the court held that Malouf’s services (which include providing credit reports and information, advice and consultation relating to financial data, risk analysis and financial health assessment) are of the kind in respect of which the Veda trade marks are registered.

(3) If Malouf did use “Veda” as a trade mark, did it use the marks in good faith to indicate the kind or intended purpose of its services under s 122(1)(a)(i) or s 122(1)(b)?

The court held that while Malouf was assiduous in identifying keywords which would target individuals with Veda credit reports, it had not done so with the conscious and deliberative objective of undermining the registered owner of the “Veda” trade marks or the integrity of the “Veda” trade marks.  However, the court did note that the use of the “Veda” trade mark in “The Veda Report Centre” and “The Veda-Report Centre” in the titles to the sponsored link advertisements for the Clean Your Credit business was not a use in good faith.

Learning points / takeaways

The court concluded that the trade mark infringement claim was only made out in regards to using the “Veda” sign as a trade mark in the title of its sponsored link advertisements featuring the text “The Veda Report Centre” and “The Veda-Report Centre”.  This suggests that though uncommon, it is technically possible to infringe trade marks by using the Google AdWords program.  The use of such words may also constitute a breach of s 18 of the Australian Consumer Law, as it in fact did in this case.  As such, it is advisable to seek legal advice before using word trade marks in the Google AdWords program.

Links and further references

Cases

Veda Advantage Limited v Malouf Group Enterprises Pty Limited [2016] FCA 255

Legislation

Trade Marks Act 1995 (Cth)

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Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

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