Competitors who use your trade marks as keywords may engage in infringement.
Ever type your trade mark into a search box only to get results to a competitor’s goods and services? Businesses that use someone else’s trade marks as keywords in web stores without the owner’s permission may engage in trade mark infringement, confirms a recent ruling of the Finnish Market Court.
Business owners naturally expect an online search using their trade marked terms will lead to their goods and services. Problems arise when a competitor or other third party captures a trade marked term as a keyword and directs people to goods and services that do not belong to right holder’s business operations.
Is this legal?
According to the Finnish Market Court’s ruling in Wellmen Oy v SOK (MAO:516-517/14), this type of online advertising is infringing. The court’s judgement was not appealed and is now final.
In its decision, the court held the use of a keyword that was identical with a registered word trade mark “Selätin” infringed rights based on the trade mark registration. The disputed keyword was used in a web store’s product search.
The Finnish Market Court referred to a judgment of the Court of Justice of the European Union (CJEU) in the Google AdWords case Google France and others v Louis Vuitton Malletier SA (C-236/08–C-238/08), and held the use of the keyword resulted in confusion regarding the “commercial origin” of the trade mark.
After the keyword “Selätin” was typed into a web store’s product search box, the result yielded a third party’s competing product instead of offering the product of a trade mark holder, which was not at all available. The products in question were considered identical. The webpage to a third party’s product appeared immediately after the search with the keyword was conducted. The trade mark was visible on the page after the search also.
In light of these circumstances, the court stated the average consumer was likely to be confused of the commercial origin of the product. This confusion endangered the basic function of a trade mark, which is to serve as an identification of origin. The confusion was not avoided even though the actual names of the marketed product, as well as its producer, were both available on the webpage. The trade mark owner had a right to prohibit the use of its trade mark as a keyword in connection with the other party’s product.
The thread of the Finnish Market Court’s reasoning followed the CJEU’s decision in the Google AdWords case, where the CJEU stated the origin function of a trade mark is adversely affected by keyword advertising if the advertisement does not enable the relevant audience to ascertain (or enables them ascertain only with difficulty) whether the goods and services originate from the owner of a trade mark.
Not only giving guidance for the national courts’ decision making, the CJEU’s interpretation also had an impact on major search engine keyword practices.
Nowadays, when a trade mark owner lodges a complaint, representatives from Google and Microsoft’s Bing investigate and may enforce certain restrictions on the use of a trade mark in advertising. Other search engine organisations have also initiated the same practice. At issue is whether the use of a trade marked term as a keyword, in combination with particular advert text, is confusing as to the origin of the advertised goods and services.
It appears likely that since the case assessed by the Finnish Market Court was successful based on the reasoning that the trade mark’s origin function was adversely affected by the keyword usage, the court made no further assessment of the use based on other functions of a trade mark. These functions were considered, among others, in the preliminary ruling in Interflora v Marks & Spencer (C-323/09), in which the CJEU acknowledged, in addition to the primary function (as a badge or origin), a trade mark may have a number of additional functions.
The CJEU indicated that trade mark owners may be able to take successful legal action whether or not the primary function of a mark is put at risk. This could be the case where a keyword takes unfair advantage of the distinctive character or reputation of a trade mark or where it causes damage to a distinctive character and reputation of a trade mark.
Nevertheless, it is still left for the national courts to determine these issues based on the facts and circumstances of the situation at hand. The original Interflora case is still unresolved, as the case was recently remitted to the High Court for retrial in the United Kingdom.
The decision of the Finnish Market Court is a welcome clarification on the scope of trade mark protection.
For trade mark owners, the ruling gives further comfort to claims against illegitimate use of a trade mark as a keyword in those instances where the consumer cannot identify a commercial origin of the goods and services appearing in context with the used keyword.
Furthermore, recent case law suggests that businesses should plan their keyword advertising carefully. It is advisable to go through your keywords and search functions to make sure you are not unintentionally indulging in a trade mark infringement.
Here are some tips you should consider to protect your trade marks and avoid keyword issues in your business operations:
• Monitor keyword usage by your competitors, third parties and major search engines
• Consider whether your distributors and resellers are using your trade marks as keywords and provide guidelines for such use
• Go through keywords and search functions used in your own business advertising and make sure your practices are appropriate
• Consider legal actions when necessary