Addled by the interwebs

26 Oct 2016

Can you use a competitor’s brand name as your Google Adword? There is an answer to this oft-asked question and, as one would expect from a legal standpoint, it’s: “Yes, but…”

The Supreme Court of Appeal recently had to decide whether M-Systems Group’s use of its rival’s trademark ClearVu amounted to passing off. Cochrane Steel Products, the proprietor of the ClearVu mark, had traded in high-density mesh fences under its brand since 2008. At the time of instituting proceedings though, it did not have registered trademarks. It accordingly relied on the common law remedy of passing off.

To succeed, it had to show that it had a reputation in the mark ClearVu, and that M-Systems’ use of ClearVu as an Adword would be likely to cause confusion about whether the parties or their goods were related, or came from a common source.

Although Cochrane ticked the reputation box, it fell short in demonstrating that consumers were likely to be confused. The court found that we’re a savvy bunch of Internet users, and that when confronted with Internet search results, we’re used to “separating the wheat from the chaff”. Doing so is an easy exercise as the advertisements are clearly indicated and often positioned on another part of the screen. Even in the event of an unlikely foray onto an advertiser’s page, a consumer would quickly be able to spot their blunder. For those reasons, the court saw no likelihood of confusion arising.

So, where does the “but” come in? Well, Cochrane didn’t rely on a registered trademark so theoretically the question remains as to whether use of a registered trademark as an Adword would infringe. Given that the crux of the decision was that consumers would not be confused, it’s unlikely that having a registered mark would assist. The court would probably find that Adword use of such a mark does not affect the function of a trademark, which is to serve as a source indicator.

There is potentially scope for a trump card though, being a well-known registered trademark. In that instance, the test is whether use of the identical or similar mark is likely to take unfair advantage of, or to tarnish the reputation of, the well-known mark. It does not matter whether or not confusion will arise.

So, a potential loophole for rights holders? Quite possibly.

(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)

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