Commercial Law – Trademark Infringement on Google AdWords

Whenever a business successfully builds a positive reputation in the marketplace and establishes a solid client base, there is always the potential for trademark infringement to become a problem. Competitors may attempt to use names, phrases, designs and colour schemes which are similar to your own in order to lure away your customers by causing them to mistakenly associate your positive reputation with the product or service which they are providing.

This is particularly the case in the online world, where branding is extremely important. Most people find what they are looking for online by typing a search term into a search engine’s web page and then following the links to relevant websites which the search engine returns. But how does the law of trademark infringement apply to the sponsored links, such as Google AdWords?

What is Google AdWords
AdWords is a service which Google offers under which business can pay to “sponsor” a word. When this word is typed into Google, links to businesses which have sponsored that word appear prominently on the right hand side of the web page. So for example, an electrical goods company might sponsor the phrase “Cheap TV” and whenever someone searches for this phrase the company’s advert will appear at the right hand side of the page. The contentious issue here is that Google will allow businesses to sponsor AdWords which are also the brand names or trade marks of competitors.

What is the law?
In July 2010 the European Court of Justice issued guidance on the circumstances in which one company may use a trademark of another company as an ad-word when delivering its judgment in the case of Portakabin Limited and Portakabin BV v Primakabin BV.

In this case Primakabin and Portakabin were rivals which manufactured the same line of products (portable accommodation/storage units). Primakabin had purchased the ad-word “portakabin” from Google, together with common mis-spellings of this word. This meant that whenever anyone typed “portakabin” into Google, they would see an advert for Primakabin’s products at the top-right of the screen. Portakabin sued, claiming that Primakabin were infringing on its trademark.

What about Google’s liability for trademark infringement?
The European Court of Justice decided that in cases where one company purchases an ad-word which is also a trademark of a competitor, there is not a trademark infringement as long as the advert makes it clear that there is no commercial connection between the company placing the advert and the company which owns the trademark. The issue which any court must consider is whether there is a likelihood that anyone who saw the advert after typing in a search term would be confused as to the origin of the goods or services which are advertised

The case also clarified that it is possible for a company to infringe on its competitors intellectual property rights by purchasing and using AdWords which are mis-spellings of the competitor’s trademark. In these cases the advertiser has the same duty to make it clear that it is not commercially connected with the company which owns the trademark.

What about Google’s liability for trademark infringement?
The issue of Google’s liability for trademark infringement by advertisers or service users who host content online has already been addressed by the European Court of Justice in the case of Google France v Louis Vuitton. The Court decided that Google is not liable for trademark infringements which are perpetrated by users of its services as long as it takes steps to remove any content which infringes on another party’s intellectual property rights as soon as is reasonably practicable after it has been informed of the infringement.