Google’s main source of revenue is its ‘Adwords’ service. The service generates the ‘sponsored links’ or advertisements that you see at the top of a page of Google search results. Only after these sponsored links do you see the ‘organic results’ of your search.
The AdWords service permits advertisers to decide what keywords entered by a Google user will trigger their own advertisements or sponsored links. So for example, Nike might use the word ‘Nike’ as a keyword, so that when you search the word ‘Nike’, the sponsored links for Nike products appear at the top of your page of search results.
Until now, trade mark owners could have Google prevent third parties using the brand owner’s trade marks as keywords for the purpose of generating sponsored links. Google has now changed its trade mark and brand monitoring policy in Australia, which, effective from 23 April 2013, will allow bidding on trade marks as keywords, including by persons other than the trade mark owner.
High Court victory buoys Google
The policy change coincides with a recent decision of the High Court of Australia in which Google was cleared of misleading and deceptive conduct. On 6 February 2013, the High Court allowed Google’s appeal against the Federal Court’s judgment in favour of the Australian Competition and Consumer Commission that Google had breached the prohibitions against “misleading and deceptive conduct” under section 52 of the Trade Practices Act 1974 (now the Competition and Consumer Act).
Unanimously, the High Court held that Google had not itself engaged in misleading and deceptive conduct by displaying deceptive advertisements in its search results. The High Court held that sponsored links were in effect generated by the respective advertisers and not by Google. Buoyed by this outcome, the AdWords policy has now changed.
Previous Adword policy
Under Google’s previous policy, advertisers could be prevented from using a third party’s trade mark as a keyword in advertisements that targeted similar advertisement regions to the territorial reach of the trade mark. For example, an advertiser such as Nike could not maintain ‘Adidas’ as a keyword to trigger Nike’s own advertisements. Trade mark owners could previously invoke a simple, inexpensive and swift online mechanism to stop any such conduct.
New Adword policy
The new policy now permits advertisers to bid on a third party’s trade mark as a keyword in an advertisement for their own products or services. So, Nike could potentially select the trade mark of ‘Adidas’ to trigger its own advertisements as Nike’s own sponsored links and Adidas will have no recourse against Google.
Importantly, this policy change affects the use of trade marked terms as keywords, but does not otherwise alter the law on use of third party trade marks within the main text of advertisements, or other trade mark infringement issues.
What the new policy may mean to you as an advertiser or brand owner
The new policy means that trade mark owners will no longer be able to rely on the quick and easy central complaints procedure that was previously available to enable them to have such advertisements removed.
The new policy may be considered an advantage to some advertisers wishing to bid on and use a competitor’s trade mark as keyword triggers for their own advertisements. On the other hand, trade marks owners need to be aware that their competitors can now bid on their trade marks as keywords for their advertisements to potentially redirect Google traffic away from the trade mark owner’s site. The new policy could also prove problematic for traders who have a trade mark without a related AdWords campaign.
While the use of another’s trade mark in AdWords will not always be legal, much will depend on the circumstances of such use and resolution will most likely be more involved. The High Court’s decision means Google is under no obligation to prevent such use and disputes over such practices will now need to be resolved between the trade mark owner and the advertiser, which may prove more expensive, uncertain and time consuming.
If you would like advice or assistance in relation to the new AdWords policy, or any other trade mark matters, please contact Daniel Kovacs, Special Counsel on (03) 8600 8859 or email@example.com or Jeremy Goldman, Principal Lawyer, on (03) 8600 8886 or firstname.lastname@example.org
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