Keywords – Yours, or Your Competitors?

Recently decided US cases provide more pragmatic and realistic approaches to trademark infringement using keywords.

In Toyota Motor Sales v. Tabari the court recognised that online shoppers are pretty savvy about what they are doing. “They skip from site to site, ready to hit the back button when they’re not satisfied with a site’s contents . . . consumers don’t form any firm expectations about the sponsorship of a website until they’ve seen the landing page — if then.”

In that case the court refused to uphold an injunction stopping a car sales yards from using the trademark "Lexus" in domain names.

In Network Automation, Inc. v. Advanced Systems Concepts, Inc the court looked at the use of infringement of trademarks in the use of keyword search terms.

As close competitors, Advanced systems purchased the use of a keyword "activebatch", which just happened to be the name of Network's main product. Of course their adds showed up – although in the sponsored field, not the natural search field.

Previously, companies upset about having their competitors adds show up have been able to argue that:

– advertising is part of trade
– the mark belongs to the company complaining
– both companies use online advertising, which could lead to confusion on the part of the customer

Now the 9th Circuit Court is asking keyword abuse complainants to show:

  • what is the strength of the trade mark (well known?)
  • is there any evidence of actual confusion by customers?
  • what type of goods are being advertised and what degree of care is the purchaser going to exercise before hitting the "buy" button; and
  • looking at results page, the appearance of the ads and surrounding text on the page, is the customer likely to be confused?

The last point addresses the fact that Google users are pretty familiar with the results page format and can tell the difference between natural results, paid advertising and premium advertising and often trust the natural results first.

The result was that the Court removed an injunction stopping Advanced from using the "activebatch" keyword in its advertising.

Prior to this decision the European Court had found Google not liable for the purchase of trademarks as keywords for advertising, although it did comment that the advertiser itself may be in breach. In Australia trademark protection has not been the chosen approach. Instead, the Australian courts have looked at whether or not the behaviour can be considered to be misleading and deceptive from the perspective of the customer – more in line with the 9th Circuit Court's new approach.

It will be interesting to see what other international decisions take note of this approach.

What does this mean for you?

  • Using other company's trademarks as keywords is something you do at your own risk
  • You can now test the arguement that customers are not stupid and are likely to know the difference between what is a paid advertisement and what is a natural search result
  • If the courts think you're use of another company's trademark is likely to confuse customers, you're more likely to be in trouble than not
  • As long as the domain name dispute resolution bodies pay attention to court decisions, it may be possible to register new domain names including the trademarks of other companies

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2 Responses to “Keywords – Yours, or Your Competitors?”

  1. mango April 29, 2011 at 8:56 am #

    As a web developer, I found your site to be educational. I also love the clean layout of your website. Keep up the good work

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