Trade Mark Infringement
Does using a mark as a key word for banner advertising amount to infringement?
As most of us now use the internet to look for and purchase things it has become a significant way in which we become aware of, and see the use of, trade marks and logos identifying the origin of goods and services. Businesses are concerned to ensure that their websites appear as high up any search list on the likes of Google as possible, so that they can attract more customers or advertising revenue. The results of a search depend not only on the visible content of a website, but also on sponsored links based on keywords that trigger search results and the use of metatags embedded in the coding or ‘hypertext mark-up language’ (html) in which webpages are generated.
The benefits of attracting internet traffic to a website through metatags and sponsored links has led to some website owners creating metatags and paying for sponsored links using a competitor’s trade mark or logo. While some may view this as a legitimate commercial practice ensuring that consumers are aware of alternative sources for goods and services, others are concerned to prevent their competitors from using their trade marks to divert customers away from their website.
Types of Infringement
Under the Trade Marks Act 1994 (TMA), the owner of a registered trade mark is granted the exclusive use of the mark within the UK in connection with the goods or services for which it is registered. (A Community Trade Mark gives similar rights throughout the EU.) The registered owner has the right to sue any person for trade mark infringement where a sign is used without his consent provided that the owner can show there has been:
What amounts to "use" of a trade mark?
To constitue infringement there must be use of the trade mark in the course of trade. The European Court of Justice (ECJ) has recently issued the last of a number of judgments on use of trade marks on the internet in the case of Interflora v Marks & Spencer plc (Case C-323/09). These cases have clarified that use of a sign as a keyword to trigger the dislay of an advertisement is use in the course of trade in relation to the advertiser's goods. It has also been held that this is the case even if "the advertiser made no mention of the mark in the advertisement itself." (L'OréalSA v eBay International )
In an earlier decision on a reference from the French court, the ECJ had ruled that, although an advertiser using another’s trade mark as a keyword may constitute ‘use’ (and, potentially, infringe the rights of the trade mark owner), Google allowing its advertisers to use a keyword in this way in its paid referencing service “AdWords” does not itself constitute ‘use’.
Affecting the essential functions of a trade mark
The recent ECJ cases have focused on the fact that a trade mark owner is only able to prevent somebody else's "use" of a trade mark (even if it is an identical sign under Article 5(1)of the Directive (Section 10(1) TMA) if that use is liable to have an adverse effect on one of the essential functions of the trade mark.
The main function of a mark is to show the origin of any goods or services. So if an advertisement suggests that there is an economic link between a third party and the proprietor of the trade mark, the conclusion would be that there is an adverse effect on that mark’s function of indicating origin.
The ECJ in the Interflora v Marks & Spencer case confirmed that a trade mark owner is entitled to stop an advertiser from advertising using a keyword identical to the owner's trade mark and in connection with goods or services identical with those for which that mark is registered, if:
The ECJ decision in the L'Oréal SA case also recognised that trade mark owners had the right to protect other functions of the mark, such as that of guaranteeing the quality of that product or service or that of communication, investment or advertising. The investment function will be impaired where a third party substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty. However, these functions are unlikely to be interfered with simply by a competitor using the mark to attract customers away from the trade mark owner and are of more relevance where the mark is used in relation to replica or imitation goods.
The recent ECJ decisions have not dealt directly with metatags, but a decision by the Court of Appeal in 2004 (Reed Executive plc and another v Reed Business Information and others  EWCA Civ 159) held that the fact that a site appeared in search results did not in itself suggest a connection with the owner of the trade mark. The Court of Appeal expressed the view that the public are used to a random selection of sites being displayed on a search and do not necessarily assume there is a connection between the search terms and the sites. This is consistent with the ECJ decisions on keywords requiring there to be confusion over the origin of the advertisement affecting on the function mark for there to be infringement.
The ruling of the ECJ in the Interflora case has confirmed the position across Europe that using a trade mark for a sponsored link is “use” of that mark and confirmed how the courts should determine whether that use is infringement. However, until there are some decisions by national courts on what does and does not enable an internet user to ascertain whether a sponsored link is connected to the trade mark owner, we do not know where the boundary lies between what sponsored links will be held to be an infringement and and those that will not. This is reflected in the fact that both Interflora and Marks & Spencer welcomed the ECJ's decision on their case as being in their favour.
If you are thinking of using a competitor's trade mark as a keyword for sponsored links you need to be aware of the potential for infringement if you do not make it clear that there is no economic link with the trade mark owner or if the sponsored link is likely to confuse interent users. It is no longer safe to assume there can no infringement if the sponsored link makes no reference to the mark.
As a trade mark owner it is not enough simply to show that somebody is using your mark as a keyword. Even where it is an identical mark you need to show that there is confusion that has an adverse effect on your mark to take action against the person using the mark. You also cannot take any action against search engine providers unless they had an active role in the use of the mark.
If you would like further advice about any of the issues considered above please contact Paul Northwood on 01869 331753 or email him at email@example.com
This article is not intended to be, and should not be taken as being, legal advice. The law often changes and it varies from jurisdiction to jurisdiction; the information in this article is generic in nature and specific legal advice should be taken before acting on any of it.