An important facet of marketing for many businesses is the
ability to attract online consumers by directing as many of them as
possible to their websites. While Google and other popular search
engines have ways of "ranking" websites for specific
search terms, businesses can promote their way up the list by
purchasing "AdWords" (for Google) which will elevate the
status of their website to "sponsored links" when search
terms using those AdWords are used.
This creates an interesting problem regarding the use of
competitors' brands and product names and how far businesses
can go to attract custom away from competitors to their own
The Court has held that purchase of an AdWord incorporating a
competitor's trade mark can be a trade mark infringement,
answering the question of whether the mere purchase of an AdWord
(which is not actually used on the purchaser's website)
constitutes "use" of that mark for the purpose of trade
Mantra v Tailly
The Federal Court held that use by Tailly of Mantra's
registered trade marks in domain names registered by Tailly, and at
the websites hosted at those domain names, to advertise services
closely related to those in which Mantra's trade marks were
registered, constituted trade mark infringement. The Federal Court
ordered that Tailly be restrained from using Mantra's
registered trade marks as a "search engine keyword".
Kennards Hire v Caruso Nominees & Ors
In the recent case of Kennards Hire v Caruso Nominees and
Others, the Federal Court held that, by purchasing Google
AdWords for the words "Kennards Hire" and
"Kennards", Caruso Nominees and its sole director David
Caruso had infringed Kennards Hire's trade marks. The Court
held so despite the fact that Caruso Nominees did not use Kennards
Hire's registered trade marks on the website corresponding to
the sponsored links in question, at which it advertised its own
equipment hire services.
The Court also found that Caruso Nominees had breached the
Trade Practices Act by misleading consumers who conducted
searches for the AdWords and who clicked on the sponsored link to
the respondents' website or visited the physical premises of
the respondents' business into believing that the website or
premises were owned by or affiliated with Kennards Hire. The
Federal Court also held that by engaging in this conduct, Caruso
Nominees had also made false representations in contravention of
the Trade Practices Act.
The Federal Court permanently restrained the respondents from
purchasing or using Kennards Hire's registered trade marks as
AdWords to advertise their business or website.
ACCC v Trading Post Australia, Google Inc & Ors
Google's liability for allowing traders to purchase AdWords
that comprise their competitors' registered trade marks is
under present consideration by the Federal Court in a proceeding
commenced in 2007 by the ACCC against the Trading Post Australia,
Google Inc and Others.
While the Trading Post Australia accepted that it had engaged in
misleading and deceptive conduct by purchasing AdWords for the
names of car dealerships against whom it competes in the automotive
sales industry, the case has continued against Google Inc and
Others with the Federal Court to shortly hand down its eagerly
While this case does not concern whether the conduct alleged
amounts to trade mark infringement, it will give traders a good
idea about whether Google has any liability for allowing
competitors to purchase AdWords that infringe of another traders
registered and un-registered intellectual property rights.
The message for all businesses remains the same:
register trade marks to protect your business and product
purchase AdWords for key words relevant to your business to
increase your visibility for online searches
be vigilant in monitoring the use of your trade marks by
competitors in domain names, on websites, and in AdWords.
As the above cases demonstrate, the Courts are now prepared to
take a firmer stance to stamp out behaviour of businesses trying to
trade off the goodwill of their competitors.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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