Australia: Yahoo! Successfully Disposes Of Trade Mark Infringement In Relation To Sponsored Links

Are you a trade mark owner? Have you done a search on Google or Yahoo recently to see what results are returned when your trade mark is entered? Are there a number of sponsored sites, possibly competitors, whose results are returned? The use of trade marks as sponsored keywords by search engine operators has become a great concern to trade mark owners. To date the courts have sided with search engine operators.

On 20 February 2008 the English High Court gave judgment in the favour of Yahoo! UK Ltd and its sister company Overture Services Ltd (Yahoo!), in relation to a claim brought by a Mr Wilson, for infringement of his Community Trade Mark by Yahoo! in relation to sponsored links.


Mr Wilson is the owner of the Community Trade Mark MR SPICY which is registered for food, sauces, spices and the provision of food and drink.

Mr Wilson has carried on a business as a mobile food caterer, in the name or style of "Mr Spicy" since 1985. The business includes the sale of Afro-Caribbean and Halal South Asian snacks under the name MR SPICY from a trailer at carnivals and festivals in London.

In late 2006, it came to Mr Wilson's attention that when a search was conducted for the terms "Mr Spicy" using the Yahoo! UK and Ireland search engine, sponsored links to the websites of Sainsbury's Supermarket Ltd (www. and Ltd ( where provided. Mr Wilson claimed that this infringed his trade mark.

When Mr Wilson typed the words "Mr Spicy" into Yahoo!'s search engine on 14 December 2006, 515 results were produced. These results are referred to by Yahoo! as "natural results". The first 10 natural results were numbered 1 to 10 and appeared on the first page. Above these numbered results the page showed two items under the heading "Sponsor Results". The first of the sponsored results referred to Sainsbury's and the second referred to Pricegrabber.

Application for summary judgment or striking out of claim by Yahoo!

Yahoo! applied for summary judgment against Mr Wilson on the basis that Yahoo! had not used Mr Wilson's trade mark and therefore had not infringed the trade mark, and that Mr Wilson had no real prospects of succeeding on his claim of infringement.

To support its application, Yahoo! submitted evidence that Sainsbury's or Pricegrabber (or any third party for that matter) had never selected the words "Mr Spicy" as a sponsored keyword. Yahoo! explained that both Sainsbury's and Pricegrabber had bid on the keyword "spicy", and as a result of Yahoo!'s search engine set up, its sponsored sites would be displayed upon a search for the terms "Mr Spicy". By way of example, Yahoo! explained that Sainsbury's had selected "spicy", "spicy parsnip soup", "spicy soup", "cooking spicy" and other phrases that included the word "spicy" as keywords. Mr Wilson was of the belief that both Sainsbury's and Pricegrabber has sponsored the words "Mr Spicy".

Yahoo! also pleaded, that if for some reason it was found to have used Mr Wilson's trade mark, then it did not use it in respect of the goods or services for which it is registered (Yahoo!'s use being for sponsored links over the Internet and not food and restaurant services). Yahoo! also pleaded that if the production of Sainsbury's and Pricegrabbers URL's was found to be use of the keywords in respect of the goods or services of the sponsors, then no use is being made of the sign "Mr Spicy".

Summary judgment entered and application struck out

In reaching his decision, Justice Morgan stated that the function of a trade mark is to "guarantee the identity of origin of the marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin".

However, Justice Morgan went on to say that this right is limited, and may not be used to "prohibit the use of a sign identical to the trade mark for goods identical to those for which the mark is registered if that use cannot affect his own interests as proprietor of the mark having regard to its functions."

In dismissing Mr Wilson's claim the court held:

  • The trade mark was only being used by the person who entered the search terms "Mr Spicy" into the browser and not Yahoo! or the sponsors.
  • Sainsbury's and had only sponsored the word "spicy" and not "Mr Spicy". Therefore there was no use of the term "Mr Spicy".
  • Even if Yahoo!'s conduct amounted to use of the words " "Mr Spicy", it was not use as a trade mark, as it did not indicate the origin of the goods. Rather it was use of the English word "spicy".

In relation to this last point, Justice Morgan also stated that "Mr Wilson is not able to prohibit the use of the words "Mr Spicy" even when they are being applied to goods identical to those for which the mark is registered if that use cannot affect his own interest as proprietor of the mark having regard to its functions."


There have been several similar actions against Google in relation to its keyword triggered ads. In early 2004, Google removed its policy that it would not sell keywords that were trade mark names. Until recently the trade mark owners that have sued Google for trade mark infringement through the sale of its trade marks as keywords have been relatively obscure brands such as Check-n-Go, Rescucom and JTH Tax. Cases brought by more well known brands, but by no means famous brands, American Blinds and GEICO were settled before they reached trial in the US.

In August 2007 American Airlines sued Google for trade mark infringement in relation to the sale of its trade mark AMERICAN AIRLINES as keywords. American Airlines is by far the biggest brand to bring such an action, and has the financial resources to battle Google out in the courts. Google will vigorously defend the claim as the lawsuit attacks the very core of Google's business. The outcome of that case will be closely watched by trade mark owners and search engine operators.

Although this decision will be welcomed by search engines and other online advertising providers, it is likely to have limited application as Yahoo! was found to not actually be using the trade mark. Further, the sponsored links were not a competitor of the trade mark owner, therefore there was no harm being done to Mr Wilson.

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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