Australia: Google’s Trade Mark Policy Update

Google AdWords, the auction-based program where advertisers bid on search terms to place text ads alongside search results, has been the subject of controversy and litigation around the world. In response, Google, in an attempt to maintain its viable business model and to assist trade mark owners in protecting their registered rights from misuse by competitors, has introduced a new trade mark policy, which came into effect on 4 June 2009. This will offer varying degrees of assistance to trade mark owners according to the country in which the trade mark is registered.

Before we get into Google's willingness or unwillingness to assist trade mark owners as the case may be, we need to define two terms. These are 'keywords' and 'ad text'. Most of us have used Google at some stage, when we enter our search term (keyword) and press the search function a number of sponsored links appear with a description ('ad text'). Advertisers, in addition to describing their ads, are permitted, through an auction process, to purchase keywords that will result in their sponsored link appearing at the top of the page when that keyword is entered by a user.

The auction process allows for a business to purchase keywords that are trade marks of its rivals. Imagine if Jet Star, for example, out bids Virgin Blue for the keyword 'Virgin'. Each time a consumer conducts a search using the keyword 'Virgin', Google's search engine would display Jet Star's sponsored link at the top of the page before the result for the Virgin Blue website, Virgin Blue, arguably, would find this unacceptable. The issue is whether it is illegal.

In some cases the practice may be beneficial to the trade mark owner, for example, if an Optus mobile phone site sells Apple's iPhone, Apple may likely decide to allow the use of the trade mark by Optus as it will inform consumers where to purchase the good at Optus' expense. However, the surreptitious behaviour of a competitor in purchasing a registered trade mark without the authorisation of the owner certainly creates some interesting trade mark issues.

In an attempt to resolve these issues, Google's new trade mark policy is divided into 2 groups, one for trade mark owners in the US, UK, Ireland and Canada and the other for trade mark owners outside the US, UK, Ireland and Canada. The second group includes Australia. For trade marks registered in the US, UK, Ireland and Canada, Google is only willing to investigate and possibly remove registered trade marks that are used by a third party that appear in the third party's 'ad text' not its 'keywords'.

On the other hand, Google is prepared to extend its powers to investigate and remove registered trade marks used by a third party in both its 'ad text' and 'keywords' in countries outside the US, UK, Ireland and Canada. Australian trade mark owners whose competitors purchase their trade mark as a keyword or use it in the ad text, can lodge a compliant with Google who will investigate the trade mark and its use before making a determination to remove the trade mark as 'ad text' or 'keyword'. Failing that, trade mark owners will always have the right to enforce their rights against Google (or any other search engine) and the competitor in court.

Lawsuits have been filed in the US, Germany, France and Israel against Google over whether it should be allowed to sell keywords comprising a company's trade mark to its competitors. Trade mark owners have argued that Google is taking advantage of and trading upon and receiving the benefits of goodwill and reputation associated with the trade mark. Google has argued that it is not using the trade mark in trade and commerce, that such use is not likely to lead to consumer confusion and that it should not be expected to monitor keywords used by their customers to determine trade mark infringement as this would lead to excessive costs.

There have been no cases in Australia alleging trade mark infringement against Google regarding its sale of keywords. However, in 2007, the Australian Consumer Competition Commission (ACCC) commenced proceedings against Google alleging breaches of sections 52 & 53(d) of the Trade Practices Act 1974 for misleading or deceptive conduct and misrepresenting that a corporation has sponsorship, approval or affiliation that it does not have. The ACCC claims that in addition to not adequately distinguishing "sponsored links" from "organic" search results", Google allowed a business to display the trade mark of a competitor in its ad text.

Overall, Google's trade mark policy has had a mixed reaction from trade mark owners. Trade mark owners in countries other than the US, UK, Ireland and Canada are happy to see that Google's is attempting to assist owners in enforcing their rights without the need to commence court proceedings. However, those trade mark owners in jurisdictions where keywords are left off the menu are not so welcoming of Google's new policy. A trade mark's value to a business can never be underestimated, and if it is discovered that there has been an unauthorised use of the trade mark, no matter how covert, it should be brought to the attention of the unauthorised user that is the sole right of the trade mark owner to determine how, when and where the mark is to be used.

Swaab was recently named a 2009 Winner in the ALB Employer of Choice awards, and was winner 'Best Law Firm in Australia (Revenue < $20m)' and 'Attribute Award for Exceptional Service (Australia Wide)' in the 2008 BRW- Client Choice Awards.

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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