Most Read Contributor in South Africa, December 2016
A recent Australian decision on keyword usage of a registered
trade mark is in line with decisions in many other countries,
including South Africa.
The facts in the case of Veda Advantage Limited v Malouf
Group Enterprises (Pty) Ltd (2016) FCA 255 were
straightforward. Veda is a company that compiles credit reports and
has trade mark registrations for the trade mark Veda in class 36
for financial services. Malouf is a company that helps people
remove their negative credit ratings. In the course of its
business, Malouf used a number of keywords (think Google AdWords)
that incorporated the trade mark Veda. These keywords located
sponsored links (advertisements) that also incorporated the trade
mark Veda in their headings.
So, had the trade mark registrations for Veda been infringed?
The court started off by deciding whether or not Malouf's use
of Veda was "trade mark use". The court defined trade
mark use as use that takes place to indicate a connection in the
course of trade between the goods and the company that applies the
trade mark. To put it differently, the trade mark must be used as a
badge of origin.
The court went on to hold that Malouf's use of the name Veda
in the various keywords was not trade mark use. It based this
finding on the fact that keyword use is invisible use; in other
words, use that is not apparent to the consumer. In the process,
the court differed from an earlier Australian decision known as the
Harbour Lights case, in which the court held that metatag use is
trade mark use. So, according to the court in the Veda case,
Malouf's use of the trade mark Veda in keywords did not
infringe the trade mark registrations for Veda.
But what about the usage of the trade mark Veda in sponsored
links (advertisements)? The court felt that, here, the situation
was not quite as clear. The trade mark Veda was used in sponsored
links in various forms, such as "Clean your Veda file".
The judge accepted that this was descriptive use; in other words,
use that described Malouf's business. This usage therefore did
not infringe the trade mark registrations.
Other forms of sponsored link usage such as "The Veda
Report Centre" were, however, different. According to the
judge, use of this nature was trade mark use; that is, use
suggesting a connection in the course of trade with Veda. So, in
this instance, there was trade mark infringement.
The Veda decision is in line with various cases in Europe, such
as Google v Louis Vuitton, Interflora v Marks &
Spencer and Amazon v Lush. The approach in these
cases has been that keyword usage of another company's
registered trade mark is lawful if there's no confusion as to
the origin of the goods. The thinking here is essentially this:
most people know how the internet works; they understand that a
search for one brand will also bring up results relating to
competitor brands, and this won't confuse them. The Veda
decision is also in line with the Naked Bus case in New Zealand, in
which the court again highlighted the fact that keyword usage is
The Veda decision is also in line with the one South African
decision on the matter of keyword usage, Cochrane Steel
Products (Pty) Ltd v M-Systems Group (Pty) Ltd and Another 2014 BIP
248 (GJ) Ltd (which we covered in a previous
ENSight). In this case, Cochrane, the owner of the trade mark
ClearVu for fencing, sued a competitor called M-Systems for
acquiring Google AdWords like "clearvu". These AdWords
directed people searching those terms to advertising material for
M-Systems rather than for Cochrane. The case was based on passing
off rather than trade mark infringement because the trade mark
ClearVu, although well used and well known, had not yet been
registered (M-Systems had in fact opposed the application).
The judge in the Cochrane case said this: "AdWords are a
familiar feature of the internet and consumers are used to
distinguishing them from natural search results." The judge
went on to find that there would be no confusion, saying that
"a consumer who searches for ClearVu is confronted with a
multiplicity of suppliers ... It is highly unlikely that the
reasonably observant consumer would be confused and deceived into
thinking they were all the advertisements of the
It's good to know that we're basically all on the same
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