South Africa: A Clearvu On AdWords: An Update

Last Updated: 1 July 2016
Article by Gaelyn Scott

Most Read Contributor in South Africa, September 2016

"The degree of consumer care is becoming more heightened as the novelty of the Internet evaporates and online commerce becomes commonplace."

This quote, which comes from a United States ("US") decision, is quoted in the South African Supreme Court of Appeal's ("SCA's") judgment in the so-called "Clearvu case" – Cochrane Steel Products (Pty) Ltd v M-Systems Group (Pty) Ltd and Another (unreported case no. 227/2015, 27 May 2016).

The Clearvu case (which we covered in a previous ENSight) was South Africa's first reported case dealing with whether or not it is unlawful for a company to buy (bid on) the trade mark of a competitor as a keyword or search term, with a view to ensuring that when Internet users search that trade mark, or variations of it, they see the purchasing company's sponsored links or adverts.

Unlike most of the foreign judgments that have been handed down on this issue, the Clearvu case was based on passing-off rather than trade mark infringement. The reason for this was that Cochrane had not yet managed to obtain registration of its trade mark Clearvu, because M-Systems had opposed its application. The claim, therefore, was that, as the Clearvu trade mark was well-established, M-Systems was guilty of passing-off by buying Clearvu (or variations of it) as a keyword. The first court rejected the claim on the basis that there was unlikely to be any confusion.

The SCA considered a number of the foreign trade mark infringement judgments that have been handed down on the issue. The SCA paid particular attention to the United Kingdom decision of Cosmetic Warriors Ltd and another v Ltd and another [2014] EWHC 181 (Ch) (10 February 2014) (the "Lush case"), as well as the case of Interflora v Marks and Spencer plc [2009] EWHC 1095 (Ch) (22 May 2009) (the "Interflora case"), which involved Marks and Spencer's use of Interflora as a keyword in respect of its flower delivery service. The SCA said that these decisions emphasise the fact that consumers are familiar with sponsored adverts, that they expect to see the trade mark that they have searched for appear in the advert itself, and that if they do not see the trade mark, they're unlikely to be confused into thinking that there is any connection.

The SCA also referred to US and Canadian judgments in which the courts have made it clear that the nature of the goods and the type of consumer are highly relevant in determining likelihood of confusion.

It also referred to the recent New Zealand decision of Intercity Group (NZ) Ltd v Nakedbus (NZ) Ltd [2014] NZHC 124 (12 February 2014), in which the court found that consumers would not believe that Nakedbus was using the name of its rival, Intercity, as a trade mark.

With the foreign trade mark cases focusing on the likelihood of confusion, the SCA was able to apply them to passing-off. It reminded us that, in the leading South African decision of Capital Estate and General Agencies (Pty) Ltd & others v Holiday Inns Inc & others 1977 (2) SA 916 (A), the highest court said that passing-off requires reputation, as well as a "reasonable likelihood that members of the public may be confused into believing that the business of the one is, or is connected with, that of another". In applying this to AdWords, the court said: "The question is whether the advertisement itself gives rise to the likelihood of confusion and not whether the bidding by one competitor on the trade mark of another is itself unlawful."

So, would there be confusion? The SCA made the point that, although consumers searching "Clearvu" are confronted with advertisements for a multiplicity of suppliers, they are smart and resilient: "Consumers will assume, as all internet users do, that they will have to separate the wheat from the chaff in deciding which hyperlinks appearing as a result of their search should be clicked. That presumably will cause irritation and perhaps even annoyance but it does provide the consumer with alternatives, thereby fostering competition."

The SCA felt that there would not be any confusion. It made the point that the various adverts appear on different parts of the screen, and that they are also clearly distinguished from natural search results (those that are not paid for). It said that if an advert contains no reference to the trade mark owner, then consumers will assume that it's not linked to the trade mark owner. Even if the consumer does go on to the advertiser's website, the branding there will make it clear that there is no connection with the trade mark owner.

In South Africa, passing-off is regarded as a species of the wider field of unlawful competition. The SCA discussed unlawful competition in some detail and made its pro-competition position clear when it said that the starting point is that it is every person's "liberty" to trade without unlawful interference by others. It reminded us of these utterances from an earlier South African case: "Imitation is the lifeblood of competition ... the bare imitation of another's product, without more, is permitted." The SCA added: "Competition by a rival trader necessarily involves an interference with the exercise of this right in that it results, to some degree, in the diversion of such custom to the rival trader."

The SCA went on to say that, in order to decide whether or not the competition crosses the line of acceptability, one needs to look at public policy and the legal convictions of the community. If the result of the competition is that there is a likelihood of confusion, then the competition will be dishonest and unfair. This, however, was not the case in this matter.

In conclusion, two points will be of particular interest to trade mark experts. The first is that the SCA briefly referred to the concept of "initial interest confusion", something that it referred to in the earlier SCA decision of Orange Brand Services Ltd v Account Works Software (Pty) Ltd (unreported case no. 970/12, 22 November 2013). However, the SCA felt that the concept has no application in the case of AdWords, and it referred to certain US and Canadian cases as authority.

The second point is that the SCA briefly referred to a trade mark's advertising function – the theory is that advertising is a further function of a trade mark, the main function being to indicate origin. The SCA referred to the Interflora decision and said that the use of another's trade mark as a keyword does not affect the advertising function of the trade mark, even if the result is that the trade mark owner has to pay a higher price-per-click than the competitor to make sure that its advert appears first. 

There's a lot of law in this fairly short judgment.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.