The High Court has issued a judgment which may influence how you use Google Adwords in New Zealand.

The judgment relates to a dispute between Intercity and NakedBus regarding NakedBus's use of the trade mark INTERCITY (and variants) as Google Adword keywords, within the advertisements generated and on NakedBus's website.

Details on this case were included in our note last year – which can be seen here.

What this decision means for you

Based on this decision, while you should still consider the overall context of your advertising, use of a competitor's trade mark as a keyword is acceptable in New Zealand provided there is not further use in the advertisement or on the website linked through to.

Summary of findings and reasoning

The court has found that:

  • NakedBus's use of INTERCITY and INTER CITY as keywords to generate advertisements did not infringe Intercity's trade mark registrations for INTERCITY, amount to passing off, or breach the Fair Trading Act;
  • NakedBus's use of INTERCITY and/or INTER CITY as a keyword in combination with use of those terms in the text of the advertisements (and on its website) infringed Intercity's INTERCITY trade mark registrations, amounted to passing off and breached the Fair Trading Act.

In reaching his decision the Judge found that while NakedBus had used the INTERCITY trade mark in trade (a necessary element for trade mark infringement under section 89(1) of the Trade Marks Act), that use was not in such a manner as to render the use of the sign as "likely to be taken as being used as a trade mark" (a further necessary element at section 89(2) of the Act). Key to that decision was his acceptance of the argument that if the "use" could not be seen by the consumer it could not be "taken as" anything, let alone "taken as being used as a trade mark". In the absence of evidence to the contrary, the Judge was unwilling to assume that the consumer would know or understand the use of keywords.

The Judge did leave the door open for cases where silence in the advertisement could result in liability as was found in the Interflora case discussed in our earlier note.

On the basis of media statements it appears unlikely that Intercity will appeal the keyword finding.

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.