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With the development of digital advertising, infringements of trademark rights are no longer limited to visible forms of use such as product packaging, signs, catalogues, or website content. The possibility of using competitors’ trademarks as keywords, redirecting codes, search terms, or similar advertising parameters within the Google Ads system, which directs consumers’ access to certain brands and products/services in Google searches, gives rise to disputes lying at the intersection of trademark law and unfair competition law.
Summary of the Dispute
A recent first-instance court decision was brought on the grounds that the defendant, a competitor of the plaintiff operating in the insurance brokerage sector, had bid on the plaintiff’s registered trademarks as keywords through the Google Ads system, and that, consequently, when consumers searched for the plaintiff’s trademarks on the Google search engine, the defendant’s website appeared among the top results as a sponsored advertisement. Taking into account the expert reports in the case file, the records of the on-site inspection conducted at the defendant’s workplace, and, in particular, the consequences arising from the failure to submit to the Court certain evidence relevant to the resolution of the dispute, despite such evidence being within the defendant’s sphere of control, the Court upheld the claim of trademark infringement.
The first expert report obtained in the case established that, until the date on which the acts at issue occurred, the plaintiff’s website ranked highly in the search results; after the relevant date, the defendant’s website began to appear in the search results; and subsequently, the defendant’s website moved ahead of the plaintiff’s website.
This finding clearly demonstrates the impact of digital advertisements on a trademark. Even where the plaintiff’s website ranks first in the organic search results, because Google advertisements are displayed above the organic results, the defendant’s advertised and sponsored webpage becomes the first result encountered by the consumer. Thus, a consumer searching for the plaintiff’s trademark may be directed to the defendant’s website instead of the plaintiff’s website, and the plaintiff loses the traffic, clicks, visibility, and potential customers that it should naturally obtain through its own trademark and webpage. In this situation, the defendant draws visitor traffic and consumers to its own website by benefiting from the recognition, advertising power, and commercial reputation of the plaintiff’s trademark.
Trademark Infringement under the Industrial Property Code
Pursuant to Article 7/3(d) of Industrial Property Code No. 6769, provided that the person using the sign has no right or legitimate connection in relation to such use, the use of a sign identical or similar to the trademark on the internet in a manner creating a commercial effect, as a domain name, redirecting code, keyword, or in similar forms, is among the acts that the proprietor of the trademark may prohibit. Likewise, in the Google Ads system, the use of a trademark as a keyword, search term, redirecting element, or campaign-targeting parameter often results in the establishment of a commercial connection between the consumer’s search behavior and the advertiser’s website. The fact that a competing undertaking’s advertisement is displayed in a prominent position when the user searches for the trademark shows that the trademark is being used on the internet in a manner of creating a commercial effect.
In the case in question, although the defendant asserted that it had not directly used the plaintiff’s trademarks as keywords, the examinations conducted by the court-appointed experts showed that, when the plaintiff’s trademark was entered into the Google search engine, the defendant’s website address was displayed prominently as an advertised and sponsored result. Furthermore, although the experts explained that similar results could also be achieved in the Google Ads system, without directly defining a keyword, through different campaign types, close matching, or advertising models such as Performance Max , during the on-site inspection conducted by the experts at the defendant’s workplace pursuant to the Court’s instruction, the defendant refused, on the grounds of trade secrets, to share with the experts the campaign data, search terms, match types, negative keyword lists, and performance reports relating to the defendant’s advertising account.
The Significance of the Decision in Terms of the Burden of Proof
On the basis of the defendant’s above-mentioned failure to fulfil its obligation to produce evidence and its refusal to share technical data within its sphere of control, the Court, taking into account the approach set out in the decision of the 11th Civil Chamber of the Court of Cassation numbered 2019/3061 E. and 2020/1179 K., held that, given that the defendant’s website appeared as an advertisement when the plaintiff’s trademark was searched, the defendant was under an obligation to disclose which words it had purchased as keywords and to prove that it had not purchased the plaintiff’s registered trademarks. In this regard, the Court ruled that the defendant had failed to prove that it had not used the plaintiff’s trademarks as keywords. We consider the Court’s approach to be well founded. This is because Google Ads campaign data are technical data that are at the disposal of, and within the sphere of control of, the defendant as the holder of the advertising account. Where neither the plaintiff nor the Court can access such data, the plaintiff can demonstrate only the outward manifestation of these acts; namely, that when its trademark was searched on Google, the defendant’s advertisement appeared in a prominent position, the visibility of its own website in the search results decreased, and the defendant’s website moved ahead of it.
This approach of the Court is also consistent with Articles 219 and 220 of the Code of Civil Procedure. Under those provisions, where the court has ordered a party to submit documents in its possession that are decisive for resolving the dispute, that party is obliged to produce those documents. Pursuant to Article 220/3 of the Code of Civil Procedure, if a document ordered to be produced is not submitted without a justified excuse, the court may, depending on the circumstances, accept the other party’s statement as to the contents of the document. In current Google Ads systems, campaign types such as Performance Max may produce the same result without a keyword being directly defined. The principal significance of the decision is that, irrespective of the technical method used, it places on the advertiser the obligation to disclose the data showing which parameters caused the advertisement to be displayed.
The display of advertisements in the Google Ads system is not limited solely to keywords individually specified by the advertiser. Through methods such as broad match, close variants, automated targeting, Performance Max campaigns, and algorithmic ad serving, competing websites and advertisements may also be displayed in searches relating to particular trademarks. However, this technical reality should not be regarded as a factor that eliminates the advertiser’s responsibility. The advertiser is in a position to monitor the searches in which its campaigns are displayed, analyze search-term reports, and, where necessary, prevent matches with third-party trademarks by defining negative keywords. In particular, the taking of the necessary measures to prevent this result by a merchant who knows, or ought to know, that its own advertisement is displayed when a competitor’s trademark is searched may also be regarded as a requirement of the obligation to act as a prudent merchant under the Turkish Commercial Code (the “TCC”).
Assessment of the Court’s Dismissal of the Unfair Competition Claim
In view of the nature of such acts as explained above and their relationship with the obligations of a prudent merchant, it is considered that the acts in question may also constitute unfair competition under the TCC. As is known, pursuant to Article 54/2 of the TCC, deceptive conduct or conduct contrary to the principle of good faith that affects relations between competitors or between suppliers and customers is unfair and unlawful. Article 55/1(a)-4 of the TCC further regulates the taking of measures that cause confusion with another person’s goods, work products, activities, or business as a form of unfair competition. In addition, depending on the circumstances of the specific case, other forms of unfair competition may arise, such as violation of laws applicable to competition, unfair exploitation of commercial reputation, and diversion of customers.
Nevertheless, in the decision addressed in this article, the Court upheld the action in respect of trademark infringement, but dismissed the unfair competition claim on the ground that, in the recent decisions of the 11th Civil Chamber of the Court of Cassation, case law had developed to the effect that a claim of unfair competition could not be upheld together with an action for trademark infringement in respect of the same act.
It is considered that this approach results from a narrow interpretation of the principle of cumulative protection. Although, under the case law referred to, it cannot be accepted that every act constituting trademark infringement automatically and directly also constitutes unfair competition, the circumstances of the specific case are not limited solely to the infringement of the trademark right. In this dispute, the defendant directs consumers searching for the plaintiff’s trademark to its own website; effectively pushes down the visibility of the plaintiff in the organic search results; forces the plaintiff to incur advertising expenditure for its own trademark; benefits from the plaintiff’s commercial reputation and customer-attraction power; and causes confusion and a deceptively diverting effect among consumers. These acts affect not only the exclusive right of the trademark proprietor, but also the system of fair competition, consumer preferences, and market conduct. Accordingly, these acts should also be assessed as unfair competition.
In this discussion, the distinction between the “concurrence of claims” and “alternative claims” is particularly important. In the case of alternative claims, the right holder chooses only one of several remedies provided for the same facts. By contrast, in the case of concurrence or cumulation of claims, the same material facts may engage different spheres of protection on different legal grounds.
Trademark rights primarily protect the exclusive right of the trademark proprietor arising from registration. Unfair competition law, however, protects not only the individual right holder, but also a fair and undistorted competitive environment, the prevention of consumer deception, and the sound functioning of the market. Accordingly, the two spheres of protection do not always overlap entirely. For a special law to displace a general law, it must regulate the relevant legal field exhaustively and must also encompass the interests protected by the general law. However, the use of a competitor’s trademark through Google Ads, the resulting display of the website as an advertised and sponsored result above the trademark proprietor’s website, and the deceptive direction of consumers’ preferences concern not only the exclusive right to use the trademark, but also consumers’ search behavior, visibility in the advertising market, digital advertising costs, and the principle of good faith between competitors. For this reason, as the claim of unfair competition should have been examined separately and independently in the present case, we consider that it is not appropriate that a separate evaluation and justification has not been made in this regard.
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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