Google changes its policy on keyword advertising

Google has announced a change to its policy on the use of trade marks as keywords.

Trade mark owners could previously prevent another party using its trade mark as a keyword to trigger search engine adverts, effectively giving trade mark owners a monopoly on that advertising space.

The change brings the policy in line with that already adopted in the US and Canada but puts it at odds with the policy in the rest of Europe. It has a direct impact on trade mark owners who may now see their advertising costs increase as they are forced to outbid rival companies in an attempt to protect their trade marks.

The recent change appears to have been made without consultation with those most affected and has sparked controversy amongst brand owners who consider the change to be a serious threat to their trade marks. Whilst there has been much debate and talk of legal action between key brand owners, for now it seems that they are sitting back and watching but it is likely to be simply a question of time before Google sees itself in the firing line.

The change has come not long after the first UK ruling on whether the use of trade marks in sponsored search results constitutes trade mark infringement. In that case, the High Court dismissed the claim of trade mark infringement against Yahoo! and its sister company Overture Services and granted summary judgment.

The claim was brought by Mr Wilson, the owner of the community trade mark “MR SPICY” registered in relation to food and drink. He claimed that when the term “MR SPICY” was typed into Yahoo’s search engine, sponsored links to third parties’ websites appeared and that this constituted an infringement of his trade mark.

Mr Justice Morgan, in granting summary judgment and striking out the claim, held as follows:

The trade mark was used only by the internet user who entered the term into the search engine and not by the defendants or by the advertisers. Without use, there could be no trade mark infringement. The judge held that this would have been the case even if the advertisers had sponsored the term “MR SPICY”.
The advertisers had sponsored the word “spicy” and not “MR SPICY”. Therefore, even if there was “use” by the defendants it was use of the English dictionary word “spicy” and not “MR SPICY”.
Even if the defendants had directly used “MR SPICY” this still would not have constituted use “as a trade mark” following the decision in Arsenal Football Club plc v Reed. There was nothing in the sponsored search results that affected Mr Wilson’s interests as proprietor of the trade mark. For example, there was no claim that the products of the advertiser come from Mr Wilson.

It is worth noting that whilst the MR SPICY case appears to bring some clarification on the position of the UK courts regarding the use of trade marks as keywords, it was a summary judgment only and therefore did not deal with the issue of use of trade marks within the advertisements themselves. In addition, the advertisers did not sponsor a keyword identical to the registered trade mark “MR SPICY” but instead sponsored the highly descriptive word “spicy”.

In the light of the above and in view of the uproar amongst brand owners, Google may have been rather quick off the mark to change its policy and we now await the first test case to see whether Google comes to regret its decision.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the
accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

Back to news