Intellectual Property Disputes

Use of Competitors Trademarks with ad words to secure business. 

The use of ad Words is becoming a very useful tool in securing business for your company. As is the use of Metatags, this is the use of relevant words to ensure that search engines find your article or section of website moving it higher up the search engine rankings as a consequence.

An interesting situation has arisen recently. Owners have used 3rd Party trademarks in their Metatags to secure business to their site. The European Court of Justice (ECJ) has provided decisions on such matters. The general rule is that businesses are permitted to use the brand of a competitor as adword to generate searches for their own products or services.

The ECJ considers that such an activity would normally be considered to be fair competition as it alerted searchers to alternative providers of goods and services. Where however there could be a problem with the use of a 3rd Party’s brand could be if the advertisement was likely to mislead a customer or consumer as to the origin of goods advertised. Therefore if there was any confusion as to whether or not the advertisement was linked with the brand owner then there may well be a case for an infringement.

Therefore at the moment there is going to be rare circumstances when a brand owner can prevent the use of his own trademark as ad words by competitors.

The ECJ in the case of M&S v Interflora stated a number of grounds in which there maybe a situation in which the proprietor would be entitled to prevent the use of the trademark as an adword, if it has an adverse affect on that function, if it interferes with proprietors use of its trademark to acquire or to preserve a reputation of its own.

If a trade marker already enjoys a reputation called an investment function and is adversely affected if the use affects the reputation and there by jeopardises maintenance.

Businesses then have to be very careful, despite the decision in considering whether or not the use of their actions could dilute a trademarks reputation and/or constitute free riding.


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