Trademarks as keywords in online searches

By Rahul Chaudhry, Lall Lahiri & Salhotra

Search engines, the websites that allow navigation of the internet, are vital for any search for information on the worldwide web. They depend almost entirely on advertising revenue. Unsurprisingly, new forms of advertising are constantly being devised to suit the needs of both search engine companies and advertisers. One example is “keyword advertising”, now one of the most important sources of revenue for popular search engines like Yahoo and Google: the advertiser “buys” a word, which when searched for will return the advertiser’s website link placed prominently in the search results.

Rahul Chaudhry Partner Lall Lahiri & Salhotra
Rahul Chaudhry
Lall Lahiri & Salhotra

Controversy arises when keywords that are also trademarks are purchased by competitors in a bid to divert search engine traffic to their websites. This often occurs; one example is in the case of travel information, where a search on the name of a hotel chain returns not only the hotel’s website link but other links, including advertisements by competitors and providers of collateral services such as airline bookings.

Several issues apply to the question of whether the use of a trademark by a competitor as a keyword trigger to drive traffic to its website constitutes an infringement of the trademark owner’s rights. If the competitor uses the trademark in its domain name, link or website, this would clearly constitute infringement; but in keyword advertising, the use of the trademark is “invisible”. Also, the use of keyword advertising does not necessarily affect search results significantly: the search engine will still display the most relevant results in order of their relevance, and sponsored links are usually featured separately.

There have been conflicting decisions in various jurisdictions. In the UK, courts have deemed such use as not amounting to infringement; in Reed Executive v Reed Business Information Ltd in 2004, a dispute between a trademark owner and an advertiser, the court of appeal reversed the decision of the original court, which had found that infringement occurred. On the crucial question – of whether the actions of the defendant amount to use – the court of appeal found that that, “The invisible or “computer” use of Reed was not an infringement because people knew, indeed expected, that when they did a search, a lot of irrelevant results would appear”.

Similarly, in the Dutch case of VNU Business Publications BV v The Monster Board BV in 2000, the Court of Appeal in the Hague overturned the finding of the court of first instance, finding that the use of the word “Intermediar” as an advertising keyword did not to amount to infringement (and saying that the word had been used in its generic sense).

These examples show that the question of whether such use amounts to infringement rests on the definition of “use” as interpreted by the court. LJ Jacob of the court of appeal in the matter of Reed Executive said in this regard: “Such use cannot even be regarded as use in the course of trade. The computers are merely reading patterns of digits that are not being read by the human eye. There is no meaning being conveyed, and no use of any sign.”

However, French courts have taken a different view. In Viaticum v Google France in 2004, the sale of the plaintiff’s trademarks by Google to its competitors for use as keywords was found to amount to infringement. Google has appealed against the result, which opened a Pandora’s box: numerous trademark owners subsequently brought actions against Google and other search engines for similar causes, several of them (including Louis Vuitton) successful.

In these cases it has been held that the use of a trademark amounts to infringement, no matter if only as a search keyword. Such use may suggest some form of association between the trademark and the competitor’s website.

A 2009 case, Interflora v Marks and Spencer, has been referred to the European Court of Justice (ECJ) along with the above-mentioned Dutch and French cases – among a total of seven cases so referred. It is expected that the ECJ’s ruling will be beneficial in streamlining the issue, at least in Europe. There is a lack of any viable authority on the subject in the US, although the US has largely followed the Dutch and English view in being relatively lenient towards such use. For example, in 2004 a US court held that the use of the trademark “Geico” by Google as an advertising keyword did not amount to infringement.

If the use of trademarks as advertising keywords is disallowed by courts, it could lead to a collapse of the information retrieval system over the internet, as it would be very difficult to search for a document without using co-related trademarks as keywords. Google’s policy, which states that trademarks can be used as advertising keywords provided the use is not visible in the link or on the webpage, appears to be a sound middle path that trademark owners, search engines and advertisers may all adopt.

Rahul Chaudhry was called to the bar in September 2002. He joined Lall Lahiri & Salhotra in January 2004 and became a partner just four years later. Along with the firm’s founding partners, Anuradha Salhotra and Amar Raj Lall, Chaudhry is regarded as one of the most prominent faces of IP management in India.


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