Can you use a competitor’s trademark in Google AdWords?

You type the name of your trademark into Google. As expected, your website displays as a result. But a link to your competitor’s website is displayed above it as a ‘sponsored’ link. They have used your trademark in Google Adwords as a keyword! Is this legal? Recently, the Federal Court held that use of Adwords keywords usually does not constitute trademark infringement. In some circumstances, the use of someone else’s trademark in the text of the Google AdWords advertisement can even be legal. How is this so?

The case: Veda Advantage Limited v Malouf Group Enterprises

The plaintiff, VEDA Advantage, is the largest provider of credit ratings in Australia. VEDA Advantage owns and markets a range of branded credit rating services. At the time of the litigation, they were the registered proprietor of trademarks for the words ‘VEDA’, ‘VEDA ADVANTAGE’, ‘VEDA CHECK’ AND ‘VEDASCORE.’ VEDA Advantage uses a ‘VedaScore’ to summarise the information in a person’s credit file. The defendant, Malouf Group, provides ‘credit repair’ services to clients. Their business involves challenging companies such as VEDA Advantage to justify credit rating scores and rectify errors in credit reports.

Malouf Group used the Google Adwords service to display a sponsored link on Google search pages when users searched for certain keywords. When certain phrases which include a chosen keyword are entered into Google by a user, the advertiser’s ‘sponsored links’ are displayed at the top of the search results as ‘sponsored’ links. These keywords are invisible to users. Malouf Group chose approximately 86 keywords. Some of the keywords used by Malouf Group included VEDA Advantage’s trademarks. The court held that this did not constitute trademark infringement, as the words were not used ‘as a trademark’ in this context. Importantly, the keywords were not visible to users, and were not used to indicate a connection to VEDA Advantage. The court stated that:

[the defendant] was not using the keywords as a sign to distinguish its services from the services of others. Rather, it has used them to identify internet users who may have an interest in using its services.

The word ‘VEDA’ was also used in headings in the text of the sponsored links which were displayed to users (e.g. ‘Clean your Veda File’, ‘Repair Your Veda File’, ‘Fix Your Veda History’). The court held that most of these headings were descriptive of the services offered. They did not infringe the trademark as they were not used ‘as a trademark.’ A sign or word may not be ‘used as a trademark’ if the use:

  • explains the nature or quality of the goods or services;
  • describes the ingredients of the goods;
  • shows how the goods or services work;
  • decorates the goods;
  • identifies the ultimate destination of the goods; or
  • links together scenes in a TV advertisement for the goods or services.

However, there were legal problems with some of the headings such as ‘The Veda Report Centre’ and ‘The Veda-Report Centre.’ The court found that in these instances, the word ‘Veda’ was not used descriptively, but to falsely represent that the defendant’s business was connected with Veda. It was likely that some users would click on links with these headings, expecting to link to a website linked with Veda. For these reasons, the court held that this second category of headings infringed Veda Advantage’s trademarks, and constituted misleading and deceptive conduct under the Australian Consumer Law.

What can you do if a competitor uses your trademark in Google AdWords advertising?

Usually, you can’t do much if someone uses your trademark as a keyword. Google’s current AdWords policy states that they will not investigate or restrict the use of third party trademarks in keywords. Further, they will allow the use of a competitor’s trade mark in an advertisement’s display URL.

Despite these restrictions, you should make a complaint to Google if a third party has used your trademark in the text of a Google advertisement. Google will investigate and may restrict the use of your trademark in the text of advertisements. However, Google will allow the use of others’ trademarks in the text of Google advertisements which are placed by resellers, sellers of replacement/compatible products, and informational websites.

If a competitor uses your trademark in the text of an advertisement, you should seek legal advice. You could possibly have remedies under intellectual property law and the Australian Consumer Law.

How can you avoid litigation when using a competitor’s trademark as a Google AdWords keyword?

When using a competitor’s trade mark in the text of a Google AdWords campaign, you must ensure that such use is descriptive rather than creating the representation that your business is linked with that of the trademark owner. Merely using a competitor’s trademark as a Google AdWords keyword will not be enough to infringe a trademark.

What if you market your goods/services internationally using Google AdWords?

Courts in many foreign jurisdictions have considered the legal issues arising from Google AdWords. The outcomes have been different in each jurisdiction. If you are marketing your goods or services internationally using Google AdWords, you should seek legal advice to ensure that you are complying with the laws of each jurisdiction.

If you need professional advice about potential trademark infringement, please don’t hesitate to call Butlers Business and Law on (02)49 7002 or fill an enquiry form. We assist businesses based in Newcastle and Sydney to protect and defend their intellectual property rights.