There has been a recent verdict on the question of whether a search engine infringes trade marks by offering similar words for sale as sponsored links. But is it the landmark judgment it is cracked up to be? Anna Montes investigates.
Who: The High Court
When: February 2008
Where: United Kingdom
Law stated as at: 31 March 2008
In what could indeed be the first case of its kind in the UK against a search engine operator regarding keywords and sponsored links, Yahoo! UK Limited ("Yahoo!") (together with its group company Overture Services Limited), found itself at the receiving end of a law suit issued by a Mr Victor Wilson.
Mr Wilson is the owner of a mobile catering business that supplies food at festival venues and which has traded under the name "Mr Spicy" since 1985. Mr Wilson registered "Mr Spicy" as a Community Trade Mark in respect of classes 29, 30 and 42 to cover food, sauces and the provision of food services.
Mr Wilson's discovery
One day Mr Wilson discovered that when he typed the words "Mr Spicy" into Yahoo!'s search engine facility, the sponsored links appearing with the search results included links for Sainsbury's and price comparison website 'PriceGrabber.co.uk'. These adverts did not contain a reference to the term "Mr Spicy" but feeling aggrieved, Mr Wilson took commenced his action against Yahoo! for what he believed was an unauthorised use of his branding in a way that amounted to an infringement of his trade mark rights.
The Community Trade Mark Regulation (40/94/EC) (the "Regulation") provides that a CTM proprietor can prevent unauthorised third parties from using, in the course of trade, any sign which is identical to the CTM in question (in relation to identical goods or services), or which is similar to the CTM (in respect of identical or similar goods or services) and where there exists a likelihood of confusion on the part of the public as a result of such similarity. The Regulation stipulates that "use" of a CTM includes affixing the sign in question to goods and offering such goods for sale, and use in an advertising context.
"Spicy" not "Mr Spicy" sponsored
When evidence relating to this case was presented to the court, it became clear that both Sainsbury's and PriceGrabber.co.uk had in fact sponsored the word "spicy" for search engine optimisation purposes, not the phrase "Mr Spicy". Any search against the term "Mr Spicy" would reveal sponsored links paid for by third parties who had registered the keyword "spicy" or any phrase that contained the word "spicy" due to the word-matching technologies utilised by search engines.
As Sainsbury's and PriceGrabber.co.uk had not purchased "Mr Spicy" as a keyword, Yahoo! requested summary judgement on the basis that Mr Wilson's trade mark had not been used by Yahoo! at any point, and even if there had been any "use" of this phrase, it would not in these circumstances amount to "use" in the trade mark infringement sense. Mr Justice Morgan was inclined to agree with these submissions.
Morgan J's robust verdict
Mr Justice Morgan dismissed Mr Wilson's claim and granted Yahoo! summary judgement on the basis that the trade mark was only used by those internet users who entered the phrase "Mr Spicy" into their web browsers, not by Yahoo! or anyone else in this case.
Furthermore, Yahoo!'s response to a "Mr Spicy" search request did not amount to "use" of the CTM belonging to Mr Wilson and, even if there was an argument to say that a search engine operator's response to the inclusion of a trade mark within a search engine browser was sufficient to constitute trade mark usage, then in this case, Yahoo! was responding to the use of the word "spicy", not the phrase "Mr Spicy" in its entirety.
When considering "use" in a trade mark infringement sense, Mr Justice Morgan referred in detail to the case between Arsenal FC and Matthew Reed. He was of the opinion that this case had similarities with the Arsenal case in which it was ruled that a trade mark proprietor cannot prohibit the use of a sign identical to their trade mark for identical goods, if the use in question cannot affect his own interests as proprietor of the mark having regard to its function as a guarantee of origin.
Why this matters:
This ruling will be music to the ears of search engine operators and advertisers who purchase keywords as a method of internet advertising. Mr Justice Morgan believed there could be no lawful objection to Yahoo! soliciting the use by third parties of a keyword in return for payment where a trade mark is attached to goods and services different to those protected by the trade mark registration concerned. Furthermore, as none of the adverts appearing as a result of inserting "Mr Spicy" into the search engine made any reference to Mr Wilson's business, it was held that the text of the ads could not have an adverse impact on Mr Wilson's trade mark rights.
Mr Justice Morgan did not, however, address the issue of whether the use of a mark in advertising amounts to an infringement of Article 9(2) of the Regulation. Neither did he provide any commentary as to whether:
(a) his decision would be different if plaintiff had been the owner of a very distinctive trade mark with far-reaching, international protection for instance rather than a trade mark proprietor such as Mr Wilson; or
(b) Sainsbury's and PriceGrabber.co.uk could be argued to be infringing Mr Wilson's trade mark rights were they to register "Mr Spicy" as a keyword rather than "spicy" as that was not the issue in dispute.
Advertisers therefore still need to exercise some caution when considering utilising the trade marks of their competitors in keyword advertising – this case does not provide advertisers with a totally risk-free green light but it is a start.
In this particular case Mr Wilson also represented himself, so query whether the outcome of the case could have been different if Mr Wilson's case had benefited from specialist legal input and Mr Justice Morgan had been presented with more detailed legal submissions and queries to provide responses to? Nevertheless, at the very least, we have some further guidance on the issue of keyword searches until the next case comes our way….