Hidden Benefit - Use of Trademarks as Google AdWords Allowed in Australia

There are many aspects of the Internet that most of its users are blissfully unaware of, including mountains of code and infrastructure that goes unseen. This is important, since seeing every aspect of a web browsing experience would cause information to be muddled and hard to digest, if not impossible to handle properly, so this 'invisible' network is necessary for the modern experience. Even so, the hidden layers of the Internet could be used for nefarious purposes, or possibly to try and take advantage of the goodwill of businesses or their trademarks, which puts it in a position of some scrutiny. While this blog has discussed metatags before (in a Canadian context), a similar question arose yet again, only this time all the way across the world in Australia.

The case of Veda Advantage Limited v Malouf Group Enterprises Pty Limited dealt with Veda, who are a big credit reporting organization in Australia. Among providing consumer credit reports, they also offer a credit repair service, expunging incorrect or otherwise erroneous listing on a consumer's credit report, therefore improving their credit score (although Veda do not do this proactively, only responding to customer's notices on this information). Malouf Group offer a similar service, although liaising with Veda on their customers behalf (in the process acquiring a copy of their report from them). Veda are also in possession of several registered trademarks over its name, or variants of it, including VEDA, VEDA ADVANTAGE and VEDACHECK. In advertising their business online, Malouf used the name Veda in 86 Google AdWords keywords, which were targeted at those wanting to contact Veda and would be directed to Malouf's services. They were subsequently sued by Veda for trademark infringement for their use of the name (or its variants) in their Google AdWords campaigns, potentially contravening section 120 of the Australia Trade Marks Act 1995.

Under the section above a trademark is infringed when a sign is "...use[d] as a trade mark... that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered". The key questions therefore are whether the name "Veda" was used 'as a trade mark' and whether this was done 'in relation to services' that the marks were registered for.

Judge Katzmann, handing down the Federal Court's judgment, first dealt with the issue of whether the name Veda was used as a trade mark by Malouf in their use of it in their Google AdWords advertising. The use would have to be "...as a “badge of origin” in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods". This has to be done objectively, including taking into account the nature and purpose of the use.

Google AdWords can be questionable at times

She rejected the notion that Malouf were using the signs as trademarks, as, in her mind, the selection of marks used in the Google AdWords platform does not create a connection with the services of the marks' owner, but act as a way to direct possibly interested parties to your own services. They can equally be acquired by any business, including Malouf's competitors, which would add further links in the search results. The marks are also invisible to the user, who will not see them outside of the results and their search query itself.  The invisible nature of the marks would not create an impression on the user that that specific word is what brought up the results, and therefore would not confuse them as to their indication of origin. She distinguished Google AdWords from metatags, which function differently and are possibly visible to the user (although, this writer will contest that many will ever see them), being therefore used as a trademark in the context of the Act. She concluded that "...the use of a sign which is invisible to the consumer is [not] use as a trade mark within the meaning of the Trade Marks Act".

Judge Katzmann then moved onto discussing the marks' use in the sponsored links that appear at the top of results when a keyword or words are searched. What is worth also noting is the use of the name Veda (and other words) in custom headings that appear within these sponsored results. Judge Katzmann saw that in the majority of the instances (all but one) the use of Veda was not a use as a trademark. In her view the use was to "...describe the object to which its services are directed — fixing, cleaning or repairing Veda credit files or reports — not as a badge of the origin of its business and therefore not as a trade mark". To put this into slightly different terms, this meant that the mark was used merely to describe a specific service, and not as an indication that it originated from Veda.

The final point in relation to infringement was whether the marks were used in relation to services in respect of which the trade marks were registered. As the marks were registered for several different classes they encompassed a wide array of services, including consultation, advice and analysis in relation to financial services (with plain financial services not being offered by Malouf). Judge Katzmann rejected Malouf's assertion, and accepted that the marks were used in relation to the services they were registered for, even if the services offered by Malouf were not identical to Veda's. After a very brief discussion, Malouf was also deemed not to have a defence under section 122 of the Act through a use in good faith. In the end Judge Katzmann saw that Malouf only infringed the marks in respect of two search queries (specifically "The Veda Report Centre" and "The Veda-Report Centre"), with the rest deemed not to infringe under the Act.

What was curious in the case is the discussion surrounding the European or UK position in relation to this type of meta-information and infringement of trademarks. Judge Katzmann distinguished both Google France SARL v Louis Vuitton Malletier SA and Interflora Inc and Anor v Marks & Spencer, determining that the wording used in the EU legislation was not an equivalent to the Australian wording, especially with the difference in 'using in the course of trade' (per Article 5 of the first Trade Mark Directive) and 'used as a trademark' under section 120 of the Australian Act. In her view, the use would have to be, contrary to the aforementioned judgments, as a 'badge of origin' and not merely in the course of trade (whether used as a badge or not). The invisibility of the use seems to be key here in an Australian context, whereas in Europe this seems to be mostly irrelevant under previous considerations.

The case also dealt with competition issues under the Australian Consumer Law, and Judge Katzmann deemed that the provisions were only contravened under the above two search queries for which the marks were also infringed.

All in all the case is very interesting, and provides some valuable insight into the nuanced world of the Internet and its hidden facets. Australian law seems to diverge, at least for now, from its cousins in Europe and the UK, and this judgment strongly cements it as such.

Source: K&W IP Whiteboard