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Choose your Words Carefully

February 2017 - Corporate & Commercial . Legal Developments by Giambrone Law Studio Legale Internationale.

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Competitor pay per click campaigns where a company bids for the name of a rival in the hope that a customer or client who searches for a particular company will not notice when a similar company, rather than the company they selected, appears in the search suggestions.  This practice has always been regarded as a little underhand.

In a tit-for-tat case involving two plumbing firms who had both been trading since 2001 the question of keyword advertising involving a rival’s company name was considered when both firms had been employing the practice of bidding for each other’s name.

Victoria Plum (formerly Plumb) Limited –v- Victorian Plumbing Limited, the similarity of the companies names makes it abundantly clear that there is a propensity for confusion between the two firms.   Victorian Plumbing Limited had mounted a pay-per-click campaign and had been bidding for the keywords - Victoria Plum and variations of the name - on Google the result of which was designed to activate an advert for Victorian Plumbing Limited rather than Victoria Plum Limited.  Victoria Plum Limited brought proceedings against Victorian Plumbing Limited claiming that the bidding amounted to a trade mark infringement, whereupon Victorian Plumbing  Limited brought a counterclaim for passing off against Victoria Plum Limited as they, Victoria Plum Limited, had also been bidding in a pay per click campaign for Victorian Plumbing Limited’s name as a keyword with exactly the same objective, to trigger an advert for their services.

The judge considered the case for trade mark infringement made by the complainant and concluded that when internet visitors were particularly searching for Victoria Plum Limited’s products and services that confusion was occurring on a significant scale and that the defendant’s adverts were unlikely to “enable normally informed and reasonably attentive internet users, or enable them only with difficulty, to ascertain whether the goods or services referred to by the advertisements originate from Victoria Plum(b) or an undertaking economically connected to it, or on the contrary, originate from a third party".  Therefore the infringement claim was valid.

Victorian Plumbing Limited responded with a common law defence that of “honest concurrent use” based on the fact that both firms had been in the same market since 2001.  The court considered all relevant facts and concluded the function of a trade mark is unaffected by the honest concurrent of the same or very similar trade marks by two separate entities. The judge also found that Victorian Plumbing Limited could not rely on their defence as it only entitled a party to use their own name and as Victorian Plumbing Limited could not claim honest concurrent use as it had only used the trade mark in their key word advertising, amongst other things.

The judge turned to the counterclaim of passing off which Victorian Plumbing Limited brought on the basis that they had been trading for a few months before Victoria Plum Limited started trading.  He decided that Victorian Plumbing Limited had built up goodwill by the time Victoria Plum Limited started their campaign and a substantial amount of customers were likely to have assumed that Victoria Plum Limited was actually Victorian Plumbing Limited or connected to the company.  The judge concluded that this amounted to misrepresentation which was likely to cause damage to the brand.

Pay-per-click campaigns and key word advertising are strong tools that a considerable number of businesses employ but a competitor pay-per-click campaign comes perilously close the misrepresentation and infringement issues.

For more information about threats to your brand by competitors please contact  clientservices@giambronelaw.com