South Africa had its first AdWords decision recently. In the case of Cochrane v M-Systems, the issue was this: is it lawful for M-Systems– which competes with fencing company Cochrane, the owner of the big-selling ClearVu brand – to acquire words like‘clearvu’ as AdWords, when this has the effect that people searching ClearVu get to see ads for M-System’s product, M-Secure?
There have been a number of European cases that have dealt with AdWords – Google v Louis Vuitton, Interflora v Marks & Spencer and Amazon v Lush – and these have basically said that the AdWords usage of another company’s registered trade mark is legal provided that it doesn’t cause confusion. In other words, it must be clear to the person searching that the ad that they’re seeing is not in fact an ad for the brand they searched for. These decisions are premised on the fact that most of us get how these things work, and that when we search one brand we know that we’ll get to see ads for competitor products.
What made this case different was that there was no trade mark registration for ClearVu – there was a pending application, but this had been opposed by M-Systems. So the case was based on passing off, something that requires a reputation, confusion and damage. Normally the court will start with the requirement of reputation, but not this time – it went straight to confusion. And it found that South Africans also get the internet, and that they won’t be easily confused. Judge Nicholls said this:
In this matter a consumer who searches for “ClearVu” is confronted with a multiplicity of suppliers. No reasonable consumer could possibly be under the impression that all of them relate directly to the applicant. The reaction to these might well be irritation or indifference but it is highly unlikely that the reasonably observant consumer would be confused and deceived into thinking they were all the advertisements of the applicant. To reiterate the sentiments in foreign jurisdictions, Adwords are a familiar feature of the internet and consumers are used to distinguishing them from natural search results.’
So without confusion there could be no passing off, and there wasn’t even a need to consider reputation. There was no ‘leaning on’ either, an action that Cochrane argued exists to protect the advertising value of a trade mark – a sort of passing off, but without the need for confusion. The judge gave this short shrift, saying that the authorities are clear – if there’s no passing off, you can’t get around this with some nebulous unlawful competition claim.