ADWORDS: IT’S ALL CLEAR NOW

The South African Supreme Court of Appeal (SCA) recently ruled on the Adwords trade mark issue in Cochrane v M-Systems, aka the ‘Clearvu case’. The issue is basically this: is a trade mark registration infringed when a competitor of the trade mark owner bids on (buys) the trade mark as a keyword, which has the result that people searching the trade mark get to see sponsored links or adverts for the competitor?

There have been decisions on this issue in many parts of the world including the USA, Canada, EU, UK, Australia and New Zealand. The courts have pretty much all said the same thing, namely that there’s no trade mark infringement if the company that buys the keyword doesn’t set out to cause confusion. These decisions are all premised on the fact that most people know how internet searching works, and therefore aren’t surprised to see the adverts of companies other than the one they were searching for.

The SCA followed this thinking – although the Clearvu case was based on passing off rather than trade mark infringement, the issues are the same. The SCA pointed to the fact that the various adverts appear on different parts of the screen, and that they are also clearly distinguished from natural (unsponsored) search results. It said that if an advert contains no reference to the trade mark owner then consumers will assume that it’s not linked to the trade mark owner. Here’s a nice quote from the judgment: ‘Consumers will assume, as all internet users do, that they will have to separate the wheat from the chaff in deciding which hyperlinks appearing as a result of their search should be clicked. That presumably will cause irritation and perhaps even annoyance but it does provide the consumer with alternatives, thereby fostering competition’.

And here’s a nice one from a US decision that’s referred to in the Clearvu case: ‘The degree of consumer care is becoming more heightened as the novelty of the Internet evaporates and online commerce becomes commonplace.’

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