Friday, September 20News That Matters

Online marketing and trade marks: to infringe, or not to infringe? – Lexology


…Whether ’tis nobler in the mind to suffer The slings and arrows of poor searchability, Or to take arms against a sea of competitors (with SEO and Adwords)

As online visibility becomes essential for connecting with consumers, businesses are increasingly investing in measures to improve traffic on their websites. Some of these include acquiring strategic domain names, using search engine optimisation services, and paid search engine advertising. However, in employing these measures, it is important for businesses to ensure that they do not infringe the trade marks of their competitors.

Terminology

To unpack the jargon:

  • a domain name is an address on the internet i.e. ‘dlapiper.com’, that allows a business to host information about their product or service offering;
  • source code, in the context of the internet, is the underlying set of instructions that determine how and what information is displayed on a webpage;
  • a meta-tag is a piece of information in a website’s source code that is used to describe the contents of the webpage, but does not appear on the web page itself. This information is read and used by search engines to prioritise the relevance of webpages;
  • search engine optimisation (SEO) is the process of improving a website’s online visibility through strategic choice of meta-tags and other website information i.e. improving its relevance to appear higher in unpaid or ‘organic’ search results; and
  • paid search engine advertising (such as Adwords) involves businesses nominating search terms they want to be connected with advertisements for their product or service offering and when users enter the search terms, an automated auction process occurs to determine whether the business’s advertisement is displayed. These are usually marked as “Ad” or “Sponsored” in the search results to indicate that they are paid.

Trade Mark Infringement

In Australia, for trade mark infringement to occur, the following elements must be established:

  1. a person ‘uses’ a sign as a trade mark i.e. a badge of origin for a good or service offering. It is often difficult to determine whether ‘use as a trade mark’ has occurred, particularly in the online environment (some of these scenarios are discussed below);
  2. the person’s mark is either:
    • substantially identical – from a side by side comparison, noting the similarities, differences, and importance of the mark’s essential features, the overall resemblance or similarity; or
    • deceptively similar – the impression that the ordinary consumer would form based on recollection of the third party’s mark, to the registered mark; and
  3. the use is with respect to goods and services that are the same or closely related to those protected by the trade mark registration.

Notably, there are defences available against allegations of trade mark infringement, including that the trade mark was used with the consent of the owner, it was used in its descriptive sense, or that it was not ‘used as a trade mark’ at all.

Online Infringement

Domain Names

Domain names typically reflect a chosen business name or brand, in which case there would be an obvious connection with a product or service offering. On this basis, Australian courts have found that the way a domain name directs users to such a business offering would be sufficient for it to be considered a ‘use as a trade mark’ and thereby could be found to amount trade mark infringement.

Meta-tags

Similarly, Australian courts have found that, in certain circumstances, trade marks embedded in website source code could be considered ‘use as trade mark’ that would be trade mark infringement. In the most recent case examining this issue, the Full Federal Court found that meta-tags are ‘visible’ in the sense that people who knew what to look for and had the ability to influence search results could find the trade mark. In some instances, meta-tags appear on webpage by-lines in search results and source code can be viewed by anyone through internet browsers. As seen with successful SEO, meta-tags can be highly effective to manipulate search traffic and on face, this reasoning seems rational.

Paid Search Engine Advertising

By contrast, Australian courts have found that purchasing and using a Google Adwords would not be considered ‘use as a trade mark’ that is infringement. The court’s reasoning was that the mark is not visible to consumers and thereby this is not a ‘use’ per se. However, there is some argument that the purchase and use of the search term has the effect of improving relevance in search algorithms, which allows the user to trade off the goodwill of a trade mark, albeit in an indirect way. Commentary asserts that this is somewhat inconsistent with the reasoning with respect to meta-tags, in that the trade mark is being used for a material benefit in both instances and the distinction is superficial.

Key Takeaways

The main takeaway is that the law in this area is constantly evolving as novel contexts for trade mark use arise, especially on the internet.

Based on the current state of the law, businesses should:

  • not use domain names that reflect the registered trade marks of their competitors, or embed meta-tags in webpage source code, unless the mark is used in its descriptive sense or another defence applies; and
  • notwithstanding the current position, remain cautious of using competitor’s registered trade marks in paid search engine advertising services,

or otherwise potentially risk engaging in trade mark infringement.

Let’s block ads! (Why?)



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