The recent judgement in Victoria Plum Limited v Victorian Plumbing Ltd has once again raised the use of trademarks in keyword advertising. But, has it made the issue any clearer?

The use of third-party trademarks in keyword advertising has been a thorny topic for IP owners and their attorneys for quite some time. This latest ruling will help brand owners to better define what does and what does not constitute trademark infringement in Google Adwords for certain types of claim. That said, it applies to a rather unique set of circumstances, and so won’t bring that much clarity to the topic as a whole.

The issue at question in Victoria Plum Limited v Victorian Plumbing Ltd was the defence of honest concurrent use. The two companies, both bathroom retailers, have been co-existing under their highly similar names since 2001, both off- and online. That co-existence became problematic when Victorian Plumbing began bidding on the trademarks of Victoria Plum (previously Victoria Plumb) as part of its pay-per-click (PPC) advertising strategy.

Victoria Plum(b) argued two cases of trademark infringement. Firstly, where its trademark was used in ads linking instead to Victorian Plumbing; and, secondly, where its trademark was used in ads, linking to Victorian Plumbing, that appeared as a result of Google’s “dynamic keyword insertion” service (which automatically populates the search term into the resulting ad text). Victorian Plumbing admitted trademark infringement on this second claim, but brought the defence of honest concurrent use against the first claim.

Is it honest?
The court applied the test set out by the Court of Justice of the European Union (CJEU) in Google France to the claim of trademark infringement, finding that the average internet user would be incorrectly led to believe that the goods and services referenced in the ad originated from Victoria Plum or an undertaking economically connected to it. As such, the ad was deemed to affect one of the key functions of the trademark (to indicate the origin of the goods or services).

As for the defence of honest concurrent use, the court ruled that, while the defence of honest concurrent use might entitle the other party to continue to use its own company or brand name, it does not give it the right to use the other’s name or trademark for commercial gain. In addition, the use could not be deemed to be ‘honest’, as the claimant was able to show that the PPC bidding activity was driven by the defendant’s desire to capitalise on customer confusion.

Finally, the court also considered a counterclaim for passing off, also in the context of PPC advertising. It found for Victorian Plumbing in its argument that the claimant’s bids on its trademark, which resulted in the display of ads containing the term “Victoria Plum(b)”, constituted passing off, as a result of the likelihood of confusion for internet users and the resulting damage to the trademark owner’s goodwill.

Implications for trademarks and PPC
It is worth noting that the similarity between the two company names makes the ruling rather unique. As Interflora v M&S previously highlighted, keyword advertising is not inherently objectionable from a trademark perspective (although there are cases where its use is considered infringement). Each case will depend on its particular facts, so before commencing infringement actions, it’s important to consider carefully whether the actions of the other party could affect the origin function of the trademark.