Search Engine Optimisation for online businesses is an important issue, which requires the expenditure of significant time, money and effort to manage and utilise, to the fullest advantage of the business. The Google AdWords programme means competitors' brands can be purchased and used to drive Google search results to your business and sponsored advertisements. Is this sharp business practice or fair play?
The position in Australia currently is, loosely speaking, it depends. So, it is important that brand owners and businesses alike understand the legal positon in Australia, and what is acceptable and what might constitute trade mark infringement or other breaches of brand owners' rights. We have previously reported on the developments in this area in our earlier Focus Papers, which can be found here.1 Below we look at another recent Federal Court case2 on point, and consider where the line in the sand as to acceptable use of competitor brands currently stands in Australia.
Veda Advantage Limited v Malouf Group Enterprises Pty Limited (Veda Case)
Veda Advantage Limited (Veda) is one of a number of companies in the Veda Group of Companies which provides financial services, particularly in the area of credit reporting. Veda provides a service which summarises an entities credit file and expresses that entities' credit rating through a score between 0 and 1200. This is known as a “VedaScore”. Veda is also the proprietor in Australia of various registered trade marks for (or containing) the word VEDA, in respect of financial services and related goods and services (Veda Marks).
The Respondent and advertiser in the Veda Case was Malouf Group Enterprises Pty Ltd (Malouf), which is a credit repair business. Both Veda and Malouf provide
credit repair services, but the evidence in the Veda Case was that each provided different offerings in this regard. Veda was, in effect, the keeper of the relevant records and as such corrected errors (if they occurred) on the face of those records. Malouf on the other hand did not have power to alter the records of Veda, but assisted people to rectify Veda reports, or deal with issues with other credit providers and errors.
Malouf purchased a significant number of Google AdWords including the term VEDA, as well as approximately 85 phrases including that term (for example "my VEDA file" or "VEDA credit check free"). Malouf's intention was quite clear, and the AdWords had been purchased so if a Google search was conducted for VEDA, the results would include Malouf's sponsored ads for its own services. The aim of Malouf was to target people who might be trying to contact Veda, including those wanting to obtain copies of their credit reports. As Mr Malouf noted in cross examination:
"So, with Veda approximately anywhere from 20 to 40 per cent — which is published on their website — of people may have an adverse credit history with a credit reporting body. A lot of them don’t know that they’ve got bad credit. So, potentially, one in five customers that are trying to contact Veda may be our target market. ... [W]e want to have our ad showing up — anyone trying to contact Veda — because, potentially, one in five of those customers may be wanting to fix their credit file."3
Veda alleged that Malouf had infringed Veda's rights in respect of the Veda Marks, both in circumstances where the term VEDA had been used as a Keyword (behind the scenes as such) as well as use which appeared within the text of the advertisements which appeared as sponsored ad links. Additionally, Veda contended that the conduct also amounted to false or misleading and deceptive conduct under the Australian Consumer Law.
Badge of Origin
As with previous cases in this area, the determination of whether use of Google AdWords (or Keywords) comprising of, or including, competitors' brands or trade marks, might amount to infringing conduct, seems to come down to whether such use of the Google AdWords or Keywords is as a Badge of Origin or Source Indicator.
Malouf had argued that the Google AdWords, including the term VEDA, which had been used, remained invisible to consumers and as such, could not be considered use as a Badge of Origin. On this analysis, similarly it was contended that there could be no infringement of the Veda Marks, or any breach of the Australian Consumer Law as alleged.
Katzmann J agreed with Malouf in respect of the argument of invisibility, and found that Malouf's use of the term VEDA in any manner where it remained (in effect) invisible to consumers, was not trade mark infringement or a breach of the Australian Consumer Law.
Consistently with the approach which has been adopted in earlier cases, Katzmann J also determined that use of a trade mark of a competitor which does, however, appear in the text of a sponsored link ad may well amount to trade mark infringement and act as a badge of origin. Whether it does will be a matter of fact in the particular circumstances.
Importantly, if the use is considered to be descriptive, then even if the trade mark does appear in the text of the sponsored link ad, it may nevertheless not be infringing. However, as the Veda Case highlights, some care certainly needs to be taken in considering what might be found to be descriptive use, rather than trade mark or badge of origin use. In respect of Malouf's use of VEDA, use of the term "The Veda Report Centre" was considered not to be descriptive, but was used as a badge of origin, to indicate a connection between Malouf's business and that of Veda. Other uses, which included (by way of example) "Fix Veda File"; "Get Your Veda Credit File"; and "Repair Your Veda History", were all determined to be descriptive uses, which did not give rise to any infringement or related issues, even when used in the text of the sponsored advertisements.
Ultimately, Katzmann J was therefore satisfied that Malouf had infringed the Veda Marks by using the sign VEDA as a trade mark in its sponsored link advertisements featuring the text “The Veda Report Centre” and “The Veda-Report Centre” and also contravened ss 18 and 29(1)(h) of the Australian Consumer Law in respect of this particular conduct.
Katzmann J dismissed all other claims of misleading and deceptive conduct and trade mark infringement by Malouf.
It is important that users of Google AdWords and Keywords are aware of the limitations on their acceptable uses, particularly if they are intending to utilise another's trade mark. Whilst, for now it seems, that such use invisibly will not be found to be infringing, any visible use must be approached with some care, and thought as to whether the use might be considered purely descriptive (so acceptable) or use as a badge of origin or source indicator, which may fall foul of the rights of a third party.
Similarly, owners of Australian registered trade marks or brand rights should be aware of their rights regarding a third parties use of their brands as Google AdWords or Keywords and the possible infringement and other remedies which may be available.