For most businesses, the prominence of their website in search engine results has become an important part of their marketing efforts. The incentive to be featured above competitors is high, and many companies take active steps to improve their rankings. However, in choosing keywords and modifying websites to be more prominent in their sector, companies risk infringing the trade marks of their competitors.

A 2014 decision issued by the Full Federal Court in Australia demonstrates how carefully this line must be tread, and helps to clarify what is and is not acceptable. The decision, Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd [2014] FCAFC 75, was an appeal from a single judge of the Federal Court.

Background

Lift Shop Pty Ltd (“Lift Shop PL”) and Easy Living Home Elevators Pty Ltd (“Easy Living”) are active competitors, or even “commercial enemies”, in the elevator/lift market. In 2012, Easy Living took steps to improve its website traffic with Search Engine Optimisation (SEO), including:

  • Selecting “lift shop” as a keyword;
  • Adding “Lift Shop” in the title of their website, as it appears in search results; and
  • Amending its home page to include the phrases “looking for a lift shop?” and “we’re a lift shop in our 14th year”.

As a result, Easy Living’s web page was identified on page 1 of any search using the term “lift shop”. Easy Living’s entry usually appeared in close proximity to Lift Shop PL’s entry.  The following is an example of the search results for Easy Living:

Easy Living Lifts | Home Elevators | Lift Shop – Lift Shop 

www.easy-living.com.au 

At Easy Living home elevators website you will find details on all of our lifts and home elevators here, which will help you achieve the easy living you deserve.  

Lift Shop PL is the owner of the following trade mark in class 7 for elevators (lifts):

Lift Shop PL alleged that Easy Living’s conduct amounted to trade mark infringement and misleading and deceptive conduct. The case was heard by a single judge of the Federal Court (the primary judge), where both claims failed. Lift Shop PL appealed to the Full Federal Court on the grounds that the single judge had erred in deciding that there was no infringement.

Misleading and Deceptive Conduct

In relation to misleading and deceptive conduct under the Australian Consumer Law, Lift Shop PL alleged that the manner in which the Easy Living website was reported in the search engine results was likely to mislead members of the public into believing that it was the website of “Lift Shop” or was associated with “Lift Shop”. Whilst the primary judge was satisfied that one of Easy Living’s objectives had been to appear in search results which were likely to identify Lift Shop, the judge was not satisfied that this meant Easy Living thereby suggested, or intended to suggest, an association with Lift Shop PL.

The primary judge noted that the term “lift shop” has an understood generic connotation (i.e., a shop from which elevators can be purchased) and Lift Shop PL did not establish that Easy Living’s use would be understood by consumers in any other way. In the primary judge’s view, there was a clear differentiation between the entries relating to Easy Living on any search page from those which related to Lift Shop PL, and as such there was no possibility of confusion or suggestion that Easy Living was associated with Lift Shop PL. The primary judge considered the two sets of information were presented as alternatives, consistent with the idea that Easy Living and Lift Shop PL are competitors rather than being associated.

Trade Mark Infringement

Section 120 of the Australian Trade Marks Act 1995 (Cth) provides that, to infringe a registered trade mark, the mark must be used as a trade mark. In other words, the trade mark must be used as a badge of origin to distinguish one trader’s goods or services from those of another trader. Therefore, the key issue in this case was whether or not use of the term “lift shop” in the title of Easy Living’s website (as displayed in the search results) was used as a trade mark. The primary judge concluded it was not.

In reaching this conclusion, the primary judge noted that:

  1. it was clear from the search results provided in evidence that other businesses also used the term ‘lift shop’ in their website titles;
  2. the Bing search engine used it as a generic term to group three lift businesses together;
  3. Easy Living did not wish to suggest any association with Lift Shop; and
  4. the term was used in a descriptive way to take advantage of the operation of the search engines.

The infringement claim therefore failed.

During the appeal, Lift Shop LP submitted that the title of the webpage was given pre-eminence in the search results and stood in contrast to the description, and therefore “lift shop” clearly did function as a trade mark.

The Full Court rejected Lift Shop PL’s arguments and held that Easy Living’s conduct did not amount to trade mark infringement. In making this finding, the Full Court noted:

“Those searching the internet using the search term “lift shop” would have understood …that the respondent was using those words to convey that its business was one of supplying “lifts” and “home elevators”. Their use by the respondent was not to distinguish its business from others. To the contrary, the use of those words was to designate, and would have been understood as designating, that the respondent’s business was of the same character as, or at least of a similar character to, other businesses grouped and operating as “lift shops”.  Such use is the antithesis of trade mark use.”

Therefore, the term Lift Shop, as used in the title of the web page, did not function to distinguish Easy Living’s goods or services from those of others.

For a finding of infringement under Section 120 of the Australian Trade Marks Act 1995 (Cth), the respective trade marks must be substantially identical or deceptively similar.  In the first instance, the primary judge noted that, if it had been found that the term “lift shop” was used as a trade mark, he would have considered the marks to be deceptively similar, and therefore the trade mark infringement claim would have succeeded. 

In the Appeal, there was further argument concerning whether or not a use of the words “Lift Shop” in and of themselves in a plain font, could be considered deceptively similar to Lift Shop PL’s trade mark, which was a logo featuring the words Lift Shop and a graphic element (illustrated above).

Easy Living contended that it was the graphic, visual element of the Lift Shop PL trade mark that constituted its distinctive feature, because the word LIFTSHOP itself is descriptive of the goods the company sells. On the other hand, Lift Shop PL contended that the public would understand and remember the words “lift shop” as the significant aspect of the mark and would consequently be “caused to wonder” whether the business at www.easy-living.com.au was the owner of the mark.

The primary judge had concluded that the prominence given to the word LIFTSHOP in the registered mark permitted Lift Shop PL to rely on the reproduction of those words as a possible infringement, and the accompanying visual features of the mark did not detract from the central significance of the word.

The Full Court did not interfere with the primary judge’s conclusion on this question. The Full Court noted the trade mark is not a complex composite mark whose visual elements are indivisible from its words. The Court also noted that, whilst the fact that “lift shop” had an understood generic connotation was a relevant consideration on the question of deceptive similarity, that finding did not destroy the foundation for the primary judge’s conclusion that “Lift Shop” and the registered mark are deceptively similar. 

A Further Defence

Section 120(2) of the Australian Trade Marks Act 1995 (Cth) provides that a person is not taken to have infringed a trade mark if that person establishes that using the sign is not likely to deceive or cause confusion.

Easy Living contended that, if its use of the term Lift Shop had been considered trade mark use, it had a defence to infringement because such use was not likely to deceive or cause confusion. As the Court had already concluded, in examining whether there was any misleading and deceptive conduct, that the specific use of Lift Shop that Easy Living had made would not mislead consumers the Full Court considered this defence to be soundly based and noted that it could have stood as a separate reason for finding that trade mark infringement had not been established.

Lessons

This case highlights the need for traders to take care in adopting a competitor’s trade mark in SEO strategies. In particular the case highlights the critical importance of avoiding giving the impression that you are using any words or images that are part of a competitors’ trade mark to badge your goods or suggest their origin. In this case, the use of another’s trade mark in search keywords did not amount to infringement; however the result may be different in other circumstances, especially if the mark is not descriptive.

This case also highlights a major limitation of adopting a trade mark that can be taken to describe the products your company sells, as it can often be argued that the allegedly infringing use is not “use as a trade mark”.

That having been said, this case arguably also shows the power of a registered composite mark including both words and imagery, as a means of trade marking a descriptive term. A trade mark application for LIFT SHOP in plain font is not likely to be accepted for registration without extensive evidence of use, because it is too descriptive of the goods being sold. However, Lift Shop PL’s application for the composite mark, including its imagery, went straight to acceptance. However, in this case, the manner in which the Court judged the scope of the registration for the composite mark was effectively the same as a registration for LIFT SHOP in plain font.