A very recent Federal Court decision, Veda Advantage v Malouf Group Enterprises [2016] FCA 255 (21 March 2016), considered the issue of trade mark infringement and misleading and deceptive conduct in using a competitor’s trade marks as keywords in both Google searches and in the headings of sponsored links.

Malouf, a company which assist people with their credit histories, used “veda” as a keyword in the AdWords service, and in the headings of sponsored links. The sponsored links included the following headings: “Clean Your Veda File”, “Fix My Veda History”, “Repair Your Veda Score” and, significantly, “The Veda Report Centre”.

When these terms were entered in Google, Malouf’s websites appeared as sponsored links at the top of the Google search results.

A judge of the Federal Court of Australia, Justice Katzmann, did “not accept that the use of a sign which is invisible to the consumer is use as a trade mark within the meaning of the Trade Marks Act”.

Her Honour found, “…ordinary or reasonable members of the relevant class would understand that by clicking on the headline to any of the advertisements in question they would be taken to the web page of the relevant Malouf business. They would have no reason to understand from the advertisements that the relevant Malouf website was operated by or on behalf of Veda, or with its sponsorship or approval…. the proposition that using words which are invisible and inaudible, indeed imperceptible, to consumers is using them as a trade mark makes no sense. How could the keywords be understood to be used to distinguish the services of one trader from those of another when the keywords are indiscernible? How could it appear to consumers that, by Malouf’s designation of the Veda keywords to Google, the words are used to denote a connection in the course of trade between Malouf’s services and the services provided by another trader, or to distinguish its services from the services of others, when the consumers have not seen or otherwise perceived the keywords?”

The invisibility of the words to consumers appears to be the significant issue. Fooling Google’s bot algorithms is thereby not misleading the public. On the face of it this gives a judicial nod to key word squatting and use of third parties’ brands in AdWords.

The words “The Veda Report Centre” were however found to be used as a trade mark to promote Malouf’s business by reference to the “Veda” brand. This was found to constitute misleading and deceptive conduct. The Court held that a reasonable consumer would be likely to think that “The Veda Report Centre” was operated by Veda or an affiliate. The term “The Veda Report Centre” used the definitive article “The” (such articles normally are an irrelevancy in trade mark practice), and also projected an “authoritative air”. The term was therefore likely to mislead a consumer, and this risk was exacerbated by the operation of the “Veda Resolution Centre”, operated by Veda.

So, the lesson seems to be that so long as there is use of third party brands in a descriptive way, as an AdWord, then this does not consititute trade mark infringement. The counter-argument, the concept that Google functions like a pair of binoculars, a device which magnifies or alerts the senses to particular features in the search term or online branding topography, and that it is the user relying upon the device who is misled, now seems to be almost dead and buried.