Open Discovery case
Teve Compras case
The use of the Internet has grown rapidly since the mid-90s, impacting and transforming the advertising industry. Search engine advertising systems make it possible to create ads that show products or services to users who are looking for them.
This has resulted in disputes in the trademarks field between the owners of registered trademarks and third parties using them. One potential source of conflicts occurs when a company obtains the name or trademarks of a competitor to use as keywords. By doing so, when a user searches for that name or trademark, the advert of the competing company appears in a preferential spot.
In a leading case on 4 May 2018, Division III of the Federal Court of Appeals decided on the use of a third party's trademarks as "keywords" in search engines.
In this case, an analysis was carried out of the defendant's (Open Discovery's) behaviour. This consisted of using the plaintiff's well-known trademark VERAZ as a keyword, with the aim of appearing preferentially on the Internet through ads targeting consumers that were searching for the plaintiff directly via its trademark.
The Court determined that such use constituted an undue use of the trademark and an act of unfair competition.
Two years after the Open Discovery case, Division I of the Federal Court of Appeals adopted a different criterion and rejected the judicial action by which Teve Compras had sued Sprayette and Google.
Teve Compras alleged that when an internet user entered the words "teve compras" in Google, a link sponsored by Sprayette appeared (the latter being a direct competitor of Teve Compras) through Sprayette's use of the AdWords programme. According to the plaintiff, this constituted an undue use of its registered trademark, exploitation of its prestige and diversion of its clients.
The Court rejected the complaint, basing its decision, among other things, on the fact that "the terms "TV", "teve", and "compras", which form the name of the plaintiff's trademark, were commonly used in the different classes of the nomenclature and are ordinary words that describe the activities of both the plaintiff and the defendant, as the two of them sold products advertised on television.
It can be understood from the Court's decision that no producer, importer or trader is permitted to monopolise the use of such terms, and parties are obliged to tolerate such use by third parties. In addition, the Court pointed out that the opposing trademarks were clearly distinguishable, and thus, in this case, neither the consumers nor the good commercial practices were at risk.
For further information on this topic please contact Daniel R Zuccherino at Obligado & Cia by telephone (+54 11 4114 1100) or email ([email protected]). The Obligado & Cia website can be accessed at www.obligado.com.