Keyword advertising offered by search engine service providers is a popular way to gain exposures for companies, in which particular keywords corresponding to the search engine user's search terms triggered the appearance of advertisement on the search engine results page. To make the ads more relevant to the users, "keyword insertion" feature is available in keyword advertising for companies to update their ads with the keywords that caused their ads to show. However, whether using a competitor's trademark as a keyword in keyword advertising has raised an issue of trademark infringement in practice around the world.

In Taiwan, according to the current practice, whether using a competitor's trademark as a keyword will constitute trademark infringement depends on the actual way of using the trademark. Generally, using a competitor's trademark as a keyword was not deemed as an actionable trademark use if the trademark was not used in the ad text itself under the past decisions by the courts. These courts had determined that the users that put in the search terms would not be confused and thought that the ads were offered by the trademark owner. Conversely, the past decisions had held that it was trademark infringement when the competitor's trademark was used in the ad text itself. In any event, it is worth mentioning that, even if a competitor's trademark is not use in the ad text itself, using a competitor's trademark as a keyword in keyword advertising might still constitute a violation of Fair Trade Act in Taiwan. In a recent trademark infringement case, the Taipei District Court had expressed and reiterated the view of the past decisions regarding this issue.

The complainant of this case is a manufacturer of female undergarments, while the defendant is the legal representative of the complainant's competitor. The prosecutor of this case alleged that the defendant's company purchased the complainant's trademark as a keyword in keyword advertising, and the complainant's trademark would trigger the appearance of the website of the defendant's company or their sales event advertisement on the search engine results page. The defendant specified that the company's advertising agency did not use the "keyword insertion" feature in their keyword advertising. Further, the defendant argued that using a competitor's trademark as a keyword in keyword advertising is not trademark use.

The Taipei District Court stated that, the defendant's company did not use the complainant's trademark in their ad text. In addition, the Court pointed out the ad text that appeared in the search results contained words such as "Ad", therefore the users of the search engine should not be confused that the ad text was related to the complainant. The Court further analyzed, even the ad text caused "initial interest confusion" and directed the user to click the link, the user would be able to identify that the website belongs to the defendant since there was not the complainant's trademark in the website. Given the above, since the use of the trademark was unseen for the search engine users, the Court held that using a competitor's trademark as a keyword in keyword advertising is not an actionable trademark use and the defendant was not liable for trademark infringement.