Google has recently announced the end of a policy preventing parties from purchasing the right to use another party's UK registered trade mark to trigger its own advert in a search result. Trade mark proprietors will now have to bid against other firms to ensure their advertisements appear beside the standard search results when their trade mark is typed into Google.
A similar system is already in force in relation to Canadian, Irish and US trade marks. This change will clearly incur costs for large brands in particular to ensure their adverts take priority. However, price comparison sites such as Gocompare.com may find the change to their advantage, allowing them to bid to be listed against brands which they compare.
Google's actions may have been prompted by Wilson v Yahoo! UK Ltd . The owner of a company providing snack food under the Community Trade Mark "Mr Spicy" sued Yahoo due to the search engine triggering sponsored links for Sainsbury's supermarket and price comparison site pricegrabber.co.uk. The text of the adverts did not refer to Mr Spicy, and the companies had in fact sponsored the word "spicy". The court held therefore that this could not constitute trade mark infringement.
Unauthorised use of a trade mark which has a reputation in the UK could take unfair advantage of, or be detrimental to, the distinctive character or the repute of the mark and therefore constitute trade mark infringement. In the High Court case of Arsenal Football Club plc v Reed, following reference to the ECJ the sale of merchandise reproducing the Arsenal trade marks was held to infringe on this basis despite clear indications that the goods were unofficial, as the court held there remained a risk of confusion.
The element of Arsenal which may prove influential in future decisions, particularly through ECJ jurisprudence, is the court's finding that a key issue is whether use complained of was liable to jeopardise the guarantee of origin, rather than whether the use was trade mark use. In RxWorks Limited v Dr Paul Hunter the ECJ determined that use of a sign within a computer system, such that the term appeared on-screen in various ways, was not infringing use, mainly because it did not affect the functions of the trade mark. The mark was hidden within the workings of the computer system, and was only likely to be encountered by system administrators. It was therefore held that it would not be perceived as indicative of trade origin.
In accordance with this principle, Google adverts appearing following a search for a registered trade mark will not reproduce the trade mark itself. Yet there may still be scope for the ECJ or a UK court to find this use affects the function of a mark. For example, if an entity bidded for Google advert rights in all permutations of another entity's registered trade mark, despite the adverts avoiding reference to the mark itself it could be argued that the distinctiveness, and accordingly the function, of the mark was being eroded by this continual association with another party.
The key is whether the deliberate association, rather than any explicit reproduction of the trade mark, could affect its function. However, such extreme use has yet to be considered by the courts. Legal theorising aside, the change of policy will have a definite effect on companies wishing to ensure their trade marks trigger their own adverts.