Imagine you are a well-known multinational company. You’ve worked long and hard to establish yourself as a market leader. You’ve taken advice from your trusty legal team to register your trade marks. You’re pretty proud of yourself for keeping up with new technology and have finally worked out how to use the Internet to best market your business.

Why, then, when you do a Google search for your trade mark term, do your competitors’ websites come up as sponsored links?

(If you’re interested to know what this might look like onscreen – with a nod to ClickMe for their creativity – click here).

Google has recently updated its AdWords trade mark policy. From 23 April 2013, Google will no longer prevent advertisers from selecting another company’s registered trade mark for use as a keyword in Australia (and China, Hong Kong, Macau, Taiwan, New Zealand, South Korea, and Brazil). This change brings Google’s AdWords policy on trade marks in Australia into line with the rest of the world.

The policy shift comes in the wake of the High Court’s decision in Google Inc v ACCC* in February this year, which determined that as a publisher, Google was not responsible for the misleading conduct of its advertisers. The High Court looked beyond the fact that Google’s AdWords service enabled advertisers to display misleading or deceptive advertisements. The High Court approved the trial judge’s finding that ordinary and reasonable users of the internet would have understood the sponsored links to be statements made by advertisers which Google had not endorsed.

This decision has clearly given Google confidence that it won’t be held liable for any potential trade mark infringement by an advertiser’s use of another trader’s trade mark as a keyword. This has already been its experience in Europe, where the European Court of Justice held in the Louis Vuitton suite of cases in 2010 that Google is not a trade mark infringer as it is only an information service provider, simply creating the environment in which trade mark owners and advertisers do business.

In addition, all keyword restrictions enforced by Google in response to trade mark complaints prior to 23 April 2013 will cease.

But would another company really be interested in using someone else’s registered trade mark as a keyword?

We’re speculating, but they might not be as keen as you would think. This is because:

  • users who search for a specific term generally know what they are looking for and are able to recognise the correct website by simply scrolling down to the ‘organic’ results (those that show up naturally as a result of their quality and relevance to your search term);
  • even if a user does click onto a competitor’s website, once they realise it is not what they were looking for, they will quickly click out of that site;
  • users are able to distinguish between sponsored links and ‘organic’ search results and/or
  • the actual text of the link will most likely not display the competitor’s trade mark as this is considered part of the text of the advertisement. Registered trade mark owners are still able to complain to Google about the use of their trade mark in this way.

Let’s see how this policy change plays out in Australia.