In this day and age, the use of internet search engines is a very common way for potential customers to find suppliers of goods and services. Perhaps unsurprisingly, this is also generating increasing numbers of trade mark disputes around search engine results, both in Australia and globally.

In a recent case, the Full Federal Court found that a company which had incorporated almost exactly the same words as its competitor's trade mark as part of a search engine optimisation campaign had not infringed the competitor's trade mark.1  This was because the words were not used to distinguish the company from its competitors, but merely to describe the character of that business and the nature of the goods and services it provided.

In this eBulletin, we review the decision and the lessons that came out of it for trade mark owners.  We also look at the decision in the broader context of trademark disputes relating to search engine results.

What happened?

LiftShop and Easy Living Home Elevators Pty Ltd are competitors in the Australian market for the supply of customised elevators/lifts and disability platform elevators. LiftShop Pty Ltd is the registered owner of a trade mark for the following composite mark in relation to elevators/lifts:

Click here to view image.

In 2012, Easy Living Home Elevators engaged the services of a Search Engine Optimisation Agency to enhance its online presence. As part of that marketing strategy, Easy Living Home Elevators incorporated the word "liftshop" into the title of the main page of its website, and elsewhere in its website.

When the words "lift shop" were searched on any search engine, the following results appeared:

Easy Living Lifts | Home Elevators | Lift Shop – Lift Shop

At Easy Living home elevators website you will find details on all of our lifts and home elevators here, which will help you achieve the easy living you deserve.

Liftshop commenced proceedings against Easy Living Home Elevators, alleging that Easy Living's conduct was misleading and deceptive in contravention of the Australian Consumer Law, and was also an infringement of LiftShop's trade mark rights under the Trade Marks Act.

When the matter found its way to court, the allegation of misleading and deceptive conduct was rejected on the grounds that the term "Lift Shop" has an understood generic connotation and, as such, there was no possibility of confusion in respect of the search results or websites.

The question of whether there had been an infringement of trade mark was also rejected on the grounds that the term "Lift Shop" had not been used "as a mark, much less a mark of its own." LiftShop appealed this part of the decision.

The Full Federal Court's decision: when are words used "as a trade mark"?

The Full Court of the Federal Court found that Easy Living had not infringed LiftShop's trade mark.

The Full Court held that while the "alleged infringer's intentions are not determinative", they were relevant when objectively considering the purpose and nature of its use of a particular sign, taking all the circumstances into account.

In this instance, the Full Court held that the relevant question was whether the words "Lift Shop", as used by Easy Living in the title of its web page, functioned to distinguish its goods or services from those of others.

It found that the words "Lift Shop" were not used to distinguish Easy Living from its competitors, but merely to describe the character of that business and the nature of the goods and services it provided.

The Court went further, stating that the actual use "would have been understood as designating that the respondent's business was of the same character as, or at least of a similar character to, other businesses grouped and operating as 'lift shops'", and that such use is "the antithesis of trade mark use."

Putting this case in context

This particular case is the latest in a number of trade mark disputes in the context of internet search engine results.

In February last year the High Court of Australia found that Google was not responsible for representations made by advertisers in sponsored links that appeared in Google's search results pages. Although Google "published" the sponsored links, it did not create them and as such, Google was a mere "conduit" for the representations of the advertiser.2

In Australia there is no current authority on whether the mere use of a trade mark itself in a search engine result will constitute an infringement of that trade mark or misleading and deceptive conduct. However, in May last year the High Court of England & Wales determined that these claims will depend on the context in which the trade mark is used.3

In this case the Court supported the principle that the use of a trade mark will not be legitimate where "keyword advertising triggered by the trade mark …does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the advertised goods or services originate from the trade mark proprietor (or an economically-connected undertaking) or from a third party."

While this judgment is not directly applicable to trademark matters in Australia, it is likely that the context of any disputed advertising will continue to be a determinative factor in future Australian decisions.

Lessons for trade mark owners

This decision has implications for any business using an online presence to attract new clients and customers, particularly where they operate in a highly competitive environment. It is a timely reminder of the importance of having a distinctive trade mark, and reaffirms the law surrounding the concept of use "as a trade mark" under the Trade Marks Act 1995 (s 120).

It also highlights the inherent weaknesses of trade marks which comprise descriptive terms and demonstrates the difficulty of establishing trade mark use when a registered trade mark is used descriptively.

Trade mark owners should be wary of marks that are descriptive of their goods and/or services, but which do not adequately distinguish their marks from those of others.

The decision also confirms that there is scope for businesses to seek to influence internet search engine results; however caution should be exercised to ensure it is done in a way that does not infringe trade mark rights. Particular care is necessary where the competitor business has a unique, non-descriptive name.