Web search engines such as Google have become an essential for Internet users nowadays. Based on this dependency, search engines offer "keyword advertising" services – in which particular keywords corresponding to the search engine user's search terms triggered the appearance of advertisement on the search engine results page. In order to gain exposures, companies sometimes use competitors' trademarks or brand names in keyword advertising companions. However, this practice has sparked the issues of trademark infringement or unfair competition worldwide.
According to the past court decisions in Taiwan, it was trademark infringement when the competitor's trademark was used in the ad text itself. In addition to trademark infringement, using the competitor's mark in ad text might also be violation of Fair Trade Act. In the Fair Trade Commission's recent decision, the Fair Trade Commission held that inserting the brand name of another company in keyword advertising but not selling the product will constitute false advertising violation in Fair Trade Act.
In this case, the company EASE SLEEP was a seller of electric adjustable beds. In its Google keyword advertisement, EASE SLEEP used its competitor's name GLUCKLICHE as a keyword and inserted the name into the ad text. When the internet users searched GLUCKLICHE on Google, the ad text such as "EASE SLEEP – Various GLUCKLICHE electric adjustable beds, mattress, wrought iron bed" will be displayed in the search result. However, EASE SLEEP did not sell any products of GLUCKLICHE.
The Fair Trade Commission pointed out that, the ad text might cause the consumers to hold a false believe that EASE SLEEP was selling GLUCKLICHE products and misled them to click into the link of the ad text. According to the Fair Trade Commission, the false statements in the ad text will increase the opportunity of potential trade for EASE SLEEP and cause unfair competition. Given this, the Fair Trade Commission held that the keyword advertising of EASE SLEEP had violated Article 21-1 of the Fair Trade Act.