How does trade mark law apply to Google AdWords?

Google AdWords is at the centre of a trade mark case between Veda and MGE, shedding further light on how search engines are affected by Australian IP law.

There are a lot of complexities in IP law when it comes to interactions between competing organisations. As each instance of potential infringement can be quite unique, the outcome of legal battles plays a significant role in shaping copyright and trade mark policies.

With a recent case between Veda and Malouf Group Enterprises (MGE), there is now more clarity on how Google AdWords are affected by Australian intellectual property law.

What is AdWords?

When entering a search into Google, there are two types of results that come up – organic search results and related advertisements. Organic results are links to the webpages that the search engine's algorithms have determined are most related to the search query. Advertisements are still related to the search, but they show up because a company paid for that space.

Veda argued that MGE's use of the term 'Veda' in AdWords was a violation of trade mark rights.

In Google AdWords, companies choose strategic keywords and phrases and bid on the available ad space. A number of ads are chosen for display in an instant auction process, and companies pay if someone clicks on their ad.

Veda vs. MGE and AdWords

Google AdWords are at the centre of the dispute between Veda – a credit-report provider – and MGE – a company that offers credit-report repair services. According to the Law Society of NSW Journal, MGE used the term Veda – which is under a class 36 trade mark for financial affairs – in some of their AdWords phrases, such as "clean your Veda file".

In a case heard by the Federal Court of Australia earlier this year, Veda argued that MGE's use of the term 'Veda' in AdWords was a violation of IP rights under section 120 of the Trade Marks Act 1995 – infringement occurs when a sign substantially or identical to a registered trade mark is used as a trade mark for the same class of goods and services.

In defence, MGE argued that it did not use the term Veda as a trade mark – therefore not infringing on Veda's IP rights.

What was the result?

The presiding judge, Justice Katzmann, ruled in favour of MGE – noting that the term Veda was being used to identify potential customers, not to distinguish itself from other service providers.

In the case of the AdWords results, she pointed out that consumers were not able to see the keyword phrases. Therefore, the argument that it was a violation of trade mark did not stand up under scrutiny.

For more information about trade mark attorneys and services in Australia, Contact Alder IP today.