Intellectual property denotes ownership in the forms of expression of certain types of information and ideas. They are invaluable rights and protect a businesses identity and creations. IP can exist in every aspect of a business, including its processes, names, logos, impressions, formulation of ideas and know-how. It is the thing that makes one business unique from another. IP rights are transferrable assets of value and offer protection to brands whilst also maximizing healthy competition within a market.
A business needs to ensure it protects its IP and be careful not to engage in any practices that may infringe others.
Before the modern age of the internet, the extent of IP and its usage was easy to identify; publications were tangible things printed in books or newspapers. Adverts were published or aired on TV and radio. The question of whether a mark was used for commercial use was an easy one to answer.
Today, these questions are difficult to answer. There is a flurry of new law relating to intellectual property and it is likely to continue as technology snowballs. The law must stay up to date with new technologies and forms of publication. Unlike before, we are in a tabloid world where publications are quick fire and removable on many different platforms. There are more entrepreneurs using their personal social media platforms to launch businesses making it hard to decipher posts used for commercial purposes from those that are not.
The internet has made it significantly easier to hide intellectual property theft.
Algorithms below the surface of the internet are used to promote content and can be exploited by advertisers. Infringers can now replicate their competitor's know-how or even use their trademarks outright as key words and hashtags to boost their own exposure in ways that make it difficult or nearly impossible for the IP owner to monitor. If an infringer is found out, quantifying the damage running from such infringement is arguable.
Certain words at different times of the day bid on in Google Ads auctions have become valuable commodities worth millions of pounds.
It is paramount for companies to be aware of their intellectual property rights online to ensure they are protected and also to learn how to navigate potential infringement so as to be able to engage in honorable practices online themselves.
Use of third party trade marks as metatags
Meta tags are snippets of code that tell search engines information about a web page or post, such as how it should be displayed to visitors. Every web page has meta tags, but they're only visible in the HTML code.
Early cases found that use of trademarks in metatags was infringement. In Roadtech Computer Systems v Mandata Ltd  ETMR 970, the first case of its kind in the UK, the High Court held that the use of another’s trade mark in a metatag amounted to misuse of the mark. However, in Reed Executive plc and another v Reed Business Information and others  EWCA Civ 159 the Court of Appeal ruled that such use of metatags did not amount to trade mark infringement.
In the Reed case, the employment agency website, Reed, claimed that the publishing business, Reed Elsevier plc, had infringed the trademark "REED" by using the word "Reed" in the metatag of its website when advertising job vacancies. They relied on section 10(2) of the Trade Marks Act 1994 which states:
TMA 1994, section 10(2)
(2)A person infringes a registered trade mark if he uses in the course of trade a sign where because—
(a)the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or (b)the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark.
The court found that a web search against REED produced links to both the claimants’ and the defendants’ websites, so there was no confusion for the purposes of section 10(2) of the TMA.
Use of third party trade marks as advertising keywords
The Reed case also considered whether a trademark could be infringed by virtue of their being used in keywords. The Court of Appeal held that there was no likelihood of confusion when a search against REED brought up a banner advertisement for the defendants’ totaljobs.com website, as no user would connect that banner, which made no reference to the word REED, to the claimants.
The Reed case found that there was no infringement in that case because there was no risk of confusion over the use of the marks, but, the question remains: does the use of another's trademark in metatags and Adwords constitute infringement and do trademark owners have the power to prevent third parties from using their trademarks in such a way?
The answer is yes, subject to satisfying certain criteria that has been laid down by the ECJ.
In Google France SARL v Louis Vuitton Malletier SA (2010) ECR I-0000 concerning three sets of proceedings brought by trade mark owners against Google in France, the question was referred to the ECJ who gave its guidance on the liability of ISPs and advertisers for the use of others’ trade marks as advertising keywords. It confirmed that a trade mark owner can prevent others from using its trade mark as a keyword in relation to goods or services identical with those for which the mark is registered, provided that the advertisement that is displayed fails to make it clear that the goods or services emanate from someone other than the trade mark owner (the "origin function").
The ECJ set out in clear and unambiguous terms the test to be applied to determine whether the accused sign had an adverse effect on the origin function. In particular, the national court was required to consider the matter from the perspective of the average consumer, and to decide whether the advertiser had enabled that average consumer to ascertain the origin of the advertised goods or services to be able to make an informed decision.
Interflora Inc and another v Marks and Spencer plc and another  EWHC 1291 (Ch), related to the purchase by Marks and Spencer of advertising keywords including the word "INTERFLORA", which was a registered trademark of the Claimant. A search for INTERFLORA brought up sponsored links to Marks and Spencer. The UK courts referred the question of trademark infringement through use of Adwords to the ECJ. The ECJ confirmed that, as indicated in the Google France case, third-party use of a mark as a keyword can be prevented if the use takes unfair advantage of the distinctive character or repute of the trade mark or causes detriment to that distinctive character or repute.
It also said that, although use of third-party marks as keywords was almost by definition a form of “free-riding”, this was lawful as long as it was not done “without due cause”. “Due cause” would include the desire to engage in fair commercial competition with the trade mark proprietor, offering goods and services that represented an alternative to the brand in question.
In Environmental Manufacturing LLP v OHIM, Case T-570/10 RENV 2015, the EU General Court discussed the concept of free-riding. It relates to instances where there is a clear exploitation and "free-riding" on the coat-tails of a famous mark, or an attempt to trade upon its reputation. The court held that in order to determine whether the applicant's mark would take unfair advantage of the reputation of the earlier mark, it must be first shown that there was a link in the mind of the relevant public which connected the signs at issue and the goods concerned. Such link must then be assessed objectively, which should consider all the factors relevant to the case, including looking at the strength of the earlier mark's reputation and the degree of the earlier mark's distinctive character, the degree of similarity between the marks in issue and the nature and degree of closeness of the goods and services offered. The mere existence of such a link would not be adequate to establish a case of free-riding. Instead, evidence would have to be provided, which would show that there was an association of the opponent's mark which could give rise to a manifest exploitation or free-riding of the applicant's mark.
LUSH v Amazon keyword case
In Cosmetic Warriors Ltd and another v amazon.co.uk Ltd and another  EWHC 181 (Ch), Amazon had bid on certain keywords including “lush”, within the then "Google AdWords" service so as to trigger a sponsored link advertisement appearing on the Google search engine results page whenever a consumer typed “lush” into the search box. However, products produced by the claimants bearing its registered trade mark LUSH were not in fact available from the Amazon site. Some of Amazon’s sponsored link advertisements contained the word “lush” and others did not. The court found:
- Those advertisements that did not contain the word, but did show references to equivalent or similar products to those sold by Lush, did not infringe the LUSH trade mark under Article 5(1)(a) of the 2008 Trade Marks Directive. The court rejected Lush’s argument that the average consumer would expect the sponsored link to be of goods which were identified from the search term entered by the consumer, and said that this failed to recognize that consumers were familiar with sponsored ads and were used to seeing such ads from competing suppliers.
- Those advertisements that did show the LUSH mark, were infringing. The reasoning was that the average consumer seeing the ad would expect to find Lush soap available on the Amazon site and would expect to find it at a competitive price. Further as Amazon is a reputable seller, consumers would not expect Amazon to be advertising Lush soap for purchase if it were not in fact available for purchase and may well remain on Amazon to find the product or an alternative for sale and would persevere somewhat before giving up.
In May 2014, the High Court granted an injunction against further infringement in general form.
What about the Liability of the the Internet Service Providers?
Victor Wilson v Yahoo! UK Limited and Overture Services Limited  EWHC 361(Ch) concerned a case against Yahoo! search engine and asked this exact question. I.e. would it be an infringement by an ISP when a user entered a search query that was identical to the trade mark, and the search engine matched the search query to keywords selected by advertisers in order to display sponsored links. It was held that ISPs would not be infringing as there had been no "use" of the marks by the ISP themselves in showing the search results. This is contrasted to adverts shown by websites, such as Ebay, in L’Oréal v. Ebay (2009) EWHC 1094 the ECJ indicated that the display of trademarks as keywords in sponsored links to eBay’s website did constitute “use” as it created an obvious association between L’Oréal’s branded goods (mentioned in the advertisements) and the possibility of buying them through eBay and so could be taken to be infringing.
The E-Commerce Directive (Council Directive 2000/31/EC), provides for general content liability where illegal activities are undertaken in relation to content, including liability for breach of IPRs. ISPs in the UK, have a defence against claims for content transmitted over their networks in certain circumstances, largely where the ISP's activities are automatic, intermediate and passive.
The defence most likely to be relevant to the operator of a website is the ‘hosting defence’ under regulation 19 of the Electronic Commerce (EC Directive) Regulations 2002 (the E-Commerce Regulations), SI 2002/2013. Under this defence, an ISP is not liable where it has no actual knowledge of the unlawful activity or the information stored. This might be the case where, for example, a website included functionality allowing third party end-users to post their own content on the site.
However, once an ISP is in receipt of actual knowledge of the unlawful content it must remove or disable access to the material as expeditiously as possible (regulation 19 of the Electronic Commerce (EC Directive) Regulations 2002 (the E-Commerce Regulations), SI 2002/2013).
As an example, the Google Ads policy (here) states that Google will not investigate or restrict the selection of trade marks as keywords, however they will review complaints for advertising campaigns in the EU and may restrict the use of a trade mark in ad text. In response to a valid complaint, it will conduct a limited investigation as to whether a keyword (in combination with particular ad text) is confusing as to the origin of the advertised goods and services.
Although Google itself may not be liable (unless it fails to act to remove access to unlawful data of which it is aware), its advertisers may still be open to claims of trade mark infringement.
Retailers and brand owners can improve their brand profile online by purchasing advertisements to be displayed alongside web content, usually search results, following a specific query. The question of whether using another's IP in such advertisements and in their keywords or metadata does not allow for a simple answer.
Use of a trademark does not alone constitute infringement, however it is possible for such use to constitute infringement. In determining whether it does or does not it will be necessary to look at the intent behind using the mark and the impact on consumers understanding around its use.
In short, if its use is designed to confuse the public as to the origin of the mark and detriment the TM proprietor, then the answer is yes and an IP owner can prevent third parties from using their marks in such a way.
The question of whether a business may lawfully use its competitor’s trade marks to improve its own profile in search results is one of the most widely discussed in respect of the law and the internet. In the EU, it has been the subject of several referrals to the Court of Justice where Member States’ courts have sought guidance. Taking the ECJs key decisions, as discussed above, the position is broadly summarised as follows:
TM owners cannot prevent:
- third parties from purchasing their trade marks as keywords
- third parties from using their trade marks in advertisements where the use is necessary, descriptive and honest
TM owners can prevent:
- the use of their trade marks where the advertisement fails to make clear that it is unconnected with the brand owner ("the origin function"). Whether this is the case will vary depending on the circumstances, the nature of the goods or services and the manner in which the advertisement is displayed and will change over time
- the use of their trade mark where the advertiser is gaining an unfair advantage from the reputation of the brand by free-riding on the coat tails of the TM owner's reputation and investment.
Internet service providers, such as Google and eBay, will be liable where they:
- play an active role in the creation of an advertisement
- are made aware of infringing activity and fail to prevent it expeditiously.
There is no legal obligation on search engines or auction sites to actively monitor infringements or seek out illegal activity.
Effective Brand Management in Practice
There are various ways in which an organisation’s brand can come under attack from competitors or other opportunists and the nature of technology and the fact that there is often an international element can make this difficult to control. It is crucial for businesses and TM owners to protect themselves online.
Organisations should take a strategic approach to protecting its IPR. Below are some tips to protect your brand online:
- Get in first and register your trademarks in the jurisdiction that you operate. Ensure you register within the appropriate classes to give complete protection.
- Purchase relevant domains and social media tags.
- Use the (TM) or (R) marks next to any logo or mark you seek to protect to notify the public.
- Monitor the industry in which you operate and monitor words and phrases that are important to you by conducting regular searches online and on social media platforms.
- Connecting with potential infringers to make "trap sales" is permissible to try to obtain evidence of any infringement.
- Upon discovering infringement, ensure to deal with it. Lack of responsiveness could be a missed opportunity to take down a competitor platform and may lead to reputational damage and can even imply that you accept the third party use. However always seek legal advice before doing so to ensure you do not fall foul of any legislation surrounding groundless threats.
- Be ready to contact ISPs to file a complaint or with take-down notices to remove infringing material that violates the website’s terms and conditions. Generally, having a registered trade mark will make this process smoother, although a third party may also be liable through unregistered IP rights for copyright infringement or passing off. Consult the social media platforms' terms of business to find their policy on taking down infringing content.
- Ensure that you yourself have policies and procedures in place to enable you to respond quickly to other parties that contact you about infringement including your policy on taking down infringing materials in your Website Terms and Conditions for your website visitor's to view.
These are technical areas of law and often turn on a case by case basis so you should always consult professional legal advice when a potential infringement is discovered.
This information is in no way to be taken as legal advice or tax advice. It is for information purposes only and is in no way to be relied upon. You should always seek the appropriate professional legal advice before attempting to act on any of the information given here.
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