High Court decision on keyword advertising and trade mark infringement

On 20 February 2008, the High Court handed down its decision in an important trade mark infringement case brought by Mr Wilson against Yahoo! UK Ltd and its sister company, Overture Services Ltd (“Yahoo!”). The case, which concerned an application for summary judgment and/or strike out, considered whether the use of keywords in sponsored advertising amounted to trade mark infringement by Yahoo!.

Background

Mr Wilson, who represented himself, was a mobile caterer and the proprietor of the Community Trade Mark “MR SPICY”. He complained that Yahoo! had infringed his trade mark by selling it to its advertising customers, or “sponsors”, as a keyword in their sponsored advertising service. In particular, Mr Wilson objected to the fact that members of the public entering the words “Mr Spicy” into Yahoo!’s search text box would be directed to the sponsored online listings for Sainsbury’s and Pricegrabber.com.

Yahoo! argued that they had sold the keyword “spicy” and not “Mr Spicy” to its sponsors. As such, sponsored links appeared upon a member of the public entering the words “Mr Spicy” into the search engine, due to the search engine’s recognition of the sponsored term “spicy” within the term “Mr Spicy”, rather than “Mr Spicy” itself. In essence, Yahoo! argued that they had not used, and had therefore not infringed, Mr Wilson’s trade mark.

Granting Yahoo!’s application for summary judgment and/or strike out, the Court held that, in displaying sponsored advertising links to third parties’ websites when the word “spicy” was entered into its search engine, Yahoo! had not used and Community Trade Mark similar to Mr Wilson’s “MR SPICY” trade mark for the purposes of trade mark infringement.

The key points of the High Court’s decision

• The trade mark “MR SPICY” was only used by the person(s) who typed “Mr Spicy” into the Yahoo!’s search query box, not Yahoo! or the sponsors.
• Sainsbury’s and Pricegrabber.com had bid for the keyword “spicy” and not “Mr Spicy”. In fact, no one had bid for the keyword “Mr Spicy”. Therefore, even if there had been use by Yahoo!, it was use of the ordinary word “spicy” and not “Mr Spicy”.
• Further, even if Yahoo! had used Mr Wilson’s trade mark, the court found that Yahoo! was not using the mark as a trade mark, in terms of indicating the origin of the goods (following the decision in the Arsenal football club case).

Comment

Although this case clearly provides some interesting analysis of trade mark law in the context of search engines, the fact that it involved a summary judgment application and a party acting in person meant that some of the most interesting points were not addressed in any detail.

The decision is, to an extent, a decision on the facts of the case and does not address the issue of advertisers who bid for other companies’ trade marks as keywords, particularly where it can be shown that the use of a third party’s trade mark creates confusion as to the origin of the advertised goods or services. “Spicy” is a common word in the English language, contained in many trade marks.

Possible defences to using a third party’s trade mark for a legitimate purpose, such as comparative advertising in good faith or where the website owner is a distributor of the trade-marked goods, also remain unaffected by this decision. Nevertheless this decision will be welcomed by search engines and other online advertising providers.

The Court commented that, because the sponsored links made no reference to Mr Spicy, it was difficult to see how the results on Yahoo! had any adverse impact on Mr Wilson’s trade mark rights. It is easy to imagine instances where this fact could be a distinguishing factor if similar cases are brought against advertisers who bid on key words in the future.

In the midst of conflicting judgments from EC Member States’ courts, it remains to be seen how this long awaited decision by the English courts will influence any eventual interpretation by the ECJ of trade mark law as it relates to keywords for sponsored search results.

For the full text of the decision, click here.