Brand owners have a simple and practical tool to prevent misuse of their trademarks in keyword advertising. As Norton Rose reminds, brand owners can exclude their trademarks from being purchased by their competitors as a Google keyword by using Google’s ‘AdWords trademark complaint’ process.

The process allows for 2 types of complaints:

1. a complaint against all users (which removes the trade mark from use by any one not specifically authorised); and
2. a complaint against a specific user.

To opt a brand out of the Adwords system, a trade mark owners enters its Google customer identification together with its trade mark registration details into the online form, then selects the required option to exclude the trade mark from use as a keyword.

An Australian court has found Google guilty of misleading and deceiving consumers with its AdWords-generated sponsored links.

Google’s AdWords program inserts “sponsored links” to advertisers in the results of Google web searches.  The content of a sponsored link is determined by the search term entered by the searcher.  Advertisers select the search terms (keywords) in response to which they wish to have their sponsored link displayed.  In various cases, advertisers select keywords that are the name or the trademark of their competitors – so that a sponsored link to the advertiser is inserted in the results of a search for the competitor.

In this situation, according to the decision of Full Court of the Federal court, Google is representing that there is a connection between the competitor business for which the user is searching and the advertiser.  Since there is no such connection in fact, Google’s representation is misleading and deceptive – and hence is prohibited under s.18 of the Australian Consumer Law.

The court also ruled that Google’s conduct was not saved by the s.209 “publisher’s defence”, which applies if the publisher can show it did not know, and had no reason to believe, that the advertisement was misleading or deceptive.  The court found that “No reasonable person in Google’s position could have failed to suspect that the use by an advertiser of a competitor’s name as a keyword triggering an advertisement for the advertiser with a matching headline was likely to mislead or deceive a consumer searching for information on the competitor.”

The court ordered that Google establish and implement a compliance program to prevent future breaches.

The Australian consumer protection authority, the ACCC, has appealed its Federal Court action against Google for misleading or deceiving consumers with AdWords-generated sponsored links. The ACCC sought declarations and injunctions against Google, on the basis that AdWords-generated sponsored links wrongly represented an association or affiliation between the advertiser and the advertiser’s competitor whose name or trademark was used as the AdWords keyword. In the first instance decision, Nicholas J agreed that the advertisements amounted to misleading or deceptive representations, but found that these representations were made by the advertiser, not Google. Accordingly, the action against Google was dismissed.

The ACCC has appealed Nicholas J’s decision to the Full Court of the Federal Court of Australia. In its press release announcing the appeal, the ACCC claims that Nicholas J’s conclusion is based on precedents concerning publishers of advertisements in traditional media, such as print and television, which do not apply to search engine providers. The ACCC believes search engine providers must be held “directly accountable for misleading or deceptive paid search results when they have been closely engaged in presenting and publishing those results”.

The appeal is expected to be heard in the first half of 2012.