"Mr Spicy" trade mark case clarifies law on keyword advertising

Trade mark law is really beginning to get its head around the workings of search engine and the Internet. As you'll read, a search engine isn't regarded - at least for UK trade mark law purposes - as "using" (and so infringing) a trade mark when a trade marked term is displayed by a search engine as a sponsored link. The case only concerned the position of the search engine. It didn't look at the position of the advertiser who bought the search term. Here's the detail.

A recent UK High Court decision, Wilson v Yahoo! UK Ltd, has clarified the law on keyword advertising. The use of keywords for sponsored search results does not amount to trade mark infringement. As such, advertisers who sponsor links prompted by search terms are not at risk of infringing a third party's trade mark, even if the search terms entered (and subsequent keywords displayed) form all or part of that third party's trade mark.

The claimant in this case, Mr Wilson, owned a community trade mark (CTM) for "Mr Spicy." When users of Yahoo!'s search engine entered the search terms "Mr Spicy", sponsored links were displayed to third party sites (e.g. Sainsburys) who had bid on those keywords. Mr Wilson argued that Yahoo! infringed his trade mark by displaying these links to third party sites based on the search terms "mr" and "spicy", whether the sponsor had bid on such keywords individually or in combination.

Mr Justice Morgan awarded summary judgment to the defendant, Yahoo!, stating that the claim against it was "totally without merit." His reasoning, at paragraphs 64 and 65 of the judgment, was as follows:

"64. I can put my conclusions really quite concisely...as follows: The trade mark in this case is not used by anyone other than the browser who enters the phrase "Mr. Spicy" as a search query in the defendants' search engine...The response of the defendants to the use of the trade mark by the browser is not use of the trade mark by the defendants. That is enough to decide the case in the defendants' favour. But the matter does not stop there. If, by some process of reasoning, one were to hold that the search engine's response to the words used by the browser was, itself, use by the defendants, in my judgment, it is not use of the mark "Mr. Spicy". What, instead, is being used is the English word "spicy" as it appears in that phrase.

65. Further, even if, contrary to what I have now held are two fatal answers to Mr. Wilson's claim, I were to hold that the defendants were using his trade mark in doing what they did, then they are not using it as a trade mark as explained in the Arsenal Football Club case. In my judgment, this case, very comfortably and clearly, comes within paragraph 54 of the decision in that case; that is, Mr. Wilson is not able to prohibit the use of the words "Mr. Spicy" even when they are being applied to goods identical to those for which the mark is registered if that use cannot affect his own interest as proprietor of the mark having regard to its functions. That is satisfied here."

The "Arsenal Football Club case" to which Mr Justice Morgan refers is the case of Arsenal Football Club PLC v Reed decided in the ECJ.

It is now established in UK law that a search engine does not "use" a trade mark for the purposes of trade mark infringement by displaying keywords featuring all or part of such a trade mark in sponsored search results.

Laurie Kaye/Yasmin Joomraty

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