It may soon become a criminal offence to bid on a competitor’s registered trademark to advertise your products or services through Google AdWords and other PPC advertising solutions. Google have already clamped down on the use of competitors trademarks within ad copy but this could soon be taken a step further to give additional protection to branded terms and potentially eliminate bidding on competitor keywords altogether.
Numerous national European cases have been passed to the European Court of Justice (ECJ) as they work to ascertain whether the bidding on competitors trademarks should be classed as infringement upon them.
The adwords bidding system has historically been (and still is) ungoverned, meaning a company is free to use another company’s trademarks in order to attract people who may be searching for a rival brand.
While it will be some time before the ECJ makes its judgement, the Advocate General is expected to reveal his feelings on this issue in the near future. In most cases, the views of the Advocate General are borne out in the ruling of the ECJ, so his opinion carries a great deal of weight. Regardless of the eventual decision, now is a crucial time for a large number of businesses. Some will be looking to exploit this system before it’s too late, others will be looking to clean up their act in case the ECJ decides it is unlawful.
Exploitation and Damage Limitation
If the ECJ decides that bidding on registered trademarks within AdWords is illegal, those companies whose trademarks are being used without their permission will have some interesting opportunities for recompense:
- They can issue legal proceedings to get an injunction
- They can sue for damages
- They can demand an account of their competitor’s profits attributable to the trademark infringement
They can also recover any legal costs for the above. Clearly, while each of these presents a significant financial benefit, the biggest advantage will be the prospect of holding a nailed on legal claim against a competitor. As a business, that gives you a great deal of leverage!
Once a decision is reached – and the industry has no idea which way the decision will go – evidence will likely disappear very quickly as competitors cease bidding on competitors’ trademarked terms (see below for details) or even through google and other facilitators covering their tracks. Because of this, now is a good time to gather evidence should the opportunity arise when googling your own brand names and trademarks. Screenshots of google results pages and where they click though to may prove useful down the road, although this in unlikely to be enough on its own.
Risk and Mitigation
If you don’t bid on competitor keywords (or trademarks) in this manner, you’ve nothing to worry about and for the coming weeks this might be a good policy to adopt. It may be worth making sure you have registered your own, to ensure that your competitor cannot. Equally, it’s a good idea to exercise some vigilance and check that nobody in your business has done so – even unintentionally. Ignorance is unlikely to be an excuse.
If you are bidding on a competitor’s trademark to help promote your own business, the time may be fast approaching when you need to make sure that the other company doesn’t find out. The easiest way to ensure this is to suspend your AdWord account: google states that once you action this process, all adwords will stop within the hour. This link will take you to a page that gives instructions on how to do this:
It may then be advisable to open a new account for the purposes of re-establishing links to your own trademarks and key words even at a cost to your quality score. On the other hand, if the ECJ rules that this practice is actually lawful, you can simply reinstate your original account. After all – it’s better to lose some revenue from AdWords than it is to face a lawsuit and the resulting payout. Now might be a good time to review the revenue generated though bidding on a competitors brand terms if you have not done this for some time, it’s not really the time to be taking a punt on a not-so-profitable search engine estate branding exercise.