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Thursday, April 13, 2017

Online advertisers beware: the Federal Court draws a distinction between using a competitor's trade mark in AdWords vs metatags

By Natasha Dixon, Lawyer

A curious Full Federal Court decision has left Australian trade mark law in the context of online advertising in a state of confusion. Last week, the court held that use of a competitor's trade mark in metatags does constitute use as a trade mark, and is therefore trade mark infringement. That conclusion is perhaps difficult to reconcile with a 2016 Federal Court decision that ruled that use of a mark in Google AdWords does not constitute trade mark use.


Cairns Harbour Lights Pty Ltd (CHL) was the developer of an apartment building in Cairns known as 'Cairns Harbour Lights' or 'Harbour Lights.' Some apartments were let on a short term basis.

In 2009, CHL applied to register two word marks, 'Harbour Lights' and 'Cairns Harbour Lights', in relation to a variety of services. Registration was granted. Apartment owners were to free to use any letting agent, but CHL granted Accor exclusive rights to operate a letting service on-site, and an exclusive licence to use its trade marks. In 2007, an apartment owner started her own letting agency using 'Harbour Lights' and 'Cairns Harbour Lights,' and later sold her business to one of the respondents, Liv Pty Ltd (Liv).

CHL and Accor sued the apartment owner and  Liv (and its director) for trade mark infringement and misleading and deceptive conduct. The respondents cross-claimed that CHL was not the owner of the trade marks and sought rectification of the Trade Marks Register.

The primary judge upheld much of Liv's argument, and as a result, the 'Cairns Harbour Lights' registration was held to be invalid for all services, and the 'Harbour Lights' registration was limited to certain services. CHL and Accor were successful on their infringement claims in relation to what remained of the trade mark registrations, and to an extent for the misleading or deceptive conduct claim.

Accor and CHL appealed the decision.

The appeal case 

In short (and thus in stark contrast to the 360+ paragraph long judgment), the Full Court allowed Accor's appeal, overturning the primary judge's orders to remove the 'Cairns Harbour Lights' registration from the Trade Marks Register as well as the decision to remove some of the services in respect of which 'Harbour Lights' was registered.

Most interestingly, the court upheld the primary judge's conclusion that Liv's use of CHL's trade marks in metatags in the source data of its websites constituted use of those marks as a trade mark (and as such, was trade mark infringement).

Google AdWords vs metatags 

Turning then to the critical question – how do we reconcile that the use of a competitor's trade mark in metatags constitutes trade mark use whereas use of that same mark as a Google AdWord will not?

The differences between Google AdWords and metatags is minor. The function of both digital identifiers is to attract internet users who are looking for a particular source of information (more specifically in this case, a commercial source of goods or services) via specified search terms.

In the first instance Accor case, evidence had been adduced that demonstrated that the metatags containing the trade marks in question were not displayed on a user's computer screen, but rather were used by Google (and similar search engines) to determine what search results to return when a user undertook a search. The metatags would only become visible to those internet users 'who know what to look for', and had the ability to gain access to the source data of a website. Regardless, as mentioned above, the primary judge held that this could still amount to use as a trade mark.

Following the primary Accor judgment, Justice Katzmann of the Federal Court was asked to determine whether use of a trade mark as a Google AdWord was trade mark use in Veda Advantage Limited v Malouf Group Enterprises Pty Limited [2016] FCA 255 (Veda). Google AdWords is a program run by Google that enables businesses to select and pay for various keywords, which if 'Googled' by a consumer, leads to that company's advertisements appearing as sponsored links in the results.

In coming to a decision on this issue, her Honour stated that it was difficult to know what to make of the conclusions in the first instance Accor case. While she acknowledged that Google AdWords are entirely invisible to consumers (as opposed to metatags which are only invisible to 'ordinary' internet users), she did note that the conclusion in Accor was at odds with the court's conclusion on the point in Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd [2011] FCA 1319 (CTI). Similarly to Accor, in the CTI case the court was required to determine whether use of a competitor's trade marks in metatags was use as a trade mark. On that point, it was held that:

  • metatags are invisible to the ordinary internet user, even though their use may direct the user to a particular website (ie the use of CHL's trade marks in a search engine may direct the user to Liv's website); 
  • once at Liv's website however, the internet user would become aware that the website was connected with Liv's services, as opposed to Accor's. As a result, it could not be said that the use of registered trade marks in a metatag was a use that indicated the origin of particular services

Thus, 'metatag use is not use as a trade mark.'

In light of both CTI and Veda, it is perhaps strange that the Full Court has decided that use of a mark in metatags is trade mark use. The only difference between Google AdWords and metatags it seems, is that in the case of the latter, savvy internet users may be able to see the metatags. Even more surprising is the fact that Justice Katzmann was the presiding judge in the Veda decision, and also formed part of the bench in the Accor appeal.

What does this mean for businesses who use online advertising? 

Unfortunately, the decision has left the water somewhat murkier for businesses who use online advertising. Previously, it appeared settled that companies could be comforted in respect of the use of invisible keywords in the Google AdWords program (and other similar search engine programs) and within metatags.

That is no longer the case, and advertisers who wish to use their competitor's marks must proceed with caution. While the purpose and effect of both forms of digital identifier (Google AdWords and metatags) are virtually the same, it does not appear that they are to be treated as such under Australian trade mark law. This is an unfortunate outcome, as it is difficult to see how using a trade mark in a metatag in the source data of a website is use of the trade mark as a means of denoting the origin of the goods or services.

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