Cochrane Steel had sought to interdict M-Systems for passing off because it bid on CLEARVU as a Google keyword generating adverts for its own products. The court held that where the use is solely as a keyword (i.e. it is not visible in the advert triggered) there is no likelihood of confusion or deception and therefore passing off does not occur.
|M-Systems bid secure|
The court also rejected an attempt to establish “leaning on” as a new species of unlawful competition. The interdict application was rejected and costs were awarded to M-Systems. The decision was handed down this morning in the Gauteng High Court (Johannesburg) by Judge Nicholls.
Timo Meintjes of M-Systems is “pleased with the decision because it promotes choice and competition which are good for the consumer, especially when there is no likelihood of confusion which the Judge found to be the case”
Yours truly and Ian Learmonth who acted for M-Systems provide further legal commentary here. Background to the decision can be obtained here.
A discussion of the case will take place through an interview with Gareth Cliff at CliffCentral studios on 13 November at 6pm. If you want to register please email us here. Spaces are limited so please hurry.
The case is important because:
· it is the first case in Africa on whether the bidding on a competitor’s trade mark for keyword advertising is unlawful, an IP issue of much national and international debate
· it provides further clarity on the scope of passing off, in particular that the concept of “leaning on” is not part of our law and that keyword bidding (without more) is unlikely to be trade mark infringement
· for Google, it supports their advertising model for South Africa
· it is of interest to all brand owners that use a website or other online marketing platforms
Take home points for brand owners are:
· Bidding on a competitor’s trade mark as a keyword is not generally unlawful unless:
o There is a likelihood of confusion eg counterfeit site or there is use of the mark in the text of the sponsored link or advert which leads to confusion
o The trade mark is registered and well known, and the owner is able to establish that there is an unfair advantage taken, or dilution can be shown
· Legal advice should be sought if a competitor’s trade mark will be used for keyword advertising
· Brand owners need take steps to combat the risk of aggressive adwords campaigns by competitors when formulating their marketing strategies
The case is open to a request for leave to appeal. Link to the judgment here.