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.
Notes:
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.
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