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To bid or not to bid?

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The recent High Court decision in Victorian Plum Ltd (t/a Victoria Plumb) v Victorian Plumbing Ltd & Ors [2016] EWHC 2911 (Ch) (18 November 2016) is another reminder to businesses that engage in online retailing (or e-tailing) to be careful what they bid for.    

Keyword bidding is a practice which involves online retailers bidding for certain specified terms (or ‘keywords’) on search engines such as Google. The winner of the bid will appear at the top of any subsequent internet searches for the specified term as an advertisement. It appears to be fairly common practice amongst online retailers to use competitors’ trade marks as keywords in their search engine strategies. Using a competitor’s trade mark in this way could put you at risk of having to defend a claim for infringement of intellectual property rights.   

Previously, the leading case in the UK Interflora v Marks and Spencer [2014] concerned M&S having purchased the keyword ‘INTERFLORA’ on Google Adwords which Interflora successfully claimed was an infringement of its trade mark in the name. In the more recent case, Victoria Plum Ltd brought a claim for infringement of its registered trademark for ‘Victoria Plumb’ against Victorian Plumbing Ltd which had been bidding heavily for and using the keyword ‘Victoria Plumb’ for a number of years in internet search engines. Victoria Plum Ltd claimed that that use of the keyword ‘Victoria Plumb’ confused the public to a significant degree and that by bidding for and using keywords associated with Victoria Plum Ltd, Victorian Plumbing Ltd was using signs identical or confusingly similar to its registered trademark. Victorian Plumbing counterclaimed in respect of Victoria Plum Ltd’s bidding for the term ‘Victorian Plumbing’ as a keyword. Both parties’ claims were successful in their claims as the court held that the use of certain keywords by each of the parties was likely to lead to ‘confusion’ amongst the buying public.    

However, whilst these recent decisions may cause online retailers to reassess their search engine strategies with regard to keyword advertising, they also confirm the use of keywords in advertising is not inherently objectionable. In fact, their use is to be encouraged as fair competition, provided that the origin of the alternative goods or services is made clear to internet users so that confusion does not arise.