Keywords debate spiced up by High Court decision

United Kingdom

In Wilson v Yahoo UK Ltd ([2008] EWHC 361 (Ch), February 20 2008), the High Court has held that when Yahoo! Search Marketing matched search terms entered by users to keywords bid for by advertisers in order to display sponsored links, there was no use of a trademark for the purposes of infringement.

There has been, and continues to be, a tension between the selling of keywords by companies such as Google Inc and Yahoo! to advertisers and traditional concepts of trademark law. In some countries (particularly France), the courts have ruled against Google's AdWords system on the grounds that Google was not merely a hosting provider, but was directly involved in and benefited from the advertising of the trademarks of third parties (see the Paris Court of Appeal's decision in the GIFAM Case). In other countries (eg, Germany), court decisions have been in favour of Google on the basis that there is no trademark infringement. In the United States, no final decision has yet been issued, but the trend of opinion seems to be that the use of keywords is generally acceptable.

In the United Kingdom, there has been no final decision so far, but the decision in Wilson may go some way to clarifying the issues. The facts of the case were unusual; the claimant was a litigant in person and the case needs to be seen in that light.

Victor Wilson is a mobile caterer known as 'Mr Spicy' (he sells spicy food from his mobile outlet at carnivals and festivals, among other events). Wilson owns the Community trademark MR SPICY for a variety of food-related goods and food services. He discovered that when the words 'Mr Spicy' were typed into the Yahoo UK search engine, a sponsored link to the websites of Sainsbury's and Pricegrabber came up. Neither of these sponsored links actually used the words 'Mr Spicy', although Pricegrabber used the word 'spicy'. Wilson considered that his registration was being infringed and commenced proceedings against Yahoo UK Ltd and Overture Services Ltd (which provides the sponsored site service). The defendants sought summary judgment and/or to strike out the claim.

The evidence showed that the defendants had not actually selected 'Mr Spicy' as a keyword to benefit from Yahoo's sponsored site service. The defendants had both selected the word 'spicy' and various other phrases (eg, 'spicy soup'). Because the trademark registration includes the word 'spicy', the sponsored sites came up when 'Mr Spicy' was typed into the Yahoo search engine.

Unsurprisingly, the court summarily dismissed Wilson's claim on the grounds that:

  • the trademark was not used by the defendants - it was the entry of the words 'Mr Spicy' into the browser that constituted use;

  • even if the response of the search engine could constitute use of the trademark, what was actually used was the word 'spicy' and not 'Mr Spicy'; and

  • even if 'Mr Spicy' had been used, there was no trademark use as it did not adversely affect the function of indication of origin of Wilson's mark. Neither Sainsbury's nor Pricegrabber were suggesting in any way that there was a connection between their business and products and those of Wilson.

It is the latter finding which is of most interest, as it suggests that the buying and selling of trademarked keywords is unlikely to be an infringement in itself. Whether any further use would do so may depend on any subsequent use of the trademark on the site to which the keyword is linked. The court clearly felt that Yahoo's sale of keywords was a legitimate business which was far removed from the goods and services of Wilson.

While the fact that this case may not have been fully argued by the plaintiff and that it was a summary judgment may reduce its precedent value, it will give considerable comfort to search engine providers and their customers.

Ian C Starr, Ashurst LLP, London

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