Can one company bid for a keyword of another company’s brand, driving up the overall bidding price for the entire market? That was the case presented to the Gauteng High Court when Cochrane Steel applied seeking a final interdict restraining a rival, M-Systems, from being able to bid on the ClearVu keyword on Google’s AdWords advertising platform.
The court found in favour of M-Systems with Judge CH Nicholls’ ruling having been based on common law interpretation as the registration of the ‘ClearVu’ brand by Cochrane Steel had not yet been completed. The judge’s ruling stated that M-Systems was not guilty of trying to pass off the ClearVu brand as it’s own to consumers by bidding on the word ‘ClearVu’ as a keyword in AdWords.
Google AdWords allows companies to bid in an auction style race to see who is willing to pay the most to have their adverts show for a particular search query in Google. Almost every internet citizen will be familiar with the three or more adverts you see relating to your searches on the top, bottom and sides of Google’s search results page. When more than one person is bidding for a keyword, the price of it goes up until one of the two is willing to pay a higher price than the other which, in the past, has led to some unscrupulous individuals using the system to force the price of competitors keywords up to drive up their advertising costs, or use up their daily AdWord budget allocation early, keeping them out of the search results for the rest of the day.
“The respondent’s (M-Systems) use of keyword advertising, even where it had a registered trade mark over the keyword, would only be prohibited where it causes confusion,” reads the ruling, which was handed down by Judge Nicholls. “In this matter a consumer who searches for ‘ClearVu’ is confronted with a multiplicity of suppliers. No reasonable consumer could possibly be under the impression that all of them relate directly to the applicant.”
Cochrane Steel has three weeks to appeal the High Court’s ruling but the ramifications of the ruling could carry on for years to come as companies begin to take advantage of the ruling to attack the keywords of their rivals.