The use of keywords and sponsored ads for driving increased levels of traffic to your website is now standard advertising practice for many businesses. But unscrupulous competitors may use keywords relating to your product to advertise their business.
You purchase keywords, through the likes of Google and Yahoo etc., which you hope will drive a higher level of users to your website. The purchasing of keywords allows you to create an advertisement for your business with a hyperlink to your website, which is triggered when users enter a search term which matches or, depending on the service you have purchased, is similar to, the keyword you have purchased.
With Google, advertisements can appear at the top of the search engine’s results page making them easily visible to users. The advertiser pays a certain amount each time a user clicks on the hyperlink in the advertisement which directs the user to the advertiser’s website. This is known as “cost per click”. More than one advertiser can purchase the same keyword and the advertiser who has bid the highest cost per click will have its advertisement displayed in the highest position on the search engine’s results page. The cost per click for each keyword purchased is subject to a maximum daily limit set by the advertiser. Once the daily limit is exceeded, the advertisement will no longer be displayed.
Whilst someone purchasing your trade mark as a keyword may not in itself infringe your trade mark, the content of the advertisement triggered by the keyword is regulated by trade mark laws.
The recent High Court judgment in Interflora Inc & Anor v Marks and Spencer PLC & Anor  EWHC 1291 (Ch) has highlighted how purchasing a registered trade mark as a keyword can amount to use of the trade mark, and trade mark infringement, if the ad triggered:
“…….does not enable reasonably well-informed and reasonably observant internet users (or enables them only with difficulty) to ascertain whether the advertised goods or services originate from the trade mark proprietor (or an economically-connected undertaking) or from an unconnected third party”.
Put simply, the courts are keen to ensure that consumers are not misled and that the essential origin function of a trade mark, i.e. that which identifies the origin of goods and services, is not affected.
The best way to eliminate the risk of misleading internet users (especially where your business provides products or services identical with or similar to the classes which the trade mark is registered for) and to not fall foul of trade mark laws is to ensure that any keyword you purchase which is a third party trade mark (whether it is registered or unregistered) does not appear in the ad itself, including the hyperlink.
But, if you discover that a competitor or another advertiser is bidding on your trade mark and that your trade mark features in the sponsored ad this could amount to trade mark use and trade mark infringement or passing off.