In brief - Weak trade marks make companies easy prey for competitors

Whether you might infringe your competitor's trade mark by using it in your SEO strategy depends on whether you use it descriptively or "as a trade mark" within the meaning of the Trade Marks Act 1995.

Search engine optimisation (SEO) strategies used by many businesses

It's common knowledge that increasing your ranking in search results on Google is critical to many businesses. There are service providers who earn a living doing this for clients and sometimes, they recommend use of a competitor’s trade mark in SEO strategies.

SEO is a marketing strategy used by many companies to increase the traffic to their website by obtaining higher ranking in search engine results. It involves various methods, including link building, creating web content that includes frequently searched words and phrases and adding certain keywords to a website’s “meta-data”, such as the title tags and descriptions.

Home lifts company takes exception to competitor's SEO strategy

In a recent full Federal Court case, Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd [2014] FCAFC 75, the material facts were that a business in the home lifts market, Easy Living, employed the words LIFT SHOP in the headline of its web pages as part of an SEO strategy.

Lift Shop is the owner of Australian trade mark registration for LIFT SHOP covering lifts and thus Lift Shop and Easy Living were direct competitors in the home lift market.

Easy Living's SEO advisor asked Easy Living to nominate the website addresses of its top five competitors, select keywords to “target” and draft a title for its website including the top five keywords selected. One of the keyword terms it selected was “lift shop”.

As a result, a Google search using or including the term “LIFT SHOP” displayed Lift Shop (the trade mark owner) and Easy Living in search results, usually at the top of the search results with their entries in fairly close proximity.

Examples of Easy Living’s use of the term LIFT SHOP are below:

Easy Living Lifts | Home Elevators | Lift Shop – Lift Shop
At Easy Living home elevators website you will find details on all of our lifts and home elevators here, which will help you achieve the easy living you deserve.

Easy Living Lifts | Home Elevators | Lift Shop – Home passenger Lifts
At Easy Living home elevators website you will find details on all of our lifts and home elevators here, which will help you achieve the easy living you deserve.

Lift Shop argues that competitor infringed its trade mark

In the original case in the Federal Court, Lift Shop  Pty Ltd v Easy Living Home Elevators Pty Ltd [2013] FCA 900, Lift Shop argued that using its trade mark as a keyword amounted to trade mark infringement. The judge at first instance dismissed the application, finding that the term “lift shop” was used descriptively and not “as a trade mark”.

While Easy Living’s stated objective was to appear in the same search results as Lift Shop, the primary judge held that it did not do this to obtain the benefit of the appellant’s trade mark reputation. Rather, it did so in competition with the applicant.

Use of words as a trade mark under the Trade Marks Act, generally means using them as a badge or indicator of the origin of goods and services, i.e. to indicate from where the goods come, as opposed to what the goods are.

Thus whether Easy Living had used the words LIFT SHOP as a trade mark, i.e. as a badge of origin to distinguish Easy Living’s goods and services from those of other traders, was critical to the case. 

Lift Shop's argues that primary judge failed to apply an objective test

Lift Shop submitted that the primary judge focused on Easy Living’s subjective intentions and therefore failed to apply an objective test in considering whether the respondent’s use of “lift shop” was use “as a trade mark” under section 120(2)(b) of the Trade Marks Act.

The court rejected this argument, finding that consumers would have understood the words “lift shop” to mean that the respondent’s business was of a similar character to other businesses operating as “lift shops”. Such use was said to be the “antithesis of trade mark use”.

The Full Federal Court concluded that those consumers searching the internet:

...using the search term ‘lift shop’ would have understood that [Easy Living] was using those words to convey that its business was one of supplying ‘lifts’ and ‘home elevators’.  … The use of the words ‘Lift Shop’ as shown [above], make clear that their only functional significance was to describe the character of that business. Their use by [Easy Living] was not to distinguish its business from others. the larger setting provided by the results pages, the use of those words was to designate, and would have been understood as designating, that [Easy Living’s] business was of the same character as, or at least of similar character to, other businesses grouped and operating as ‘lift shops’. Such use is the antithesis of trade mark use.

Use of competitor trade marks with high distinctive character as keywords could pose material trade mark infringement risk

While the court found in favour of Easy Living in this case, one should be mindful of IP infringement issues when using keywords for SEO if those words have become distinctive of other traders in the marketplace.

In the Lift Shop case, the keywords chosen were descriptive, meaning that Lift Shop was really a "weak" trade mark, with little distinctive value in distinguishing the goods of Lift Shop from its competitors. Thus Lift Shop was easy prey for competitors.

The position may be different if key words are taken from a trade mark with high distinctive character.

While this issue has not been resolved by the Australian courts, the recent EU decision in Marks & Spencer v Interflora suggests that in the EU at least, the use of third party trade marks as keywords poses a material trade mark infringement risk.

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2024.

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