Making sure your business can be found easily on the World Wide Web is big business. Search engines like Google are constantly changing who they put first, second, third, and one millionth in their search results. How high a business ranks depends on how it attracts the attention of Google’s algorithms.
On the street, standing out can be achieved by having a good shop window, great products and services and a memorable brand. The same things matter on the internet, with keywords acting as a window. But what if it’s not the brand of the business that is used to attract customers in that window? The recent Full Federal Court decision of Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd1 (“the Accor decision”) highlights the fine line between smart website optimisation and trade mark infringement.
In this update, Shaun Creighton and Benjamin Duff of Moulis Legal examine how this and previous decisions impact on legal issues associated with what is known as “search engine optimisation” or “SEO”.
You wouldn’t put the trade mark of your competitor in your shop window, but can trade marks of a competitor be used as keywords to improve the searchability of a website?
Use of keywords in website design
Websites are commonly designed to include particular words (often called keywords) that are regularly used by people searching for information on search engines like Google, Yahoo and Bing. This SEO technique is used with the intention of increasing the likelihood of the website appearing higher in search results, giving it a competitive edge.
Keywords can be used as part of an SEO strategy in many ways, including:
However, keywords used in a SEO strategy are often protected as registered trade marks. While using registered trade marks as keywords for the purposes of optimising the searchability of a website is not an uncommon practice, intellectual property rights in those words are not somehow “negated” or “abandoned” simply because the use of that trade mark is taking place in a subliminal way.
When is a word a mere description and when is it a badge of origin?
Infringement of a registered trade mark will only arise if there has been use of that mark “as a trade mark”. Use of a brand “as a trade mark” means using that brand as a badge of origin.
In the Accor decision, the Full Federal Court considered whether a competitor’s use of the registered trade mark “Harbour Lights” in its website source code, for services that included acting as a letting agent, constituted use as a “badge of origin”.
The source code of a website is the underlying code that is used to create the site. It helps the website appear higher in search listings if it includes relevant keywords.
Liv Pty Ltd (“Liv”) used the term “Harbour Lights” in two ways in the source code:
The Accor decision was an appeal from the decision of a primary judge. The primary judge took the view that while Liv was in direct competition with Accor Australia, the use of the registered trade marks in its source code did not constitute trade mark infringement. The reasoning adopted by the primary judge was that use of “Harbour Lights” in the source code was a descriptive use, rather than being used as a badge of origin.
The Accor decision examined the decision of the primary judge in the context of the relevant use. Specifically, the Full Federal Court considered whether the words Harbour Lights were being used as “merely a description” or as a “badge of origin”. The answer? Context is everything.
According to the Full Federal Court, Liv could have used any number of descriptors or titles in its source code to differentiate its service. Liv’s use of the registered trade mark of a competitor operating in a same or similar service implied an intention to use the term Harbour Lights as a badge of origin. Accordingly, in this context, the use of a registered trade mark in the source code was not merely a descriptive use of those words.
The Accor decision confirms that relationships and context is critical when determining whether descriptive terms can amount to use as a badge of origin, and therefore amount to trade mark infringement. Liv used the registered marks of a competitor, not only in similar services but also in similar locations. This relationship between the two, according to the Full Federal Court, lent credence to the argument that the registered trade mark was used as a badge of origin.
Google AdWords™ – trade mark un-protection
By registering a trade mark, the owner enjoys a right of exclusive use of the trade mark in relation to the relevant goods or services concerned. This means a competitor may be prevented from using a substantially identical or deceptively similar trade mark in relation to the same, similar or closely related goods or services. Trade mark registration prevents competitors or others in the market from using that brand in an unauthorised manner, irrespective of the extent to which there is a developed reputation in that brand. The owner of an unregistered trade mark would first need to establish a reputation in that brand before having any prospect of preventing use of that brand by a third party. This highlights the importance of securing registration of important brands. That is, it is only a registered trade mark that ensures monopoly-style rights in a trade mark.
The ability of trade mark owners to enforce monopoly-style rights has not always been applied in the digital landscape. The reason for this relates to an analysis of how the trade marks are used in the relevant context. Questions such as whether use of the relevant mark amounts to use as a badge of origin, whether the use was visible and whether the use amounts to use in respect of the goods or services covered by the trade mark registration are important considerations.
The available case law outlines some rules that apply to trade marks appearing as keywords on a website or as part of a SEO strategy.2
Before now, the rules have turned on whether the trade mark was visible on the website and whether this implied a relationship between the trade mark holder and the website. Previous decisions have held that using a registered trade mark in this way may imply an endorsement or relationship between the trade mark holder and the website, which could mislead consumers.
However, a trade mark does not need to be visible on a website for a business to take advantage of it for the purposes of optimising the number of visitors to its website. In Veda Advantage Limited v Malouf Group Enterprises Pty Limited3 (“the Veda decision”), Veda sought to prevent the use of its registered trade marks in Google AdWords™ claiming that it was infringing its intellectual property rights.
Google AdWords™ are a “product” of Google. They allow a website to select keywords that, when typed into Google’s search engine, will place the website at the top of the search listing.
The Federal Court permitted the use of the registered trade mark in the Veda decision for this purpose for two reasons:
As a result the Court in the Veda case held that no implied relationship between the trade mark owner and the website could be made.
Removing the invisibility cloak?
Several other decisions have affirmed this part of the Veda decision, to the effect that a trade mark must be visible on a website to be protected. For example, in Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited4, the Federal Court distinguished between the invisibility of a meta tag and the physical presence of a mark on the website. A meta tag is text that appears in the code of a web page but not on the page itself. Similarly, in Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd5 the Federal Court held that including trade marks in meta tags did not amount to an infringement because the marks were invisible and their origin could not be detected.
In the Accor decision the Full Federal Court considered the question of whether words which are registered trade marks can be used without the permission of the owner in another context, namely the source code of a website.
This is how source code optimisation works – it modifies the actual code of the website so that it appears higher on search listings. This is achieved by including common keywords, which may inevitably or purposefully include trade marks in the source code.
In the Accor decision, the trade mark “Harbour Lights” was included in the source code of a website to help the website rank higher in search engine listings. In most instances source code is not visible to the average visitor.
The Accor decision differed from previous cases, as the invisibility of the trade mark on the website was not a deciding factor in assessing whether an infringement had occurred. Although the Harbour Lights registered trade mark was not directly visible on the website, the use of the trade mark in the source code influenced the search results. The Court went on to decide that use of the trade mark in this way amounted to use as a badge of origin (i.e., “as a trade mark”). These words were included in the source code to identify a connection with Harbour Lights, not merely to describe accommodation from which views of harbour lights could be seen. Accordingly, this use amounted to an infringement of the registered Harbour Lights trade mark.6
Time to review your optimisation strategy
All legal cases turn on their facts. Reconciling the Accor decision and the Veda decision requires a close examination of the facts and the contextual setting.
In light of the Accor decision, it is now timely to take a closer look at your own website optimisation strategy. If your business uses keywords to improve its search engine rankings, care needs to be taken to ensure that this does not infringe the rights of your competitors. It is also a good time to ask your IT department to investigate whether the websites of your competitors may be infringing your registered marks.
And, when considering your website optimisation strategy, you should also ask yourself whether your core brands are protected as registered trade marks in the first place.
To optimise is to make the most effective use of a situation or resource. The Accor decision confirms that an “optimal” SEO strategy requires effective use of your IT, marketing and legal resources.
This memo presents an overview and commentary of the subject matter. It is not provided in the context of a solicitor-client relationship and no duty of care is assumed or accepted. It does not constitute legal advice.
  FCAFC 56
 See Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd  FCA 1319, Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited  FCA 563, and Veda Advantage Limited v Malouf Group Enterprises Pty Limited  FCA 255.
  FCA 255
  FCA 563
  FCA 1319
 In the original Accor decision (Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd  FCA 554), the court appears to have tried to reconcile its decision with previous case law, by finding that the source code was visible to “those who know what to look for”. Not that this is inaccurate – depending on the Internet browser used, there are several ways the source code of a website can be viewed. Source code will be revealed on most browsers by pressing Shift + F12 or Ctrl +U. This idea of “those who know what to look for” seems to have been accepted, in part, by the full bench in the subsequent Accor decision discussed in this article.