Google AdWords – open season in NZ?

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Last month Google removed the restriction on using other parties’ trade marks as AdWord keywords in New Zealand (and Australia, China and Brazil). A process still remains for complaining to Google about the content of sponsored links, but not about the use of your trade mark as a keyword.

Google’s decision to no longer help trade mark owners restrict use of their trade marks as keywords follows an Australian finding that Google is not liable for misleading advertising by those using AdWords.

Court action is now the only way to prevent competitor use of trade marks as keywords in New Zealand. But will court action succeed? The answer is ‘maybe’. We discuss a UK case on keywords that issued in May and New Zealand developments below.

The UK decision – Interflora v Marks & Spencer

M&S sell a wide range of products, including flowers. Interflora sells flowers through a network of affiliated florists. Interflora’s affiliates operate under their own names but generally identify themselves as part of the Interflora network.

M&S used INTERFLORA as a keyword but its sponsored link itself made no mention of Interflora.

The High Court, via questions to the European Court of Justice, found that M&S’s use of INTERFLORA as a keyword infringed Interflora’s INTERFLORA trade mark registration.

However, how the court got to that decision is important. It found that use of a registered trade mark as a keyword infringes a trade mark registration where the overall effect of the use of the keyword and the sponsored link is likely to confuse the reasonable consumer.

Applying that rationale, given that Interflora had a network of affiliates operating under their own names, it was reasonable for consumers to assume that the M&S sponsored link, triggered by the keyword INTERFLORA, was an advertisement by a member of Interflora’s network, even though the sponsored link did not mention Interflora.

What the Interflora case means

The Interflora case confirms (in the UK) that using another party’s registered trade mark as a keyword is not in itself always trade mark infringement. The court will look at the keyword use in combination with the advertisement itself and consider whether in combination the two are likely to confuse consumers.

It follows that if the facts had been different, the Interflora decision would have been different. For example:

If M&S’s advertisement had clearly stated that it was not part of the Interflora network it’s unlikely the reasonable consumer would have been confused, and trade mark infringement would not have been made out, and
Where it is clear the advertisement is from a competitor, the reasonable person is unlikely to be confused so no disclaimer should be necessary. For example, a reasonable person would not be confused as to whether PepsiCo and The Coca Cola Company are related if PepsiCo used COCA COLA as a keyword for a PEPSI advertisement because everyone knows they are competitors.
New Zealand – any case law?

Back in New Zealand we have our own case regarding keyword use of a competitor’s trade mark. The case involves NakedBus’s use of INTER CITY as a keyword and within the resulting sponsored link.

So far we have had an interim injunction decision from the High Court in the Intercity case. In that decision the court declined to grant an interim injunction to InterCity, finding that confusion was unlikely to arise as a result of NakedBus’s use of INTER CITY as a keyword or within its sponsored link. However, on the registered trade mark infringement issue the judge made it clear his was a preliminary view, and the issue warranted fuller consideration.

So in New Zealand, the situation is not settled. But, the one decision we do have aligns with the Interflora decision, which is that keyword use, of itself, is not trade mark infringement.

The InterCity case is due to go to a full trial later this year. If it does, we will then have some firmer guidance from our courts on the keyword use issue.

There is however a chance that the InterCity case will settle before trial. In part this is because InterCity has admitted using NAKEDBUS as a keyword in the past, and NakedBus has taken preliminary steps towards pursuing a case against InterCity.


As outlined above, using another person’s trade mark as a keyword will not necessarily infringe trade mark rights. However, care still needs to be taken. You should look at your keyword and sponsored link together and ask whether in combination these are likely to lead the reasonable person to assume you are associated with the trade mark owner.

At the same time, it is difficult to have it both ways when it comes to keyword use. If you are likely to want to take issue should a particular competitor use your trade mark as a keyword, think carefully before you use their trade mark in the same way.

What happens from here?

We will keep an eye on the InterCity case(s). If there are any developments we will let you know.


Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.

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