Court Ruling on South Africa AdWords Dispute

By the Editor In PPC 2 Comments

This topic was sent to us by one of our Google AdWords clients and was previously published on Fin24. We are by no means experts on the legal system, but have tried to rewrite the article as accurately as possible for educational purposes.

Adwords Trademark Policy

In August this year a company called Cochrane Steel lodged a complaint at the Gauteng High Court against a rival called M-Systems. The reason for this complaint was due to the fact that Cochrane Steel wanted financial interdict restraining M-Systems from using “ClearVu” as a keyword that they were bidding on. Along with this was a complaint that because M-Systems were bidding on it, the price had been driven higher. M-systems denied using “ClearVu” as a “meta tag”, but did admit to using the word in its keyword advertising.

For many years this has always been a big discussion – are you allowed to “lean” on another brand for benefit. I have, personally, sat in many meetings and debated the situation but with the local legal system there has never been a clear answer. That might change right now.

Cochrane Steel has bid to register the “ClearVu” brand in South Africa, however it has not been completed and therefore Judge CH Nicholls resorted to interpretations of common law. In doing so, the High Court ruled against Cochrane Steel under the basis that M-Systems is not guilty of passing off the ClearVu brand by also bidding on “ClearVu” as a keyword in Google AdWords.

This is the important part:

“The respondent’s use of keyword advertising, even where it had a registered trade mark over the keyword, would only be prohibited where it causes confusion,”

“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,”

And this is also very interesting:

The judge also struck down an allegation by Cochrane Steel that M-Systems has engaged in action known as “leaning on”, which is not part of South Africa’s common law.

Legal experts have described ’leaning on’ as a cause of action that relies on reputation but does not require confusion or deception.

Google South Africa is not commenting on the ruling, but M-Systems’ lawyer, Darren Olivier of law firm Adams & Adams, says the judgment brings the country in line with international rulings.

That certainly does sound like you’re able to bid on competitors brands and that opens up some great opportunity. With that being said, I specifically remember reading an article a couple of years ago that does allow a company to file a complain with Google should said company find that another company is trying to bid on their actually company name. I, unfortunately, no longer have a link for that article so I cannot substantiate that claim. It is worth reading the Google Trademark Advertising Policy though – it doesn’t sound as though Google cares, but the complicated part is that Google’s terms of service change per country.