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Keyword advertising & trade mark infringement

This is a quick heads-up on two recent trade mark infringement judgments, both to do with the use of a third party's trade mark in a keyword advert. Keyword adverts are the sponsored links that sit alongside ordinary search results on search engines such as Google and Yahoo!

UK case: Victor Wilson v Yahoo ("Mr Spicy")

The first is a UK High Court ruling in Victor Wilson v Yahoo!, discussed earlier this month by the IPKat. The claimant owned a Community Trade Mark for "MR SPICY", registered for food and drink. When users searched against this phrase on Yahoo!, adverts for Sainsburys and Pricegrabber appeared. This happened because those third parties had chosen to use the word "spicy" as one of their keywords.

The High Court ruled that the use of "spicy" as a keyword did not infringe the "MR SPICY" trade mark. The Court held that the only use of the mark was by users of the search engine. In addition, the Court ruled that use of "MR SPICY" as a keyword would not have been trade mark infringement because this was not "trade mark use".

This ruling clarifies the UK law position on the use of trade marks as key words. However, it does not address the use of trade marks within keyword adverts themselves. The position on the latter point is made clear by Article 9(2) of the Community Trade Mark Regulations which expressly lists "using the sign... in advertising" as something that can constitute trade mark infringement.

US case: "Smart Money Clip"

Out-law.com provides a report on this case (link above). The key facts are as follows:

• The claimant (plaintiff in US legal terminology) had registered the trade mark "SMART MONEY CLIP" for money clips
• The defendant registered the term "SMART MONEY CLIP" as a Google keyword
• The defendant featured this term in the keyword adverts themselves, which were for money clips

Here, the North Californian District Court found that the defendant's usage was trade mark infringement. Whilst a good result the claimant, the ruling will slightly irritate IP lawyers because the Court did not distinguish between "up front" and "behind the scenes" use - in other words, what if the defendant had registered "SMART MONEY CLIP" as a keyword, but hadn't used the term in the actual advert?

IMPACT comment

These are not the only recent trade mark rulings to do with keyword adverts. Earlier this month, we reported that the German Courts had ruled that "using a competitor company's name as a search engine keyword (e.g. Google's AdWords service) is lawful provided it's clear that the advert in question is for the advertiser's own products/services, not those of the competitor."

Put together, the 3 rulings indicate that keyword advertisers should steer clear of using the trade marks of competitors as part of their adverts. The UK and German rulings also suggest that advertisers targetting those jurisdictions can use competitor trade marks "behind the scenes", as keywords, without fear of a successful trade mark infringement claim.

This post isn't intended to be a comprehensive summing up of trade mark law on keyword advertising; if you have written one or know of one then please let us know and we'll post a link. Have a good week!

Laptop theft leads ICO to declare Skipton in breach of the DPA

Looking at the latest ICO press releases, we see that last month the ICO found Skipton Financial Services to be in breach of the Data Protection Act. This arose out of the theft from a Skipton contractor of a laptop containing the unencrypted personal data on 14,000 Skipton customers. The reason for the finding was that the data was not encrypted.

Skipton has signed an undertaking that it will ensure the secure of personal data, to encrypt 'sensitive' data held on laptops, and to perform risk assessments where contractors are processing personal data for the company.

UK software patent law uncertainty continues

The uncertainty over whether computer software is patentable in the UK continues, following a decision by the High Court last week which the UK Intellectual Property Office has announced it will appeal. The ruling relates to an application by Symbian for a patent to do with Dynamic Link Libraries (DLL).

From Symbian's perspective, the High Court ruling applied the less restrictive policy of the European Patent Office on software patents, therefore allowing the patent. From the UK IPO's perspective, the ruling was a mistake because the High Court wrongly applied previous case law, and it has announced an appeal to rectify this mistake. The Society of Computers & Law news page has a good summing up of the story, as does BBC News.

In terms of the subject of the patent application, whether or not Symbian's new DLL technology could or should be patentable is a moot point. DLL technology has been used by operating systems for a very long time; since the earliest days of Windows and no doubt in other operating systems too (here, my techie knowledge fails me!), and it is difficult to see what particular technical advance Symbian could have made. Andres over at Technollama is not shying away from an opinon on the issue.

Until the judgment on the appeal is given (don't hold your breath, it will be some time), uncertainty over the patentability (or extent of patentability) of software in the UK will continue. Even after that, the technical test for patentability for software will be probably still be beyond the understanding of all except patent agents and barristers specialising in the area.

New ICO survey reveals level of public concern over data protection

The Information Commissioner's Office has released a survey of 1,000 people across the UK, which it claims shows that the public has 'woken up' to privacy. Whilst the survey itself is a huge set of figures (28 pages of them, a real treat for stats fans), an ICO press release and a BBC News article help shed some light on the survey's implications. Most notably, over 70% of those surveyed felt powerless over how their personal data is looked after (see page 3 of the survey) and over 85% refuse to give personal data when given the option.

This survey should prove of great interest and relevance to organisations that handle (or want to handle) personal data; with public trust in this area having disappeared, organisations must look to regain it. In our view, openness and transparency about data protection policies and processes would certainly assist. For most, the privacy policy on their website is the nearest thing they have to a public statement on their data protection policies and practices. For organisations that rely on personal data to do business (and therefore, public confidence and trust in their handling of that data), now may be the time to make their data protection policies public.

DRM gets another lease of life

Reports in the Financial Times today suggest that Apple, massively influential in the music industry through its iTunes store, is about to shake things up again with a scheme allowing unlimited downloads from the store in return for a monthly fee.

Given how zealously Apple likes to retain control over its technology, and how this is mirrored by the record industry's love of control over its content, it's highly unlikely that the resulting service will be DRM free because Apple will want/need some means of dictating how long users can keep hold of downloaded music. Charles Arthur in the Guardian shares this opinion.

If this service goes ahead, it is likely to give DRM (digital rights management) a new lease of life. DRM is also used for other new and popular services such as BBC iPlayer and the movie rental facility that US users of iTunes can access. Whilst this technology is not exactly liked by many, it continues to be popular amongst content owners as way of stopping (ok, trying to stop) people from sharing their content. For short-term access and rental services, the technology is ideal. So, DRM, we won't be saying goodbye to you any time soon...

St Patricks Day legal action: this time it's an Irish ISP being sued

In what is probably not intended by the record industry to be a St Patricks Day gift, Out-law.com reports that Eircom (an ISP) is being sued by 4 record companies for failing to stop its services being used to send copyrighted materials.

Music, fans & copyright online: Open Rights Group event

Linking in nicely to our previous post, the Open Rights Group is holding an event called "Music, fans & copyright online" on Wednesday, 2pm at the London School of Economics. More details at the Open Rights Group Blog.

In my view, the ideal event on this subject would be one where we hear from music industry reps, ISPs, people like the Open Rights Group and, most importantly, musicians themselves. If you do hear of such as event, let me know!

Worldwide piracy crackdown threatens ISPs

As you may have read, the UK government has said that it is becoming increasingly frustrated by the volume of illegal file swapping taking place online, and has threatened new legislation by April 2009 if the situation doesn't rapidly improve. The grumblings come from a report issued by the Department for Culture, Music & Sport (DCMS) called "Creative Britain: New Talents for the New Economy".

The report calls for collaboration between internet service providers (ISPs) and rights holders to deal with online piracy. The DCMS states: "While a voluntary industry agreement remains our preferred option, we have made clear that we will not hesitate to legislate in this area if required."

The UK music industry is an important part of the UK economy, bringing in £5 billion a year and employing some 126,000 people. It is therefore perhaps unsurprising that UK gov wants to protect this prized asset.

The UK government's announcements are part of a wider trend. The music industry worldwide is lobbying for ISPs to be made responsible for pirated materials being sent across the internet. This lobbying is reflected by increasing noise from the industry in the media. For example, see the calls for legislation at an EU-level by the IFPI. Already, the industry has had some success: in Japan, the 4 main ISPs have reportedly agreed to disconnect users who use the most common methods of file sharing.

Online file sharing is a complex and messy set of issues. In the rest of this post I'll try to outline at least some of the issues that governments across the world and their electorates are having to consider.

Court considers "all reasonable endeavours"

Those of you that negotiate contracts may find useful a recent Chancery Division decision, Hiscox v Pinnacle. One of the points considered in the case was the meaning of the certain standard of performance wording that often features in contracts:

• best endeavours
• all reasonable endeavours
• reasonable endeavours

This case doesn't appear to have been reported widely. From reports by Burges Salmon and The Times Law Reports it seems that:

• "best endeavours" is a higher standard than "reasonable endeavours"
• "best endeavours" and "all reasonable endeavours" are equivalent standards.

Whilst the first point is established law, there has been dispute amongst contract lawyers as to the second; many regard "best endeavours" as being a higher standard than "all reasonable endeavours". Following Hiscox v Pinnacle, that view must be considered wrong. This is something that contract lawyer will have to take into account from now on.

In addition, the term "all reasonable and proper steps" was considered. The Court found that this standard was less onerous than "all reasonable endeavours".

For those that don't negotiate contract, this decision might seem a bit abstract and irrelevant. However, these standards of performance are often at the core of a contract and central to the deal - to oversimplify, the question issue is: how much a supplier has to do for its money?

Testing Testing 1 2 3

Those of you that read IMPACT via the website rather than email or RSS may have noticed that the blog has a new design.

At the moment, like the BBC iPlayer site, the new design is still in the beta stage. Well, that's our excuse for going live with the design in order to spot errors. (Unlike the iPlayer, we haven't made any major mistakes with the design, but that's another story...)

If you have any feedback on the blog design, please leave a comment on this post.

Apologies for the drop in the number of posts this week - too much messing about with the new design. Substance over style wins the week! Have a good weekend.