Recent case we conducted makes new law in Australia in the booming digital marketing space

The internet offers business owners endless opportunities to promote their businesses to a wide audience.  One useful internet advertising platform is Google AdWords, which allows advertisers to promote their businesses using paid sponsored link ads that appear at the top of a Google search results page.

However, due to the instant and informal nature of the internet, business owners often do not realise their internet ads could constitute trade mark infringement, defamation or misleading and deceptive conduct, just like ads in traditional media like newspapers and television.  Internet advertisers should always take care that their ads do not breach any laws.

The law in relation to internet advertising is always developing and the recent Federal Court decision in Veda Advantage Limited v Malouf Group Enterprises Pty Ltd [2016] FCA 255 marks an important decision for all internet advertisers.  McLaughlins represented the Respondent, Malouf Group Enterprises Pty Ltd (“MGE”), who used various trade marked terms of the Applicant, Veda Advantage Limited (“Veda”), in sponsored link ads.

MGE is in the business of repairing Veda credit reports, so it used the trade marked term “Veda” in the keywords of its sponsored link ads, to drive traffic to its website. Veda claimed that this was trade mark infringement and misleading.  Keywords are completely invisible to internet users but if they are used in a Google search can trigger a sponsored link ad to appear.

The Federal Court found in the very recent decision that such use by MGE of Veda’s trade marks in its sponsored link ads did not constitute trade mark infringement and was not misleading, as the use of the trade marks was not visible to internet users.  This is the first time an Australian Court considered whether the use of invisible keywords constituted trade mark infringement or misleading and deceptive conduct.

The key lessons for internet advertisers to take away from Veda Advantage Limited v Malouf Group Enterprises Pty Ltd are:

  1. If you use a trade marked term (e.g. your competitor’s name) in your visible online advertising, that may constitute trade mark infringement;
  1. If you only use a trade marked term in your visible online advertising in a descriptive manner (e.g. “repair of Mercedes vehicles”), that may not constitute trade mark infringement;
  1. If you use a non-trade marked competitor’s name in your visible online advertising, that may constitute misleading and deceptive conduct and breach of other consumer laws;
  1. If you use a trade marked term or even a non-trade marked competitor’s name in invisible keywords in your online advertising, so that customers searching those keywords are directed to your website, that is unlikely to constitute trade mark infringement or misleading and deceptive conduct.

If you require advice regarding your internet advertising and intellectual property rights, contact McLaughlins Lawyers, your Gold Coast lawyers.

Author: Sonaaz Farhadi-Fard

Partner: Ian Kennedy

Date: 14/04/2016