Trade Marks and Sponsored Links

March 5, 2008

A press release from Bird & Bird reveals that the firm has been involved in successfully defending Yahoo! UK Ltd and its sister company, Overture Services Ltd (trading under the name ‘Yahoo! Search Marketing’), in what it describes as a groundbreaking trade mark infringement case concerning keywords and sponsored search results.

The case was brought by Mr. Wilson, proprietor of a Community trade mark for the words ‘MR SPICY’, registered in respect of food, sauces and spices and provision of food and drink. Mr. Wilson complained that sponsored links to third parties’ websites appeared when a user typed ‘MR SPICY’ into Yahoo!’s search engine – arguing that this constituted infringement of his trade mark by the defendants.
The Yahoo! companies argued that advertisers whose sponsored links appeared had not purchased ‘MR SPICY’ as a keyword.  Instead, sponsored links appeared due to matching technology which responded to the input of ‘MR SPICY’ by displaying sponsored links to advertisers who had bid on related keywords, such as ‘SPICY’.   Mr Wilson claimed this was also trade mark infringement.
The Yahoo! companies applied for summary judgment or for the claim to be struck out on the basis that they have not used the trade mark or that any use by them did not amount to ‘trade mark use’.
A High Court decision was handed down on 20 February 2008. It determined that when Yahoo! Search Marketing matched search terms entered by users to keywords bid on by advertisers in order to display sponsored links, there was no use of a trade mark by the Defendants for the purposes of infringement.

In his decision Mr Justice Morgan held:
• The trade mark was not used by anyone other than the user who entered the words ‘MR SPICY’ into the search engine.
• The defendants had only responded to the use by the user and this did not amount to use of the trade mark by the defendants. The judge held this would even be the case if advertisers had bid on the keyword ‘MR SPICY’.  
• Even if there was use by the defendants, it was use of the English word ‘spicy’ and not ‘MR SPICY’.
• Even if there was use of ‘MR SPICY’ by the defendants, such use was not use ‘as a trade mark’ following the ECJ case in Arsenal Football Club plc v Reed (C-206/01).