Fair shake of the source bottle - Full Federal Court confirms trade mark use in source code can be trade mark infringement

When improving the searchability of their websites, businesses sometimes use their competitors' registered trade marks in website source code. A recent Full Federal Court decision has confirmed that this can amount to trade mark infringement, even though the source code is not ordinarily visible when a website is viewed by a consumer. By contrast, it seems that merely using competitors' trade marks as Google AdWords will not (in and of itself) amount to trade mark infringement, even though the intention is usually the same.

This distinction seems artificial, and may pose problems for businesses seeking to align their SEO and SEM strategies - at least for now, a different approach seems to be required.

How businesses use website metadata and Google AdWords

Given the near-universal familiarity consumers have with Google, businesses often use one or both of the following methods to improve their search rankings in Google:

1. Inserting metatags in the source code of their website. Subject to Google's algorithms, this can sometimes (but not always) result in their website appearing in Google's organic search results in response to a search for those terms. This is often referred to as Search Engine Optimisation or "SEO".
2. Purchasing keywords from Google (known as Google AdWords) which, when matched with the search terms used, can cause an ad for the website to be displayed above Google's organic search results. This is often referred to as Search Engine Marketing or "SEM".

In following either of the above methods, businesses sometimes use a competitor's trade mark as a metatag within the source code of the website or as a Google AdWord, in order to attract Google users that may be interested in goods or services associated with that trade mark.

Is this conduct lawful?

Back in 2016, the Federal Court held that the mere purchase and use of a registered trade mark as a Google AdWord was not "use" of a trade mark, which is required to establish trade mark infringement under the Trade Marks Act (see Veda Advantage Ltd v Malouf Group Enterprises Pty Ltd [2016] FCA 255). That was essentially because Google AdWords were said to be "invisible to consumers". This finding was made even though, as recognised by the Court, this use of trade marks enables an unauthorised user to benefit from a competitor's goodwill in the registered trade mark in question.

By contrast, the Full Federal Court has recently confirmed that the use of another party's registered trade mark in the source code of a website can amount to trade mark infringement. This is despite the fact that - like Google AdWords - a website's source code is not ordinarily visible when a website is viewed by the consumer and can only be viewed by performing particular functions in an internet browser.

The Accor decision: trade mark use in source code can constitute infringement

In Accor Australia & New Zealand Hospitality Pty Ltd v Liv Pty Ltd [2017] FCAFC 56, Accor sued a website operator for, among other things, infringing its HARBOUR LIGHTS registered trade mark by including that trade mark in the source code of one of the operator's websites. Relevantly, the Full Federal Court affirmed that:

• including trade marks in a website's source code could be considered "use" of a trade mark, in the infringing sense required by the Trade Marks Act, because the source code "was visible to those who know what to look for…and influenced search results"; and
• in this case, the use of the relevant (HARBOUR LIGHTS) trade mark in the website source code infringed Accor's registration because the website was promoting services for which the trade mark was registered, and because the particular metatag containing the trade mark was not using the trade mark in a descriptive sense.

Isn't this distinction a little artificial?

The Accor decision serves as a warning sign to businesses intending to use their competitors' registered trade marks in website source code. This conduct can constitute trade mark infringement, even though that metadata is not visible to an ordinary internet user and can only be viewed by performing functions normally reserved for the tech boffin.

By contrast, it seems that the mere purchase and use of a competitor's trade mark as a Google AdWord (in and of itself) will not amount to trade mark infringement. The apparent rationale for this is that Google AdWords are invisible to consumers and therefore cannot function as a "badge of origin", as is required to establish trade mark infringement.

With respect to the courts which delivered the decisions in Accor and Veda, which were simply deciding those cases on the facts before them, this distinction seems artificial. In each case:

• the registered trade mark is being used to attract the attention of consumers searching for a competitor's goods or services; and
• the trade mark is essentially invisible to the consumer who is merely interested in finding the best price for their favourite bottle of wine, and couldn't think of anything less interesting than inspecting the source code of the relevant website.

It therefore seems illogical that one form of conduct should be unlawful, and the other perfectly permissible, when the intention and practical effect of each form of conduct is the same.

Just how the courts (both in Australia and overseas) approach these issues going forward will be very interesting indeed. In the interim, however, the position appears to be that:

• a competitor may purchase and use another party's registered trade mark as a Google AdWord, no matter how distinctive it is, and avoid liability for trade mark infringement unless accompanied by other conduct (eg. using the trade mark in the Google Ad itself or on the linked website);

BUT

• a competitor can be found liable for trade mark infringement if it uses another party's registered trade mark within website source code unless it can establish a defence, the trade mark is being used in a descriptive sense or it can otherwise show that it has not used the trade mark "as a trade mark".

This article was first published in the Internet Law Bulletin, May 2017.

What are metatags, and where can I find them?

Metatags form part of the source code of any website and serve to describe the content of the website. They can generally be viewed by right-clicking on a webpage and selecting "view page source" (or similar) in your internet browser. The example metadata extracted below is taken from the source code of the website discussed in this article:

<meta name="keywords" content="harbour lights, cairns apartments, waterfront, luxury apartment, harbour side, self contained, cairns city apartment, trinity inlet">

<meta name="description" content="Harbour Lights Apartments in Cairns offer luxury private waterfront apartment accommodation for holiday letting and short term rental.">