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Can you use a competitor’s brand name as your Google Adword? There is an answer to this oft-asked question and, as one would expect from a legal standpoint, it’s: “Yes, but…”

The Supreme Court of Appeal recently had to decide whether M-Systems Group’s use of its rival’s trademark ClearVu amounted to passing off. Cochrane Steel Products, the proprietor of the ClearVu mark, had traded in high-density mesh fences under its brand since 2008. At the time of instituting proceedings though, it did not have registered trademarks. It accordingly relied on the common law remedy of passing off.

To succeed, it had to show that it had a reputation in the mark ClearVu, and that M-Systems’ use of ClearVu as an Adword would be likely to cause confusion about whether the parties or their goods were related, or came from a common source.

Although Cochrane ticked the reputation box, it fell short in demonstrating that consumers were likely to be confused. The court found that we’re a savvy bunch of Internet users, and that when confronted with Internet search results, we’re used to “separating the wheat from the chaff”. Doing so is an easy exercise as the advertisements are clearly indicated and often positioned on another part of the screen. Even in the event of an unlikely foray onto an advertiser’s page, a consumer would quickly be able to spot their blunder. For those reasons, the court saw no likelihood of confusion arising.

So, where does the “but” come in? Well, Cochrane didn’t rely on a registered trademark so theoretically the question remains as to whether use of a registered trademark as an Adword would infringe. Given that the crux of the decision was that consumers would not be confused, it’s unlikely that having a registered mark would assist. The court would probably find that Adword use of such a mark does not affect the function of a trademark, which is to serve as a source indicator.

There is potentially scope for a trump card though, being a well-known registered trademark. In that instance, the test is whether use of the identical or similar mark is likely to take unfair advantage of, or to tarnish the reputation of, the well-known mark. It does not matter whether or not confusion will arise.

So, a potential loophole for rights holders? Quite possibly.


ABOUT ADAMS ON AFRICA | ISSUE 1

This article is part of a new quarterly digital publication, Adams on Africa. The publication aims to provide you with the necessary information and updates on developments in business and the law in Africa. We welcome your feedback. Articles in this issue:

A NEW CONVERSATION ON AFRICA

AFRICA REGIONAL REPORT

CHAPTER 9: THE POWERS OF THE PUBLIC PROTECTOR

DISSECTING THE NEW IP CONSULTATIVE FRAMEWORK

HOW OIL PRICES IMPACT AFRICA

ADDLED BY THE INTERWEBS

AFRICA’S LEADING LADIES

BANKING ON THE MAPUTO CORRIDOR

TOURISM – A MARKET OF OPPORTUNITIES

PHILANTHROPY’S PURPLE RAIN

PURE WATER ON TAP