Advertising words in Google have stirred up recent controversy as companies use similar techniques to gain an edge on competitors. Courts have given mixed rulings so far in cases involving such brands as Geico, Zocor and Edina Realty.
In the Yahoo! case, JP Enterprises says that Yahoo!, HDVE LLC, Spark Networks and Insight Direct USA are guilty of trade mark dilution and infringement. It claims that anyone typing "www.lovecity.com", "lovecity" or "lovecity.com" into the search engine is presented with adverts on the side of the page detailing the services of the named competing companies.
"Defendants' wilful insertion of plaintiff's trademark into paid advertisements constitutes an effort to artificially inflate their profits by knowingly misleading consumers as to the source of the response to their search," said the lawsuit. "It has caused, and continues to cause, actual confusion, is tarnishing the goodwill of Plaintiff and is causing lost sales to Plaintiff."
The case will not be a simple one, since courts have conflicted in recent cases over how to deal with the use of other people's trade marks in advertising. The case will centre on what exactly constitutes commercial use of a trade mark.
"It must be remembered that both under US and UK trade mark laws, a brand must be used in commerce to be deemed to infringe a trade mark registration," said Lee Curtis, a trade mark attorney at Pinsent Masons, the law firm behind OUT-LAW.COM. "Some commentators argue that the use of a brand invisibly in an adword is not use in commerce. However, in the US, courts have tended to view the use of brands in adwords as use in commerce."
Also crucial will be the content of the advert itself. "Whether JP Enterprises succeeds in its suit will very much depend on whether the court finds that the use of its 'Lovecity' brand as part of the adwords concerned is indeed trade mark use, and whether the 'lovecity' brand is visible in the adverts triggered by the adword or on the websites which link to the adverts," said Curtis.
In the US in two important cases, involving Geico and Edina Realty, the courts found that use of the words did constitute trade mark use because it did count as "use in commerce". Another recent US case disagreed, when the use of Merck's Zocor brand was deemed not a "use in commerce".
"Both the US and UK courts have tended to find that if the alleged infringer does not use the brand concerned visibly in the text of the advert triggered by the adword nor on the website which links to the advert, then infringement will not be found," said Curtis.