A Clearvu On AdWords: An Update

"The degree of consumer care is becoming more heightened as the novelty of the Internet evaporates and online commerce becomes commonplace."

This quote, which comes from a United States ("US") decision, is quoted in the South African Supreme Court of Appeal's ("SCA's") judgment in the so-called "Clearvu case" - Cochrane Steel Products (Pty) Ltd v M-Systems Group (Pty) Ltd and Another (unreported case no. 227/2015, 27 May 2016).

The Clearvu case (which we covered in a previous ENSight) was South Africa's first reported case dealing with whether or not it is unlawful for a company to buy (bid on) the trade mark of a competitor as a keyword or search term, with a view to ensuring that when Internet users search that trade mark, or variations of it, they see the purchasing company's sponsored links or adverts.

Unlike most of the foreign judgments that have been handed down on this issue, the Clearvu case was based on passing-off rather than trade mark infringement. The reason for this was that Cochrane had not yet managed to obtain registration of its trade mark Clearvu, because M-Systems had opposed its application. The claim, therefore, was that, as the Clearvu trade mark was well-established, M-Systems was guilty of passing-off by buying Clearvu (or variations of it) as a keyword. The first court rejected the claim on the basis that there was unlikely to be any confusion.

The SCA considered a number of the foreign trade mark infringement judgments that have been handed down on the issue. The SCA paid particular attention to the United Kingdom decision of Cosmetic Warriors Ltd and another v amazon.co.uk Ltd and another [2014] EWHC 181 (Ch) (10 February 2014) (the "Lush case"), as well as the case of Interflora v Marks and Spencer plc [2009] EWHC 1095 (Ch) (22 May 2009) (the "Interflora case"), which involved Marks and Spencer's use of Interflora as a keyword in respect of its flower delivery service. The SCA said that these decisions emphasise the fact that consumers are familiar with sponsored adverts, that they expect to see the trade mark that they have searched for appear in the advert itself, and that if they do not see the trade mark, they're unlikely to be confused into thinking that there is any connection.

The SCA also referred to US and Canadian judgments in which the courts have made it clear that the nature of the goods and the type of consumer are highly relevant in determining likelihood of confusion.

It also referred to the...