U.K. High Court Finds Trademark Infringement In Keyword Advertising

A recent decision of the U.K. High Court dealt with the trademark implications of using third party trademarks in keyword advertising, where a business makes an arrangement with a search engine so that a sponsored advertisement appears on the screen of a consumer who has searched for a particular keyword on that search engine. A prominent example of keyword advertising is Google's AdWords program.

The High Court in Cosmetic Warriors Ltd. and Lush Ltd. v. Amazon.co.uk Ltd. and Amazon EU Sarl [2014] EWHC 181 (Ch) found that Amazon infringed the plaintiff Lush's trademark by 1) bidding on the Google keyword "lush" so that consumers who Googled the term would be shown ads with the word Lush for Amazon's website; and 2) operating its internal search engine so that a consumer searching for the term "lush" on Amazon's site would be led to results for Lush that listed similar, competing third party products. Amazon did not sell Lush products on its website.

In finding infringement, the Court found that Amazon used the LUSH mark in the course of trade by bidding on the "lush" keyword and by coordinating the search results on its own website to include the LUSH mark. The Court, having considered Amazon's reputation as a reliable supplier of a wide range of goods, ruled that an average consumer seeing a sponsored ad for "Lush Soap at Amazon.co.uk" would not be able to, without difficulty, ascertain that the goods referred to by the ad were not the goods of or connected with Lush. Similarly, the Court held that a consumer on Amazon's site, when exposed to search results for "Lush" listing similar products, may be led to think that the products originated from Lush.

A third category of Amazon's sponsored ads that were associated with the "lush" keyword but did not specifically display the LUSH mark in the text (e.g., an ad for "Bomb Bath at Amazon.co.uk" when a user searched for "lush cosmetics bath bomb" on Google) were found not to infringe. The Court ruled that an average consumer, being familiar with sponsored links for competing products, would not assume that Amazon was offering for sale Lush products in the absence of any reference to the LUSH mark on the ad itself.

From a Canadian perspective, it is notable that the U.K. High Court found that Amazon used the LUSH mark "in the course of trade" by bidding on the "lush" keyword. This issue of "use" has not yet been addressed by the Canadian courts. Furthermore, the U.K. Court found that confusion...