24 November 2016

Plumb is the keyword: a fruity search advertising dispute

Buying a bath can be a confusing experience at the best of times. This isn't helped by the fact there are 2 bathroom retailers with very similar names: Victorian Plumbing and Victoria Plum, who have been co-existing since 2001.

To confuse things even further, towards the end of 2012 Victorian Plumbing started bidding heavily on the keywords "Victoria Plum" and "Victoria Plumb" as part of its search advertising campaign. As a result, users searching for "Victoria Plum(b)" were presented with ads linked to Victorian Plumbing's website, and which variously contained the words "Victorian Plumbing", "Victora Plum(b)", "Victoria Plumbing" and "Victorian Plumb".

"Victoria Plumb" and "VictoriaPlum.com" are registered trade marks of Victoria Plum, who took issue with Victorian Plumbing's online activities and sued for trade mark infringement.

Meanwhile, for several years from 2011, Victoria Plum had been bidding on "Victorian Plumbing" as a keyword: not a registered trade mark of Victorian Plumbing but nevertheless a name in which it claimed goodwill. Victorian Plumbing took issue with Victoria Plum's online activities and counterclaimed for passing off.

The High Court has now ruled that Victorian Plumbing's use of keywords did infringe Victoria Plum's marks. The established test for the Court to consider was:
"whether the advertisement does not enable normally informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to in the advertisement originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party".
And what the expert evidence of clickthrough rates showed, according to the judge, was that consumers were clicking on Victoria Plum's ads in the mistaken belief they would be taken to Victoria Plum, rather than Victorian Plumbing.

In its defence, Victorian Plumbing argued that it was using the same or similar names to Victoria Plum honestly, and that given the long period of co-existence between the two companies, the inevitable confusion arising from its use of the keywords should be tolerated at law (so-called "honest concurrent use").  

But the Court rejected the defence, and held that the significant increase in keyword bidding by Victorian Plumbing was bound to exacerbate the level of confusion beyond what was inevitable.

The tables were turned, however, when the Court came to consider Victoria Plum's use of "Victorian Plumbing" as a keyword. The judge considered there was nothing in the advertisements to indicate the absence of a connection between the parties, and that there was a propensity for confusion leading to a likelihood of confusion. The counterclaim for passing off was upheld.

Subject to any appeal, while both Victoria Plum and Victorian Plumbing must cease bidding on each other's keywords, they will have to continue to accept a certain degree of confusion among consumers arising from their use of the same or similar names.

There are wider lessons here for other businesses who might wish to rebrand at an early stage rather than attempt co-existence with similarly named competitors, and the risk of future confusion and skirmishes that may entail.

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