Latching onto the competition with Google Adwords?

Many entrepreneurs are shocked when they find out that their immediate competitor advertises in their name with Google Adwords to attract their clients. Is this even allowed? The Court of The Hague ruled on this recently and immediately prohibited this method. Attorney Hidde Reitsma explains.

Advertising on Google

In this case Boxaround rented out physical storage space and advertised this service on the internet. To enhance its name recognition, Boxaround engaged a third party. This party started advertising on Google and used the name of the immediate competitor of Boxaround, i.e. City Box.

Prohibition on using the name of the competitor

This meant that if clients were looking on Google for the name ‘Citybox’ or ‘City Box’ the Boxaround business was at the top of the search results. After City Box found this out, they wrote a demand letter, stating that Boxaround should refrain from using the trade names and trademark names of City Box in Google Adwords, among others by using keyword advertising.

‘Profiting’ from another party’s name is allowed

First of all, profiting from the name of a competitor, without infringing on an absolute intellectual property right, is not automatically unlawful, even if this profit disadvantages another business.

The indicator is confusion with the public

However, it should be clear from which party has actually placed the advertisement on Google Adwords, so there is no public confusion. If there is public confusion, this could mean an infringement, and such an infringement should cease immediately and possible damage compensated.

Boxaround has to compensate the damage suffered by City Box

Because Boxaround latched on immediately to the City Box brands, the Court of The Hague ruled as follows. If the holder of an exclusive right, such as a trademark right, has an interest in being granted a prohibition with ancillary claims if there is an infringement or the threat of an infringement of his rights, this should be granted. The Court of The Hague assumed that there was confusion and Boxaround has to compensate the damage suffered by City Box.

It does not matter that a third party made the mistake

The court also finds that the fact that Boxaround did not intentionally infringe on the trademark right because they had engaged another party, is irrelevant. Boxaround was the client and should therefore be held liable as such. Apart from the ruling that Boxaround should immediately cease infringement of the trademark, they were also sentenced to pay all legal costs, based on article 1019h of the Code of Civil Procedure.