Keywording in Search Engines as Trademark Infringement: Issues Arising from Matim Li v. Crazy Line

Abstract:     
The typical scenario of keywording involves a trilateral structure of legal positions. The mark holder is the party that has trademark rights in the term that is used as a keyword. The search engine is the entity that provides search tools to Internet users, usually for free, helping them to find specific information on the Internet based on search queries entered by users into the search tool. The advertiser enters into contractual relationship with the search engine, while bidding certain keywords that will trigger its advertisement/link if the user enters these words as search terms. The markholder files a legal action against the advertiser, the search engine or both, claiming trademark infringement and/or unfair commercial practice (unfair competition.) Questions of liability may be classified according to the type of defendant and the type of action commenced against it.

In Matim Li v. Crazy Line the district court of Tel Aviv dismissed trademark infringement and unfair competition claims against a defendant that used marks of others to trigger Google AdWords. There, the advertiser used keywords identical to the registered marks and was engaged in offering goods of the same class for which the marks were registered. Yet, the protected marks did not appear as part of the AdWord. The court dismissed trademark infringement claims mainly because such advertising practice was found as not creating likelihood of consumer confusion regarding the source of goods. Further, it was held that the keywording practice did not amount to gaining wrongful advantage based on the reputation of the marks.

This paper takes the Matim Li decision as its point of departure for discussing keywording from a broader perspective in light of recent developments in the United States and Europe.

Keywords: adwords, Google, trademarks, keywording, infringement liability

JEL Classifications: k42

Working Paper Series