Is it permissible to use a competitor’s brand name as keywords in Google Ads?

Is it permissible to use a competitor’s brand name as keywords in Google Ads?

The use of competitor brands as keywords in Google AdWords (now Google Ads) campaigns is a digital marketing strategy that generates debate and controversy. Although it may seem like an effective tactic to attract traffic and capture the attention of potential customers, it is essential to understand the legal implications and Google’s policies before implementing it.

This article explores in detail the cases in which the use of these keywords would be permitted and the associated risks, especially potential lawsuits from competitors, in light of recent Supreme Court case law.

In which cases would it be allowed as a keyword?

Using a competitor’s brand as a keyword in Google Ads isn’t completely prohibited, but it is subject to certain conditions and restrictions. The key is to avoid consumer confusion and taking advantage of others’ reputations.
Law 17/2001, of December 7, on Trademarks (BOE-A-2001-23093), is the main legal reference in Spain regarding trademark protection. This law establishes the rights of the owner of a registered trademark and the limitations on its use by third parties.

In Article 34.2, the aforementioned regulation establishes that the owner of a registered trademark has the right to prohibit third parties from using an identical or similar sign in economic traffic for identical or similar products or services, if there is a risk of confusion for the public.

However, the law also recognizes that the use of a competitor’s trademark may be lawful in certain contexts. For example, if the use of the trademark is necessary to communicate the compatibility or characteristics of a product or service, provided it does not cause confusion about the company’s origin.

Risks of competition complaints

Using competitor brands as keywords carries legal and commercial risks that must be carefully considered.

Consumer confusion

One of the main risks is consumer confusion. If the use of a competitor’s trademark in your Google Ads campaigns leads users to mistakenly believe there is a connection between the advertiser and the competitor’s brand, this may be considered a violation of Trademark Law. Confusion can manifest itself in several ways:

• Users may think that your products or services are offered or endorsed by a competing brand.
• Users may assume that your products or services have the same quality or features as those of a competing brand.

Legal actions and supreme court jurisprudence

In this regard, there is significant case law on the matter, such as the ruling of the Civil Section of the Supreme Court dated April 20, 2022, which addresses a case of trademark infringement in the context of Google Ads. In this case, a franchise network was sued by a dental clinic for the unauthorized use of its trademark as a keyword in Google Ads.

To resolve this case, it’s crucial to understand how Google Ads works. As explained in Supreme Court Ruling No. 105/2016, dated February 26, 2016:

“The search engine offers companies a set of keywords that can be chosen automatically. The problem is that some of these keywords may be identical to registered trademarks, or even well-known or renowned brands. Once an advertiser chooses a keyword, they must pay a fee each time an Internet user clicks on the keyword, which acts as a promotional link that redirects them to the advertiser’s website.”

The Supreme Court, relying on the doctrine of the Court of Justice of the European Union (CJEU), concluded that the defendant’s use of the plaintiff’s trademark as a keyword undermined the indicator of the business origin of the services offered. The Court held that the advertising offered did not allow the average Internet user to determine whether the services included in the advertisement came from the trademark owner or a third party.

Some of the possible strategies to mitigate the risk could be:

• Before launching campaigns that use competitor brands as keywords, consult with an intellectual property lawyer.
• Make sure your ad copy isn’t misleading. Clearly state who you are and what you offer, without suggesting any affiliation with a competing brand.
• Keep a close eye on your campaigns and consumer reactions. If you receive any complaints or detect confusion, act quickly to correct the problem.

Letslaw is a law firm specializing in data protection lawyers, Internet law and intellectual property.