20 February 2014

Use of keywords when amounts to commercial communication

Examining damage to origin function, the advertisement function and the investment function of trademark when the word /mark ‘lush’ is used in the site of the online retailer (defendant) though the trademarked products are not sold , the High Court (UK – Chancery Division – Intellectual Property) upheld the claim of infringement.

‘Lush’ was used as an adword. The person using the internet would find among others, links to the site of the defendant and on clicking the same would enter the website of the defendant. Though the products were not sold by the online retailer, competing products were on display. The fact there was no overt message that the particular brand/trademarked product of Lush was not available and a shopper could not ascertain the same ‘without difficulty’ convinced the court to hold against the defendant. Thus, it was not a case of ordinary keyword advertising.

On investment function, the claimant has submitted that it had made a commercial decision not to sell goods through the defendant’s site. Since the defendant was a large online retailer, the consumer would expect goods of the claimant also to be sold by it and use of its mark by the defendant damaged its reputation.

One of the arguments put forth by the defendant as regards presence of the mark ‘Lush’ in its website which was connected to goods of third parties whose goods were sold through its website was that it was only to enable navigation and the site was used merely as online market place. However, the court was of the opinion that since the defendant designed and operated the website so as to maximise sales such display was part of its own commercial communication.

The defendant also used certain internal software which after analysing the behaviour of previous consumers (users) suggested options to the user which would lead them to competing products. For instance, when the user misspelt the word as ‘lsuh’ the option would show competing products or those with lush mark on them. The court ruled that such use of a trademark as a generic indicator of a class of goods damaged the origin function as well as advertising and investment functions. [Lush Limited v. Amazon Co UK & another - [2014] EWHC 181 (Ch)]


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