The long-running legal battle between InterCity and Nakedbus has finally been settled by both parties, a week before a Court of Appeals hearing. Terms of the settlement have not been disclosed.
InterCity alleged trademark infringement in that a Google AdWords campaign by Nakedbus not only bid on InterCity brand terms but also included the term “inter city” in the Nakedbus ads triggered by these terms.
An Auckland High Court ruled in favour of InterCity last year, finding that Nakedbus was attempting to mislead searchers into thinking the company was associated with InterCity.
Justice Raynor Asher ruled that usage of the term “inter city” in ad text was likely to deceive or confuse consumers, and a breach of the Fair Trading Act 1986. However, he did not agree that use of the brand name as a keyword constituted trademark infringement.
Why should you care?
Two years ago Google changed AdWords trademark policies for advertisers targeting this market, no longer preventing advertisers from bidding on another’s trademarks as keywords. Some hoped the Court of Appeal’s ruling on the InterCity vs Nakedbus case would decide the lawfulness of bidding on another company’s trademarks, but legitimacy now remains an open question.
Advertisers who opt to bid on a competitor’s trademarks should do so advisedly. Of course, lesser known brands can benefit when their ads are shown for better known competitors. However, the increased competition for brand terms inevitably results in higher Cost per Click prices and often the only real beneficiaries are the search engines.
If you found this useful, please tell your friends.