Keyword Purchase and Trademark Law

Whether one can "buy" a third party's trademark as a keyword for Google Adwords (R) is a controversial topic in the trademark law. Let me give you a context. You have an aunt, Aunt Terry who makes great apple pies. You start a shop "Aunt Terry's Apple Pies" and it is successful. But one day, when you googled "Aunt Terry," "Uncle Sam's Apple Pies - Best in Town" appeared! Apparently, many people who searched for Aunt Terry's Apple Pies were attracted by this ad and went to Uncle Sam's shop instead of yours. I believe it is natural at least from your perspective that you would want to stop it. However, in Japan, one court said "OK" to Uncle Sam, at least when the advertisement itself does not use your trademark. Saido v. Onrado, Osaka District Court on September 13, 2007 (unreported).

This is a battle between healthy food sellers. The plaintiff registered a trademark for "CaricaCelapi," which is a healthy product made from papaya. The defendant bought the keyword "CaricaCelapi" from Yahoo Japan and whenever a user inputs "CaricaCelapi" to search, the defendant's advertisement is shown, indicating that the defendant sells healthy food made of papaya. The plaintiff sued the defendant for trademark infringement. The court denied, finding that defendant's advertisement does not constitute a "usage" of the plaintiff's trademark.

There are three important points. First, Japanese Trademark Law lists eight categories of "usage." Article 2(3). The most relevant is putting the trademark on an advertisement. Article 2(3)(viii). The court seems to believe that as the trademark itself is not included in the defendant's advertisement, the plaintiff's trademark is not "on" the defendant's advertisement and therefore there is no infringement.

Second, the plaintiff is apparently not good at arguing this line of argument. The court mentioned that there is no explanation from the plaintiff why the keyword purchase is "usage."

Third, the court ruled nothing about the cases where the keyword is actually displayed within the advertisement. For example, if Uncle Sam advertises "Pay Less for Aunt Terry's Apple Pies!" that might constitute an infringement.

As this is just a lower court case, it is difficult to assess how persuasive this opinion is. However, if a trademark owner wants to win, she should persuade the court that the purchase of her trademark as a keyword somehow constitutes "usage."

DISCLAIMER: "IT Law issues in Japan" only provides general information about Japanese information technology law and does not, under any circumstances, constitute legal advice. You should first obtain the advice of professional legal counsel who is qualified in Japan before acting or refraining from acting based on this blog.