The High Court has recently dismissed a claim brought by the owner of a Community Trade Mark ("CTM") against two UK subsidiaries of the search engine provider Yahoo! Inc, Yahoo! UK and Overture Services, relating to keyword advertising and sponsored search results.

The claimant, Mr Wilson, ran a mobile catering business selling Afro-Caribbean and South-Asian food using the name "Mr Spicy" which he had registered as a CTM in classes 29, 30 and 42 in respect of food, sauces, spices, prepared meals and the provision of food and drink. The defendants run a service whereby advertisers can bid to appear at the top of results lists when specific terms are entered into Yahoo's search engine. Effectively the claimant's issue was that when you typed "Mr Spicy" into Yahoo's search engine, links (and in particular sponsored links) to third party websites appeared.

The defendants' evidence was that the advertisers whose sponsored links appeared, including the likes of Sainsburys, had not purchased the term "Mr Spicy" as a keyword and the links only appeared because matching technology linked the term to advertisers who had bid on related keywords (or phrases containing them) such as "spicy".

The claimant alleged this amounted to infringement under Article 9(1)(a) of the CTM Regulation on the basis that the defendants were using an identical mark in respect of identical goods or services. Mr Justice Morgan did not agree and the defendants were granted summary judgment.

The judge reasoned that, in this instance, the CTM had not been used by the defendants but by the member of the public who entered the phrase "Mr Spicy" into the search engine. The defendants' response to this search request did not amount to use, and even if it did, it was responding to the word "Spicy" and not "Mr Spicy". Reference was also made to the case of Arsenal Football Club plc v Reed as the basis for finding that even if the defendants had used the "Mr Spicy" CTM, such use was not as a trade mark. That case had shown that the claimant could not prohibit the use of the words "Mr Spicy", even when applied to goods identical to those for which the CTM was registered, if that use could not affect his interest as proprietor of the mark having regard to its function as a guarantee of origin.

The judge refused the claimant leave to amend his claim to include an allegation of infringement under Articles 9(1)(b) and 9(1)(c) of the CTM Regulation by concluding that, as in the case of Article 9(1)(a), such a claim required the defendants to have been using the trade mark as a trade mark.

For some time now there has been a debate over the legality of keyword searches and sponsored links triggered by the input of a registered trade mark. This is thought to be the first case in the UK brought against a search engine over such activities, and to that extent appears to clarify the law. While aspects of the decision will no doubt be of some comfort to advertisers, it does not assist brand owners trying to prevent search engines from enabling competitors to divert business by sponsoring keywords including their own registered trade marks (e.g. what if Sainsburys had sponsored links appear when the keyword "Tesco" was searched for?).

However, the decision should also be treated with an element of caution for various reasons. Notwithstanding the fact that the claimant represented himself, it appears he did not deal with certain specific arguments put forward by Yahoo's counsel which no doubt influenced Mr Justice Morgan, who is not a specialist intellectual property judge. No doubt the issue of sponsored links will be raised again and this subject is explored further in the next Rights Newsletter. If you do not receive this and would like to, let us know.