Trade mark infringement in online advertising

Posted by Ella Biggs and Kylie Diwell

Companies advertising using Google's Adwords service need to consider whether they might be infringing the registered trade marks of their competitors.

Google's Adwords service allows advertisers to purchase 'keywords' which, when entered into the Google search bar by an internet user, direct the types of search results that are returned (for example, the 'sponsored links' that appear on a Google Results page).

In Australia, the use of a trade marked term as a keyword in the context of online advertising may constitute trade mark infringement where the use is combined with a clear representation of the common origin of the goods or services. A recent decision in the United Kingdom goes further than this, finding that the use of a registered trade mark as a keyword is itself sufficient for trade mark infringement. This may have an effect on the development of the law in Australia, and this issue should be treated with caution by advertisers.

Google's Adwords policy and trade marks

On 23 April 2013, Google changed its Adwords policy in Australia relating to the ability to purchase keywords that are the subject of a registered trade mark.[1] This change also affected China, Hong Kong, Macau, Taiwan, New Zealand, South Korea and Brazil. The same change in Google's Adwords policy was announced in the UK and Ireland in May 2008.

Before this change, Google's Adwords service allowed trade mark owners to lodge a complaint with Google where their registered trade mark had been used by a competitor, which triggered an internal review process by Google. In cases where trade marked terms had been used as keywords, the infringing advertisement was removed by Google. Following the change in its policy, Google will no longer prevent advertisers from purchasing and using trade marked terms as a keyword. Without Google restricting and monitoring the use of trade mark terms in this way, a claim of trade mark infringement against the advertiser is the avenue through which trade mark owners can now stop the use of their trade marks as keywords.

Establishing trade mark infringement in online advertising

In Australia, it does not appear that purchasing and using a keyword that is the subject of a registered trade mark would fall within 'use as a trade mark' for the purposes of establishing infringement under section 120 of the Trade Marks Act 1995 (Cth) (the Act). In Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd it was found that the use of a trade marked term as a meta tag was not sufficient, on its own, to constitute 'use' for the purposes of establishing trade mark infringement.[2] However, it appears that the use of trade marked terms as keywords, when combined with clear representations of similar origin of the goods or services (for example, as a banner on a website), will be sufficient for establishing infringement under the Act.[3] With Google no longer monitoring the use of trade marked terms in online advertising, the courts will have greater scope to hear disputes and influence the development of the law in this area.

A recent decision in the United Kingdom relates to an action brought against an advertiser following Google changing its Adwords policy there in 2008. In Marks & Spencer v Interflora [2013] EWHC 1291 (Ch), the High Court found that Marks & Spencer's (M&S) use of Interflora's trade mark as a Google keyword was an infringement of Interflora's trade mark. This case marks a significant development of the law in this area and, given that Google has just changed its policy regarding the use of trade marked terms as keywords in Australia, this case may have repercussions for advertising practices here.

Significant development in the UK: Marks & Spencer v Interflora

Following the announcement of change to Google's policy regarding keywords in the UK, M&S made a considered commercial decision to purchase Interflora-related keywords on Google for the purpose of diverting internet users to its own website. Interflora argued that this conduct infringed its registered trade marks.

In finding that the conduct of M&S had infringed Interflora's trade mark, Justice Arnold of the High Court (heavily influenced by statements from the European Court of Justice, where the case had been referred following its initial hearing in the UK), repeatedly stated that the use of a trade marked term as a keyword in online advertising was not conduct that was inevitably and inherently objectionable from a trade mark perspective. However, certain factors were relevant to the finding that M&S's conduct had infringed Interflora's trade marks. In particular, the following factors were significant:

• the nature of Interflora's business model. Justice Arnold discussed the uniqueness of Interflora's business model as being a significant factor in his decision. In particular, that Interflora's brand and business model is based around providing a network for florists in geographically dispersed areas made it more likely that consumers would be confused as to whether the advertised goods originated from Interflora or M&S. That an internet user would be likely to assume a connection or affiliation between Interflora and M&S Spencer by having an M&S advertisement appear as a Google search result for 'Interflora' was a determinative factor in this regard.
• the relevant consumer. In determining the effect of M&S's advertising, the relevant perspective was that of 'the reasonably well-informed and reasonably observant internet user', initially as at 6 May 2008. This user was considered not to understand the difference between organic and advertised search results, largely because of the relative lack of internet literacy in 2008. It was found that, even in 2013, a 'significant proportion' of internet users in the UK would not appreciate the difference between a natural search result and a paid advertisement. The onus was then placed on M&S to establish that the use of the Interflora's trademarks would not confuse the consumer (with the characteristics described by the Court). M&S was unable to do this, resulting in a finding of infringement.

Implications for Australia

Although certain factors that were significant to Justice Arnold's decision in Marks & Spencer v Interflora (as described above) may limit the ability of the decision to be applied more generally, the outcome in this case illustrates an important development in trade mark law. It is of particular importance as it is the first case to hear a dispute following the change in Google's Adwords policy internationally. Now that this change has been effected by Google in Australia, the approach of this case may be persuasive to courts here when hearing similar disputes, especially where online advertisers are seeking to take advantage of the change to Google's Adwords policy.

Companies still need to be careful that they don't mislead and deceive consumers in breach of the Competition and Consumer Act 2010 (Cth) by purchasing and using Adwords, irrespective of whether their conduct would amount to trade mark infringement under Australian law. See our analysis here of the High Court's decision in Google Inc v Australian Competition and Consumer Commission [2013] HCA 1, which included a discussion of the obligations on advertisers not to mislead consumers when using Google's Adwords service.

[1] See <https://support.google.com/adwordspolicy/answer/177578?hl=en&rd+1#>.

[2] [2011] FCA 1319 [57]-[62]. 

[3] See, eg, Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) (2010) 183 FCR 450 [13]-[69].

The Centre for International Economics finds that patents involved in gene based technologies are increasingly not isolated human gene sequence patents

Posted by Benita McLennan and Peter Kearney

We are probably all familiar with the opposing arguments in the 'Gene Wars' debate:

• those in favour of gene patenting argue that patents are essential to support high risk and high cost medical discovery and development;
• those against gene patenting claim that gene patents limit the accessibility and inflate the price of medical services.

A number of reports on gene patenting have made reference to the lack of economic analysis and data around gene patents, including:

• the 2004 Australian Law Reform Commission's report, Genes and Ingenuity: Gene patenting and human health; 
• the 2010 Senate Community Affairs References Committee report on Gene Patents; and
• the 2011 report by the Senate Legal and Constitutional Affairs Legislation Committee, Patent Amendment (Human Genes and Biological Materials) Bill 2010.

To address this information gap, IP Australia commissioned The Centre for International Economics (the Centre) to investigate the economics of isolated human gene patents in Australia.  The Centre recently released its final report 'Economic Analysis of the Impact of Isolated Human Gene Patents' (the Report).  A copy of the Report can be accessed here.

 

Key findings

 

The Report focuses primarily on isolated human gene sequence patents, which it defines to mean patents that include at least one claim to an isolated human gene sequence or a fragment of an isolated human gene sequence (as opposed to patents that claim modified gene sequences or only methods for using a gene sequence).

 

One of the key findings of the Report is that isolated human gene patents have, particularly since the completion of the Human Genome Project in 2003, been playing a less significant role in the patent landscape, with more and more patents focusing instead on:

• methods of using isolated gene sequences; and
• not naturally occurring DNA and genetic sequences (ie, sequences created in the laboratory).

In fact, the vast majority of full-length isolated human gene sequence patent applications were filed prior to the completion of the Human Genome Project in 2003.   This is despite the fact that gross business expenditure on research and development in the medical and health sciences sector has tripled over the past ten years, and National Health and Medical Research Council funding for research on human genetics and genomics for large public entities has increased by two and a half times.

 

Other findings of the Report include that:

• approximately $795 million was invested in gene technologies related to human health during 2011-12 (a number that has been increasing over time);
• most of that $795 million is funded by governments (specifically, 79 percent or approximately $628 million);
• analysis suggests that price premiums are paid for patent-related genetic tests;
• quantifiable monetary impacts attributable to isolated human gene sequence patents are small in terms of royalty and fee income related to the patent (specifically, $1.1 million to $2.6 million per annum is estimated to be earned by publicly funded research institutions).

The Report concludes that the real value in patents is their role in incentivising innovation and the public-private partnerships that are needed to bring new human gene based therapeutics and diagnostics to market, and that, reflecting changes in patent activity, increasingly the patents involved are those that are not isolated human gene sequence patents.

 

Comment

 

The Supreme Court of the United Stated recently held in Association for Molecular Pathology v. Myriad Genetics, Inc. that isolated naturally occurring DNA sequences are not patent eligible (see our previous blog post here).

 

In light of the findings of the Report, it may be that this decision (and the outcome of the Full Federal Court appeal in the Australian Myriad Genetics proceedings – see our previous blog post here) will not have a large impact on the biotech industry in the future, as isolated naturally occurring DNA sequences appear to be playing a diminishing role in the patent landscape since the Human Genome Project was completed in 2003.

US Supreme Court finds naturally occurring DNA sequences are not patent eligible

Posted by Mellissa Lai and John Fairbairn

The Supreme Court of the United States today held in Association for Molecular Pathology v. Myriad Genetics, Inc. 569 U.S. (2013) that isolated naturally occurring DNA sequences are not patent eligible. This may have implications for analogous proceedings, which are on foot in Australia.

Australian litigation

The Federal Court of Australia held in February of this year that isolated naturally occurring DNA and RNA are patentable subject matter (see our previous blog post here).   That decision considered Myriad Genetics Inc's (Myriad) Australian patent no. 686004, which relates to a gene associated with human breast and ovarian cancer known as the 'BRCA1' gene.   The decision is the subject of an appeal to the Full Court of the Federal Court.

US Supreme Court decision

Myriad's US patents have also been the subject of litigation, which ultimately resulted in an appeal to the Supreme Court of the United States. In its unanimous decision delivered on 13 June 2013, the Court rejected the argument that isolating a DNA sequence from the rest of the chromosome is patent eligible. As the Court stated:

"To be sure, [Myriad] found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention" at page 12.

However, the Court drew a distinction between naturally occurring DNA and complementary DNA (cDNA) sequences. The DNA of genes in the body contain 'coding' and 'non-coding' regions. The body reads the whole sequence and cuts out the 'non-coding' portions to make a related sequence known as mRNA that the body can then go on to read and make proteins. cDNA can be made in a lab by copying the mRNA back into DNA. Therefore the cDNA contains only the 'coding' regions, as the 'non-coding' portions were cut out earlier in the mRNA. In short, cDNA is something new, created with human effort and is not a 'product of nature'.

The Court held that the BRCA cDNA was patent eligible. The Court commented that in some instances, even cDNA molecules may not be patent eligible if it is indistinguishable from a naturally occurring sequence. This may occur if a DNA sequence is so short that it consists only of 'coding' regions, meaning that the mRNA did not have any work to do in cutting out the 'non-coding regions' resulting in a cDNA sequence that is identical to the naturally occurring DNA sequence.

The Court emphasised what its decision did not represent – that is, it does not consider the patentability of DNA which has been altered in other ways, such as by scientifically altering the naturally occurring nucleotides. It is also important to note that, like the Australian case, it does not consider any other aspect of patentability (eg. novelty, obviousness) and did not consider any methods of analysis of the human genome.

Comment

In relation to the Australian proceedings, with the appeal set to be heard on 7 August 2013, it will be interesting to see if the Federal Court takes a similar approach.

Given the narrow scope of the decision, its implications for the biotech industry is fairly limited.   For Myriad Genetics, while its claims over isolated, naturally occurring DNA sequences are now invalid under US law, it has maintained its exclusive rights over the cDNA sequences.   Consequently, competitors of Myriad may be able to offer genetic testing for the BRCA1 and BRCA2 genes provided the relevant cDNA molecule is not used.