Abuse of Internet keywords in Competitive Bidding may Constitute Trademark Infringement

(By Luo Yanjie) Abstract: Using another’s trademark as a promotion keyword in Baidu’s competitive bidding may constitute trademark infringement and unfair competition. The contents of “sale promotion (for others)” refer to providing advice, planning, promotion and consulting for others to sell goods or services, and does not include, in particular, enterprises whose main function is to sell goods, namely, activities of commercial enterprise.

   With the widespread use of Pay Per Click (the “PPC”) promotion, related legal problems also surface. In recent years, there are many trademark infringements regarding the bidding service of keyword PPC. The case in today’s post is a typical one considering the bidding service of keyword PPC as follows.

     Introduction to the Case:

     Plaintiff: Dongguan Guoan Ticket Affairs limited Company (the “Guoan Tickets Company”)

     Defendant: Shanghai Ctrip.com International Ltd. (the “CTRP”)

     Court of First Instance: Shanghai No.1 Intermediate People’s Court  No: (2012)沪一中民五(知)初字第181号

     Court of Second Instance: Shanghai Higher People’s Court  No: (2013)沪高民三(知)终字第59号

  The plaintiff, an agent company providing services of train tickets, bus tickets and international flights, owns the “国安”(pronounced “Guoan”) trademark (the “disputed trademark”) under the Class 35 (not including hotel reservation) for sales promotion (for others) and under the Class 39 for sightseeing (tourism), travel reservation, tours (arranging of-) and tourist offices (except for hotel reservation). The plaintiff found out that, when inputting “国安票务” (pronounced “Guoan Piaowu” and referred to “Guoan Ticket Affairs”) as a keyword in Baidu.com and making a search, the second result of searching was that “国安票务,订机票,就上携程网www.ctrip.com国安票务:携程官网查询及预订机票,使用超方便,买就送积分,可免费兑换机票及丰富礼品” in Chinese, which in English refers to “国安票务: booking flight tickets goes to ctrip.com” and “国安票务:Searching and booking tickets on ctrip.com is very convenient, and buying tickets on ctrip.com will bestow integrals that may redeem the free tickets and rich gifts”, and when clicking the second search result, it goes into the defendant’s official website www.ctrip.com. After found out these, the plaintiff brought a lawsuit against the defendant to the court.

This case was heard by two courts and ended up with that:

1. The accused defendant’s infringing act on Baidu.com belongs to the keywords’ referral links, which constitutes the use of trademarks as regulated in the Trademark Law. However, the service of Class 35 does not contained enterprises’ activities whose major function is to provide flight tickets, but the accused acts are fundamentally the same as the service objects and purposes of Class 39. Therefore, the defendant constituted an infringement of the disputed trademark under the Class 39 against the plaintiff.

2. As a competitor, the defendant shall have a good understanding of the plaintiff and have known the plaintiff holding the keyword “国安票务” but still use the keyword “国安票务” in its ads promotion. Such acts of the defendant constituted unfair competition because the accused acts are easily made relevant internet users into connections of the defendant and the disputed trademark and further created confusion.

In conclusion, the court decided that the defendant constituted an infringement.

Lawyers’ Comment:

  1. The use of another’s trademark as a promotion keyword in Baidu’s competitive bidding may constitute trademark infringement and unfair competition.

Pursuant to the Trademark Law, using a trademark in connection with the same or similar goods or services shall constitute a trademark infringement. Pursuant to the Implementing Regulations of the Trademark Law, the use of trademarks refers to the affixation of trademarks to commodities, commodity packaging or containers as well as commodity exchange documents or using trademarks in advertisements, exhibitions and for other commercial activities. With regard to whether Baidu promotion, a new product in internet field, shall constitute an infringement in the above scope, there is no concrete regulation. The judgment of this case contained by the court gave us a positive answer that:

The virtually effect of Baidu Promotion, which displays the information of the promoting website in a specific location on related pages of the Baidu.com, is that the advertisers utilize Baidu to do promotion and publicity with an obviously legal nature of commercial ads. Therefore, the court decided that the act of using the keyword “国安” in defendant’s commercial ads shall constitute the use of a trademark as regulated in the Trademark Law. Correspondingly, the objective effect of such use of a trademark leads to consumers’ confusion about the right holder of the disputed trademark and the advertiser, thus naturally constituting unfair competition.

  1. What is the “sales promotion(for others)” in the Class 35 of the Classification of Similar Goods and Services

In this case, except for legal issues related to “Baidu Promotion” in the preceding paragraph, another focus also catches our attention, i.e., the court decision that the business scope of the defendant acting the role as an agency company for flight tickets does not constitute the sales promotion (for others) in the Class 35 of the Classification of Similar Goods and Services. It is counterproductive to our literal comprehension on “sales promotion (for others)”. Actually, the decision contained by the court had a legal basis.

The Reply of the Trademark Office of the State Administration for Industry and Commerce to the Issue of Whether Shopping Mall and Supermarket Services are Included in Class 35 has clearly stated the contents of “sale promotion (for others)” refer to providing advice, planning, promotion and consulting for others to sell goods or services, and does not include, in particular, enterprises whose main function is to sell goods, namely, activities of commercial enterprise.

Therefore, the above-mentioned decision of the court is correct. What a pity is that whatever the Classification of Similar Goods and Services or relevant rely of the Trademark Office do not clear state what kinds of classification the enterprises of shopping mall and supermarket are. Therefore, currently, almost all supermarket enterprises take protection through trademark registration on different classifications.

 

Lawyer Contacts

You Yunting86-21-52134918  youyunting@debund.com/yytbest@gmail.com

Disclaimer of Bridge IP Law Commentary


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