While the US Courts have ruled that bidding on a competitor’s trademark does not violate their trademark, it seems that the European Courts have taken a completely different stance that could affect affiliates attempting to break into the European market.
In a judgement in a case, between Inflora and Marks&Spencer, ruled by the EC (European Court), the court ruled that the use of a competitor’s trademark as a search keyword might actually adversely affect a trademark as it could in fact interfere with a brands reputation and its ability to retain customers.
The court however did say that the practice would be allowed when the advertisement shown, “puts forward an alternative to the goods or services of the proprietor of the trade mark with a reputation – without offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution of the trade mark or detriment to its repute (tarnishment) and without, moreover, adversely affecting the functions of the trade mark.”
This of course does not affect US trademark bidding practices, since the a California Appeals Court ruled in March 2011, that buying ads on a competitor’s name isn’t a violation of trademark law.
