Using AdWords: Legal Implications for eCommerce Businesses 

When you run your eCommerce business, one of the critical areas you will need to work on is marketing your brand. This includes advertising to ensure that you maximise customers for your business and increase your website traffic. There are many different ways to advertise your company, which can depend on your daily budget, and as you are an online brand, one potentially successful way to do this is through Google AdWords using specific keywords. However, when your business does online advertising to gain potential customers, including Google ads, it must comply with laws in this area. This article will, therefore, explain about using AdWords and some of the potential legal implications for eCommerce businesses when doing so.

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What are Adwords?

Adwords is an advertising system by Google which uses its search engine and partner sites to assist businesses like yours in targeting markets it wishes. If your eCommerce business decides to create an AdWord in Google, you will choose various relevant keywords to attach to the AdWord.  These keywords are words which will bring up your AdWord when Google users type them into Google.        

When you create an AdWord, it appears on these partner site’s pages, and Google users will find it when they type in your keywords.  However, some keywords can be registered as trademarks, which could create legal implications for your business.

What is a Trademark?

A trademark is a form of intellectual property (IP). Many businesses, including eCommerce businesses like yours, often own trademarks. It shows that you clearly own your goods or services and can help identify you as your eCommerce brand. When you or another business owns a trademark, only that business can usually use it. Trademarks are unique and can include, for example:

• names;
• words; 
• patterns;
• logos;
• colours; and 
• shapes. 

Keywords may also be trademarks, and this is allowed in the UK. Other countries also allow this, such as:

• Australia;
• New Zealand;
• the USA; and 
• Canada.

You can use a trademarked keyword when the trademark owner allows it. If you use it where I have not, the trademark owner must authorise it using a Google authorisation form. Therefore, Google can allow you to use these trademarked terms even if the trademark owner does not want you to. However, Google may block you from using some trademarked words. This can occur when the trademark owner has complained about using the trademarked term. 

What is Trademark Bidding?

Trademark bidding is where you use a trademark keyword in your AdWords, and other businesses, such as an eCommerce company, do the same with those keywords. Therefore, you pay more if you want your AdWord higher in the Google search results. Although this does not increase the likelihood of you infringing any trademarks, what your AdWord implies when using this trademark could constitute trademark infringement. 

For example, suppose you use a trademark in your keywords in an AdWord to ensure traffic is diverted away from the trademark owner’s website. In that case, this is likely to be trademark infringement. 

Courts prefer to let companies be competitive rather than protect the trademark owner’s intellectual property rights. However, there are two general rules to comply with, which will help protect you against being guilty of trademark infringement. These are:

• ensuring that the trade term you use is on the web page your eCommerce business Adword takes a Google user to; and
• you are not in competition with the trademark owner, although providing additional values is encouraged. 

Key Takeaways

Creating AdWords is one way your eCommerce business can effectively advertise your goods or services. This is where you choose keywords, which, when a Google user types these in, leads them to an advert for your eCommerce brand. This appears on Google partner sites. The keywords you choose for your AdWord may be trademark terms. This is allowed in the UK. A trademark is a form of intellectual property (IP), such as a logo or a colour that identifies a business and is unique to it. Trademark bidding is where you pay more to use a keyword in your AdWords as others are using it too to ensure you rank higher in search results. 

Although keywords can be trademarks and trademark bidding is allowed you need to ensure you use them correctly so it does not constitute trademark infringement. For example, trademark infringement can occur if you use the trademarked term to prevent traffic from the trademark owner’s site. 

If you need help understanding how to use Adwords and some of the legal implications for eCommerce businesses, our experienced eCommerce lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.

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