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InterCity Group (NZ) Limited v Nakedbus NZ Limited

(2014 NZHC 124; 12th February 2014)

In InterCity Group (NZ) Limited v Nakedbus NZ Limited the High Court issued its first substantive decision regarding the use of another parties trade mark as a Google Adword.
Google Adwords allow advertisers to have their adverts displayed in response to keywords used by users of Google’s various search engines. The keywords do not need to feature in the resulting advert in order to be used. In the current case Nakedbus was found to have used ‘inter city’ as a Google Adword. However, the Court held that such use would not be likely to be taken as use as a trade mark. In particular, the Judge considered that the use of ‘inter city’ as Google Adwords was ‘invisible’ to the user. Insofar as the use of the keyword was an act that was not seen or known or understood by the consumer, there was no use of the sign “likely to be taken as being used as a trade mark”. Consequently, Nakedbus’s use as a Google Adword of an identical or essentially identical mark to InterCity’s trade mark registration was held to not amount to trade mark infringement. However, it is noteable that the Judge diverges from European decisions which attribute normally informed and reasonably attentive internet users with an understanding of how Google uses keywords to trigger advertisements.
However, Nakedbus also made use of inter city in the resulting adverts, with statements such as “inter city buses from $1 – We'll beat any inter city fare”. The Court considered such statements to be ambiguous as consumers were likely to believe they were InterCity advertisements or were otherwise connected to InterCity. Consequently, despite the descriptive nature of the mark in relation to transportation services, the Judge held that NakedBus had infringed InterCity’s trade mark registration. The Judge also considered that the Nakedbus Google adverts were misleading and deceptive under the Fair Trading Act 1986 and also amounted to passing off.