Is it possible, as part of a sponsored link advertisement in search engines (such as “Google”) to use the competitor’s name as a “keyword”? Recently, the District Court has overruled the decision made by the Magistrates Court on the matter, and determined that the answer is positive.
Background
The virtual world poses new questions and challenges to commercial companies as well as the courts. The internet raises questions such as should the same rules and norms that we have known thus far in the physical, “pre-virtual” world, apply to the virtual realm. In the following article we shall present a classic example for an instance in which the court makes an inference between the two worlds, and chooses to apply the same rules and norms in the virtual realm as well, and in this case – to advertising on the internet.
The case facts and the decision made by the Magistrates Court
The company “Proportion” and Dr. Dov Klein are two familiar players in the arena of plastic surgery in Israel. In this case, “Proportion” has purchased the search words “Dr. Klein” (with its various conjugations) as keywords in “Google”, so that typing the name “Dr. Klein” led to a sponsored advertisement by “Proportion”, who is the competing company. As a result, Dr. Klein sued both “Proportion” and “Google” (with its subsidiaries) – and was compensated.
The Magistrates Court[1] ruled in the favor of Dr. Klein, explaining that it has viewed the aforementioned circumstances as a breach of Basic Law: Human Dignity and Liberty, and a breach of the provision of the Privacy Law, 1981. Namely, the court has decided not to deal with the issues concerned with breaching intellectual property on the internet, but rather to stay in the realm regarding the use of a person’s name. The problem in this verdict concerns the fact that as opposed to the Dr. Klein case, in cases where the business name is not a person’s name (for example, “American Laser”), there is allegedly no hindrance to use the business name by competitors.
In this regard, it is interesting to note that in a recently published article on this website[2], we have voiced our opinion that the verdict’s explanations lead to problematic results and even to an anomaly, by giving an advantage to a business which has a person’s name, over a business which does not have a person’s name. And indeed, both “Proportion” and “Google” have decided to appeal the results of the Magistrate Court verdict before the District Court.
The discussion in the District Court
The District Court (Honorable Justice Ginat) has chosen to mention the known verdict in the matter of “Matim-Li”[3], in which using a keyword, even if that is already the competitor’s trademark, was deemed appropriate for use. Justice Ginat wonders why the “Matim-Li” ruling was not applied in this case, inasmuch as, even if the matter is a person’s name, this name is his trademark, and so it should be considered. Justice Ginat also noted that even within the comparative law, the majority supports this stance.
Justice Ginat makes an inference between the virtual world and the “pre-virtual” commercial life, and reaches a conclusion according to which it is possible to compare the circumstances of the case before him to those of a case where a person opens a competing business near to an already existing business in the same area, and its success is in fact due to the first business’s investment – and sees no wrong in that. Indeed, states the Justice, “Proportion’s” sponsored link is not misleading, does not include the plaintiff’s name, and does not give any information about him. Therefore, the Justice reaches the conclusion that Dr. Klein is not entitled to prevent purchasing his name as a keyword.
Summary and conclusions
The aforementioned decision by the District Court in fact restores the order by reconfirming the ruling made by the same court in the “Matim-Li” case[4], and clarifies that there should not be a distinction and granting an advantage to a business that has a person’s name over a business that does not have a person’s name. Thus, in our opinion, this decision contributes to the legal certainty and the ruling which incorporates commercial fairness and logic.