Will purchasing keyword advertising constitute an illegal act under Article 25 of the Fair Trade Act?

03/28/2024

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If the purchaser of keyword advertising uses someone else's registered trademark to purchase advertising from a search engine operator, causing consumers to search for the text of someone else's registered trademark on a search website, and the top search result shows the website of the advertising purchaser, does this behavior constitute an unfair act under Article 25 of the Fair Trade Act?

The Intellectual Property and Commercial Court issued a civil judgment (Case No.:111-Min-Shang-Su-Zi No. 8) on December 7, 2023, with an affirmative view on the matter.

The reasons for the court's determination that the defendant's behavior constitutes an unfair act under Article 25 of the Fair Trade Act are as follows:

1. Competing businesses use keyword advertising to promote their services through the Internet and the media, and when consumers search for the disputed trademark, the defendant's website appears with the text and URL, linking to the defendant's cram school website. The website shows 18 locations nationwide, indicating that the disputed keyword advertising is for the marketing of the defendant's cram school.
2. The content of the disputed keyword advertising all places the plaintiff's disputed trademark before the name of the defendant's cram school, easily leading relevant consumers to mistakenly believe that the plaintiff and the defendant's cram school are from the same source or related companies. Consumers who are confused or unaware may click on the disputed keyword advertising and be directed to the defendant's cram school website, reducing the plaintiff's opportunities to reach potential customers. The defendant's actions constitute unfair competition by attaching to the reputation of others and highly imitating the efforts of others, and improperly influencing the transaction decisions of relevant consumers. It is unfair to other competitors who need to strive for transaction opportunities through their own efforts. If not stopped, this kind of unfair act may lead to other businesses imitating each other, without generating any effect alerting other businesses, and may cause potential consumers to be confused or have substitution effects, which could significantly affect the fairness and order of transactions.