High Court ruling puts kibosh on Google Adwords scam

legal 2Companies which use rivals’ branding in targeted Google Adwords campaigns have been dealt a killer blow following a two-year High Court case which has ruled the practice illegal.

The case was brought by outsourcing specialist AdvanceTrack against one of its direct competitors, GI Outsourcing, which had been using the former’s branding to woo new customers.

AdvanceTrack (the trading name of E-Accounting Solutions), a specialist outsourcer of accountancy and audit services and a member of the Institute of Chartered Accountants of England and Wales, was one of at least four companies being targeted by GI Outsourcing, but the only one to see the case through to the High Court.

Sitting at Birmingham Civil Justice Centre, Judge James Tindal ruled that GI Outsourcing, through a third-party Midlands-based marketing agency, had infringed the trademark of AdvanceTrack and was also liable for passing off AdvanceTrack’s trademark as its own – breaching laws protecting brands from companies illegally using Google to target their competitors.

AdvanceTrack founder and managing director Vipul Sheth has pledged to award 100% of any damages the company receives to charity.

He said: “This was a six-figure risk, but it was crucial to protect our brand, our competitors’ brands, and the wider industry.

“This wasn’t ever about the money, it was about holding our industry to higher standards, so it was very disappointing we had so much resistance from GI Outsourcing in this case. We felt it was obvious they were infringing our trademark – as well as potentially others – and marketing through Google Adwords unlawfully.

“We cannot and should not stand for this type of behaviour. The judgment is a win for us, but more so it’s a win against bad practice, which if left unchallenged could be a scourge on our profession. There are a handful of firms in this space, including us, that are working incredibly hard to raise standards, and when organisations act like this, they are damaging those efforts.”

GI Outsourcing [the trading name of Global Infosys] is owned by Macalvins Group and infringed UK trademark laws – which are based on EU Law – when launching its Google Adwords campaigns using AdvanceTrack and three other known outsourcing competitors during the Covid-19 pandemic period, between March and May 2021.

GI Outsourcing claimed that it was an error by its marketing agency, however, emails proved CEO Tariq Husain was involved in active discussions about the campaign and the keywords it would be bidding for. The judgment says Husain “plainly authorised – indeed instructed – those adverts”.

The judge ruled against GI Outsourcing, noting that Husain acknowledged the value of the reputation of the AdvanceTrack mark. He said GI Outsourcing had tried to “use its [AdvanceTrack’s] reputation” and included AdvanceTrack’s brand in error in its ‘Ad Text’ multiple times during the campaign, which was called “ill-fated”, “disastrous”, and a “serious error” in Judge Tindal’s approved judgment.

Judge Tindal also said: “This is rather a legal minefield…This case may be helpful as an example of how not to do it. A wise first move will be a search whether a competitor’s brand is actually a trademark, adding “including it [the trademarked brand] in the advert itself as opposed to as just a ‘keyword’ can backfire commercially as well as legally.”

He also added, however, that “even limiting it to a keyword may not be enough to avoid liability”, adding: “It may be wise for a small business to get advice, especially in these legally as well as commercially uncertain times, as our legal system begins in earnest to detach from the EU.”

AdvanceTrack was supported in the case by John Ward at Midlands-based Brindley Twist Tafft and James Solicitors, Barrister Nick Zweck KC from IP specialists Hogarth Chambers, and Leanne Hall from patent and trademark law experts Serjeants.

Leanne Hall said: “We would always recommend carrying out a search to check whether someone else has registered a trademark before you use it. As this case has shown, using a competitor’s mark can make you liable for trade mark infringement.

“Using a Registered Trademark in an advert that is visible in the search results is not acceptable because it creates a high likelihood that customers will confuse the two brands.”

Sheth added: “Our legal team has been fantastic throughout this process, having been alongside us for around two years, and I’d like to commend their efforts to help us win this important case.”

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