Bus companies feud over keywords
Two of the country's biggest bus companies, Intercity Coachlines and Naked Bus NZ, are embroiled in a landmark legal dispute over the use of the trademarked term "intercity" to drive Google advertisements.
In the High Court in Auckland today, Intercity said rival Naked Bus NZ had breached the Trades Mark Act and the Fair Trading Act. It had orchestrated a Google AdWords campaign to attract potential customers, using Intercity's trade mark.
The case is significant as there is little case law in New Zealand regarding trade mark infringement. It centres on Google "broad match" paid advertisements, Google AdWords.
AdWords is a paid advertising service offered by Google. The service uses keywords in internet searches to trigger advertisements on the Google results page.
Intercity's lawyer, Josh McBride, said Naked Bus had held meetings and internal emails between top managers outlined how they planned the AdWords service to use "inter city" as a keyword to trigger their own Google advertisements.
Naked Bus knew that using "inter city" instead of "Intercity" in the Google search engine would trigger "keyword" advertisements for Naked Bus. This was because Google's intricate algorithms would produce results for either term.
Google's auto-correct and broad-match functions remove spaces and spelling errors from search terms and add related terms, to generate relevant advertisements.
McBride said the campaign amounted to trade mark infringement.
The Naked Bus campaign in October 2012, used the terms "inter" and "city" as keyword searches, prominently and in bold, often more than the company's name in its advertisements, he said.
That was mainly aimed at generating views and clicks on Naked Bus advertisements, McBride said.
Naked Bus had defended the words "inter" and "city" as key AdWords search terms in Google searches because they were key descriptors of the domestic bus network and the words individually were commonly used.
"Naked Bus say that 'we saw it in a dictionary ... lots of people use it and so we can too'," McBride said.
But it was hard to argue for this honest descriptive use, when Naked Bus used other terms of description, such as "long distance bus travel" in company advertising and on Facebook.
It could have used dozens of alternative key search terms that would not have potentially infringed Intercity Coachline's trade mark, McBride said.
Naked Bus could also have used a Google function called "negative match" which would have allowed its ads to pop up on Google searches under the terms "inter" and "city" but not for the trademarked "Intercity" [Coachlines].
Emails between Naked Bus directors proved that they knew of the negative match for "Intercity," but they removed that function.
Intercity complained to Google in December 2012. Google responded by blocking any advertisements for Naked Bus using "Intercity" as the search term.
But Google lifted the ban in April 2013.
McBride said Naked Bus chief executive and founder Hamish Nuttall had disclosed in the case evidence the amount of money made from the Google AdWorks campaign and that it was ongoing.
Nuttall is expected to give evidence later in the trial which is set down for a week.