STJ: selling a keyword composed of a competitor’s brand in a sponsored ad of virtual search engine can characterize unfair competition

STJ: selling a keyword composed of a competitor’s brand in a sponsored ad of virtual search engine can characterize unfair competition

The 3rd panel of the Superior Court of Justice (STJ) recently ruled that the practice of buying and using keywords referring to a competitor’s brand in order to appear prominently in internet search results constitutes unfair competition.

The case in question involved the Brazilian lingerie brand “Hope”, whose trademark owner filed a lawsuit with the São Paulo Court of Justice (TJSP) against a search provider because it believed it was being harmed in its search results, as the name of its brand was linked to another company in the same industry.

At first instance, the judge ruled that the act could cause confusion among consumers, citing the influence and unfair capture of customers, as well as recognizing the passive joint venture between the search engine and the company that acquired the ad, “Loungerie S/A”.

In the appeal phase, the demand was to decide whether there was in fact unfair competition in the “purchase” of a keyword identical to the brand of a competing company in order to stand out in searches; whether there was a joint liability between Loungerie S/A and the search engine; and whether the latter could be held liable in the civil sphere, in accordance with the Brazilian Civil Rights Framework for the Internet.

Among the arguments presented, Justice Nancy Andrighi’s analysis stands out, saying that “there is no need to talk about comparative advertising when the act in question generates confusion among consumers, unfair competition and an unjustified profit from the prestige of the competitor.” It also noted that the search engine has active control over the keywords it is marketing, and that it is possible to avoid intellectual property infringement in these cases.

Thus, the STJ followed the TJSP and dismissed the internet search company’s appeal, consolidating that there was in fact a contractual relationship between it and Loungerie S/A, with the aim of advertising promotion, and that this infringed the plaintiff’s intellectual property rights by generating acts of unfair competition.

The decision can be accessed via the link: https://processo.stj.jus.br/processo/julgamento/eletronico/documento/mediado/?documento_tipo=integra&documento_sequencial=202738853&registro_numero=202202101214&peticao_numero=&publicacao_data=20230815&formato=PDF

Note: For quick release and cost control, this English version is provided by automated translation without human review.