Is it legal to bid on a competitor’s brand name?

Google’s advertising policy draws a clean line, and it’s worth quoting rather than paraphrasing: Google will not restrict a trademark’s use as a keyword, or in the second-level domain of a display URL. What it will restrict is a direct competitor using the trademark in the ad itself, along with anything confusing, deceptive, or misleading. As Google puts it, “the trademark must be used in the ad, not only on the ad’s landing page.”

• Buying a competitor’s brand name as a keyword — allowed by Google, and legal in most markets covered below.
• Putting their trademark in your headline or description — against Google Ads policy, and the point where legal risk starts.
• Using their name in the second-level domain of your display URL — explicitly not restricted by Google’s policy.
• Implying you are them, or officially connected to them, anywhere in the ad — not allowed, regardless of where their name appears.

That policy line and the legal line aren’t identical, but they point the same direction: the keyword is the low-risk part, the visible ad copy is where both Google and the law start paying attention.

Trademark law doesn’t exist to stop you from thinking about a competitor, or from targeting people who search for them. It exists to stop customers being confused about whose product they’re actually buying. That framing explains why courts keep landing on the same distinction as Google’s policy.

In the US, a trademark claim under the Lanham Act needs two things: use of the mark in commerce, and a likelihood of confusion. Rescuecom v. Google (2nd Circuit, 2009) settled that selling a keyword counts as “use in commerce” — but that only cleared the first threshold. It did not decide that keyword advertising infringes; it simply meant these cases could proceed to the confusion question rather than being dismissed outright. 1-800 Contacts v. Lens.com (10th Circuit, 2013) then addressed that confusion question directly: buying a competitor’s mark as a keyword does not inherently infringe, and risk rises sharply once the mark actually appears in the visible ad text. Network Automation v. Advanced Systems (9th Circuit, 2011) added a flexible, multi-factor test for confusion rather than a rigid checklist. Some uncertainty remains — how much weight “initial interest confusion” gets varies by circuit — but the general shape holds: keyword-only bidding is low-risk, and the mark in your ad text is where that risk concentrates.

European and UK courts ask a related but distinctly framed question: does the ad harm the trademark’s “origin function” — can a reasonably observant customer still tell whose goods or services they’re looking at? Google France v. Louis Vuitton (CJEU, 2010) held that keyword advertising is “not inherently objectionable” and that liability turns on whether that origin function is damaged. It’s the same underlying concern as the US confusion test, just built around a different legal question.

• United States — keyword-only bidding is generally low-risk under 1-800 Contacts v. Lens.com; risk concentrates in ad text. Some circuit-level variation remains on how “initial interest confusion” is weighed.
• EU — Google France v. Louis Vuitton frames liability around harm to the trademark’s origin function; keyword advertising alone is “not inherently objectionable.”
• UK — Interflora v. M&S applied the same origin-function test. The Court of Appeal (2014) rejected reliance on “initial interest confusion” and ordered a retrial, so there’s no confirmed final judgment to point to — but the framework itself has carried through post-Brexit largely unchanged.
• India — a stricter outlier. In cases including DRS Logistics and MakeMyTrip, courts have treated keyword use of a registered mark as infringement in itself; these decisions remain under appeal, so the position is unsettled rather than settled-strict.
• Australia, Canada, New Zealand — the general pattern holds: keyword-only bidding is typically fine, ad text carries more risk.

Outside these jurisdictions, don’t assume the pattern transfers. Trademark law is territorial and the case law above doesn’t bind courts elsewhere — get local advice before you assume you’re covered.

Across every jurisdiction above, the pattern repeats: the keyword purchase itself is rarely the problem. What actually gets an advertiser into legal trouble — separate from Google removing the ad for a policy breach — is when the customer can no longer tell whose result they’re looking at.

• The competitor’s trademark appears in your headline or description, not just the targeting.
• Your ad or landing page implies you are the competitor, or an authorised reseller or partner, when you aren’t.
• The overall impression — copy, branding, imagery — is built to look like the competitor’s own listing rather than a distinct alternative.

None of this is a substitute for legal advice on your specific situation. Trademark disputes turn on facts — the exact ad copy, the market, the jurisdiction — that a general guide can’t evaluate for you.

If you’re running the campaign: bidding on a competitor’s brand as a keyword is standard practice and defensible in most markets. Keep their name out of your ad copy and out of anything that implies you’re them, and you’re operating in the low-risk zone the case law above describes.

If a competitor is bidding on you: the keyword alone isn’t something you can stop, by Google or by law, in most of the jurisdictions above. What’s worth watching for is whether their ad text crosses into your trademark or implies a connection that doesn’t exist — that’s the point where you have an actual complaint, not just an unwelcome competitor.