Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Nakedbus’ advertising tactics deemed 'misleading'

Nakedbus’ advertising tactics to win market share from InterCity deemed ‘misleading’

By Suze Metherell

Feb. 17 (BusinessDesk) – Nakedbus, which challenged InterCity Group’s near monopoly on national bus routes when it started in 2006, has been found guilty of trademark breach after aping its rival’s name to lure customers through Google’s advertising service.

Justice Raynor Asher of Auckland High Court has ruled Nakedbus deliberately infringed on rival bus company InterCity Group’s trademarked name using the phrase as a keyword to lure customers from its rival.

The Feb. 12 ruling is the latest in an ongoing dispute between the “fierce competitors” over the use of the phrase ‘inter city’ by Nakedbus, Justice Asher said in his judgment. Nakedbus has used the phrase ‘inter city’ since its 2006 entry into the market, which it says is a description of the domestic travel services it offers.

However, the judge didn’t find Nakedbus’s use of ‘inter city’ through Google’s AdWords service breached InterCity Group’s trademark.

Google’s AdWords service offers companies an edge over those relying on its ‘organic,’ algorithm-based search results by targeting key search words chosen by the advertiser which link to their website. Nakedbus advertised through Google using search terms including ‘inter city’.

The tactics were reciprocated during a fierce battle for market share, as for several months in 2012 InterCity paid for ‘Nakedbus’ to result in links to its own advertisements in Google searches, according to a 2013 High Court judgment by Justice Rodney Hansen.

InterCity, which operates New Zealand’s largest national bus service InterCity Coachlines, had enjoyed 95 percent market share since 1987, until Nakedbus’ arrival as a budget coachline alternative eight years ago, It now has a 35 percent share, while InterCity has about 60 percent.

The ‘no-frills’ service offers fares as low as $1, which have since been matched by InterCity creating a “price war”, said Justice Asher.

In his evidence founder and chief executive of Nakedbus, Hamish Nuttall said he established the company because he believed “that the ‘intercity’ brand was tired and vulnerable to a vigorous competitor operating online,” according to the ruling.

InterCity first challenged its rival about the use of the phrase in 2006 when Nakedbus used the term throughout its website.

“InterCity welcomes competition – it’s healthy and good for our customers – however we believe in a fair fight,” Nick Hurdle, acting chief executive of InterCity Group said in a statement. “This was a cynical, calculated and deliberate attempt by a competitor to leverage our trade mark and mislead customers.”

“Indeed it was described by the judge as an attempt to exploit the wide recognition of our trade mark ‘InterCity’.”

Nakedbus said it was weighing up the judgment and hasn’t decided whether to appeal.

The proceeding has been adjourned for a further hearing on the account of profits claim.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Starts Talks On Tougher Rules For Property Speculators

The Reserve Bank of New Zealand is stepping up preparations to restrict lending to residential property investors as it watches house prices, particularly in Auckland, continue to rise strongly. More>>

ALSO:

Research: ‘Ageing Well’ Science Challenge Launched

Science and Innovation Minister Steven Joyce today launched the Ageing Well National Science Challenge, confirming initial funding of $14.6 million. More>>

ALSO:

Scoop Business: Govt Resisting Pressure To Pump More Cash Into Solid Energy

Prime Minister John Key says it is “not the government’s preferred option” to make a fresh capital injection into the troubled state-owned coal miner, Solid Energy, but dodged journalists’ questions at his weekly press conference on whether that might prove necessary... More>>

ALSO:

Lagest Ever Privacy Breach Award: NZCU Baywide Accepts “Severe” Censure In Cake Case

NZCU Baywide says that once it was found to have committed a breach of a former staff member’s privacy, it had attempted to resolve the matter... the censure and remedies for its actions taken almost three years ago are “severe” but accepted, and will hopefully draw a line under the matter. More>>

ALSO:

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news