Google’s use of its AdWords tool cannot in itself amount to trade mark infringement. However, Google and other search engine providers will still be required to act expeditiously to remove advertisements that infringe third party trade marks as soon as they become aware of them. In contrast, advertisers that purchase trade marks as keywords through AdWords or similar tools may be liable for trade mark infringement where the resulting advertisements do not easily enable internet users to ascertain whether the goods or services covered by the advertisements originate from the trade mark owner or unconnected third parties. These were the conclusions of the European Court of Justice in Google and ors v Louis Vuitton and ors following a reference to the Court by the French Cour de Cassation (Joined cases C-236/08 to C-238/08, 23 March 2010).
The facts
Google (along with other search engine providers) supplies a keyword sponsorship product (in Google’s case, AdWords) which enables advertisements to be displayed, alongside ‘natural’ results, in response to designated inputted keywords. Advertisers select keywords so that their advertisements are displayed in response to the input of those keywords and pay Google on the basis of the frequency with which users click on the advertisements’ links. A number of trade mark owners, including Louis Vuitton, sued Google France for trade mark infringement in France on the basis of the use of their marks as sponsored keywords.
Use in the course of trade
The Court of Justice was clear that Google could not be liable for infringement under EU trade mark rules since Google’s sale of its AdWords tool did not amount to use of third party trade marks in the course of trade; it merely created the technical conditions necessary for advertisers to use the marks.
Advertisers may be infringing
The position was different for advertisers. Where an advertiser sponsored a keyword which was identical to a registered trade mark and the advertisement resulting from the entry of the keyword as a search term appeared immediately afterwards and in close proximity to the point where the search term was entered, the display of the advertisement was liable to create the impression that there was a material link between the advertiser’s goods or services and the trade mark owner. This would amount to trade mark infringement since the ability of the trade mark to distinguish the goods or services of one undertaking from those of another would be undermined. However, it will be for national courts to decide on the facts of each individual case whether a trade mark’s distinguishing function has in fact been (or is likely to be) affected.
The ruling allows national courts considerable leeway in determining infringement in keywords cases, suggesting an unpromising prognosis for harmonisation in this area.
Further, advertisers may in the future become more cautious before using AdWords (or similar services), at least until they are satisfied that the presentation by the search engine providers of sponsored results is unlikely to be deemed infringing by the national courts, whose approaches to the issue may vary widely. This may impact on providers’ business models: they may need to consider modifying the presentation of sponsored advertisements to ensure that trade marks they refer to are clearly being used in a descriptive rather than in a trade mark sense, that is (in this context), as a badge of origin.
Finally, the decision means that brand owners will need to pursue infringing advertisers directly, rather than rely on service providers as a shortcut to preventing infringements.
Mere hosting by Google?
The Cour de Cassation also asked the Court whether a service such as Adwords was an information society service within the terms of the E-Commerce Directive (2000/31/EC) and, if so, whether a search engine provider could be excluded from any joint liability with an advertiser for infringement under the hosting defence of Article 14 of the Directive. (Questions of joint liability are decided under national law.) The Court held that, while Adwords was an information society service, the exemption would apply only where the provider’s role was merely “neutral in the sense that its conduct is merely technical, automatic and passive” such that it had “not played an active role of such a kind as to give it knowledge of, or control over,” the keyword data that it stored from the advertiser. Once the provider knew of the infringing nature of the stored data or the advertiser’s activities, it would need to act “expeditiously” to remove or disable access to the data in order to avoid liability.
The fact that a provider receives payment for its keywords service does not exclude application of the exemption. On the other hand, the role that the provider plays in drafting any commercial message that accompanies the advertising link is relevant. The Court of Justice left the question of whether or not the exemption applied in each individual case to the national courts. Consequently, there is a risk that national courts within the European Union may issue inconsistent rulings and possibly irreconcilable judgments on the liability of search engine providers, even though there are no borders to the internet. The objective of harmonisation appears to be a long way from being achieved.
Sponsored keywords are the subject of a number of pending references to the ECJ, including Interflora v Marks & Spencer (Case C-323/09), which addresses the use of keywords by a trade mark owner’s competitors.
Alex Batteson, Solicitor-Advocate, on +44 20 7456 5808 (alex.batteson@linklaters.com)
Marianne Schaffner, Avocat à la Cour, on + 33 1 56 43 59 60 (marianne.schaffner@linklaters.com)
