In the space of two days, the Court of Justice of the EU has given judgment in no less than four cases in which brand owners sued for trade mark infringement over the Adwords “referencing service”. What are the key messages for advertisers and is this the last word from the EU courts on these issues? Theo Savvides gives his verdict.
Topic: Brands
Who: Louis Vuitton Malletier SA, Viaticum SA, Luteciel SARL, Eurochallenges and Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmuller GmbH v Google & Others
When: 23-25 March 2010
Where: Court of Justice of the European Union
Law stated as at: 25 March 2010
What happened:
On 23 March 2010 the Court of Justice of the European Union ("CJEU"), the renamed European Court of Justice, issued its judgment in three joined cases brought against Google in relation to Adwords. These cases had all been brought in France by owners of registered trade marks the Adwords service allowed others to use as links to their own websites. "Louis Vuitton" was one of the brands allegedly infringed.
Second verdict follows two days later
This judgement was followed just two days later by another CJEU verdict on very similar facts, this time in a trade mark infringement case brought in Austria by the owners of the leading Austrian trekking, adventure tour and mountain expedition brand Bergspechte/Edi Koblmuller. The appeal judges adopted the same approach, thus apparently confirming the position as pronounced in the 23 March judgment, but other cases are still in the pipeline.
The 23rd March "Louise Vuitton" judgment was a general validation of Google's position, ruling that Google was not liable for trade mark infringement.
It went on to hold, however, that advertisers who bid on a competitor's trade mark as a keyword will be liable for trade mark infringement if the underlying advertisement that is displayed in response to the keyword being entered as a search term is likely to confuse the average internet user as to the origin of the goods or services which are being advertised.
Background
Google operates a system called AdWords, which allows advertisements to be displayed alongside natural search results in response to keywords being entered into the Google search engine. Advertisers select those keywords and pay Google on a cost-per-click basis. These sponsored links typically constitute a short commercial message with a link to the advertiser's website, and are distinguishable from the natural search results by their format and placement. Revenue generated by the AdWords programme is used by Google to support its search engine service.
The cases in question were brought by brand owners in France, including LVMH, who complained that Google had infringed their registered trade marks by "selling" keywords corresponding to their registered trade marks to advertisers, thereby triggering sponsored links for those companies alongside the natural search results. The French courts sought clarification from the CJEU on whether that amounts to an infringing use of those trade marks under EU trade mark law.
The CJEU Judgment
The CJEU judgment breaks down into two parts:
- the position of an advertiser who bids on a trade mark as a keyword; and
- the position of Google which allows advertisers to bid on trade marks as keywords and operates the AdWords system to ensure that an advertiser's advertisement appears as a sponsored link when the keyword it has bid on is entered as a search term.
The Advertisers' Position
The CJEU has held that the act of bidding on a competitor's trade mark as a keyword as such is not a trade mark infringement. An advertiser who bids on a competitors trade mark as a keyword will only be liable for trade mark infringement in two circumstances:
(i) where the advertisement displayed does not enable an average internet user to ascertain whether the goods or services referred to in the advertisement originate from the proprietor of the trade mark as opposed to a third party unconnected to the proprietor; or
(ii) where the advertisement displayed makes it difficult for an average internet user to ascertain the origin of the goods or services advertised.
In its reasoning to support this conclusion, the CJEU made the following comments:
- where the ad suggests that there is an economic link between the advertiser and the proprietor of the trade mark, there will be trade mark infringement;
- where an ad is so vague that normally informed and reasonably attentive internet users are unable to determine, on the basis of the advertising link and the commercial message attached to the link, whether the advertiser is connected to the trade mark proprietor, again there will be trade mark infringement.
What does this mean for advertisers?
For advertisers using the Google AdWords system, the judgment gives some comfort that bidding on a competitor's trade mark as a keyword will not, of itself, amount to trade mark infringement. The key for any advertiser seeking to bid on a competitor's trade mark is ensuring that the link and associated advertisement clearly identify the goods or services being advertised as those of the advertiser.
Google's Position
The CJEU held that the operation of the AdWords system by Google to allow third parties to use keywords which are identical or similar to trade marks did not amount to trade mark infringement by Google.
It also held that Google was an information services provider for the purposes of the E-commerce Directive (Directive 2000/31). This meant that it would be able to rely on the provisions of the E-commence Directive to avoid liability for any storage or transmission of advertisements which are deemed to infringe a third party's trade mark, as long as it did not play an active role in the advertising process so as to give it knowledge of or control over the data. Furthermore for Google to be able to continue to rely on this protection, it would have to act quickly to remove or disable access to any advertisement once it obtains knowledge of the unlawful nature of the advertisement.
Why this matters:
These are very important cases for brand owners and advertisers. The approach adopted by the appeal judges makes it clear that users of the Adwords service will need to take special care to ensure that the advertising message which the competitor's brand links through to is clear as to the origin of the goods being advertised. This, in part, is likely to depend on the distinctiveness and reputation of the advertiser's brand and url used in the sponsored link, as well as the content of the advertising message.
Having said this, it is still not clear whether these judgments will be the "last word" on Adwords and trade mark infringement. Also, the Austrian case differed slightly on the facts and issues as the link was only similar to the claimant's registered trade mark, not exactly the same.
Other cases have been referred to the CJEU concerning bidding on competitor trade marks as Google AdWords1 and so far the CJEU has not indicated that it will use these judgments to dispense with these references. This suggests that it will be giving further judgments on this issue and it remains to be seen whether the facts and circumstances of these cases lead to any new legal principles or nuances.
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1 Osborne Clarke is acting for Marks & Spencer in the case of Interflora Inc & Others v Marks & Spencer plc, one of the cases currently before the CJEU on the Google AdWords issue.
