Ever since Google’s launch of its service selling trademarks as key words to trigger ads in online search results, it has been fighting off litigation by owners of the brands it has been selling to the highest bidder.
Topic: E-advertising
Who: Google, Le Meridien, Geico and Metaspinner Media
Where: Germany, France and the US
When: September – December 2004
What happened:
Search engine advertising is one of the biggest advertising growth areas, if not the biggest. One of its chief exponents is Google. Google offers a “sponsored links” service whereby it sells particular terms to the highest bidder. When those terms are keyed into Google by a surfer, a plug for the advertiser who makes the highest bid and a link to its own site will immediately appear to the right hand side of the main search results, in a “sponsored links” column.
In offering this service, Google has had no compunction about offering advertisers links which may be their competitors’ trademarks.
Perhaps not surprisingly, owners of trademarks which are sold by Google as links in this way have been increasingly restive about this practice, and in the last 6 months, Google has fought actions against it over this service in Germany, France and America.
Metaspinner Media sues in Germany
In Germany, software company Metaspinner Media was unhappy about Google selling links to Metaspinner’s competitors which included Metaspinner’s own trademark “Prespiraten”. Metaspinner sued Google for trademark infringement.
The court’s verdict was against Metaspinner. Because the trademark link was not publicly visible, the Germany court did not feel that there was any trademark infringement in the accepted sense.
French challenge
Google’s next opponent was hotel chain Le Meridien. Google was selling links consisting of Le Meridien’s trademarks to the highest bidder and the highest bidder turned out to be a competitor of Le Meridien.
In this case, the court took a different view on pretty much the same facts and what, thanks to an EU Trade Mark Directive, is supposed to be the same law.
The French judge agreed that the practice amounted to trademark infringement and ordered Google to stop linking online ads to Le Meridien trademark terms or face a daily fine of €150. All court fees plus a fine of €2,000 also had to be paid.
US litigation
In the third recent case, Google was sued in the US by car insurer Geico. In that case, however, the brand owner was unsuccessful. The federal judge ruled against Geico because it had failed to show that the practice caused consumer confusion/dilution.
Why this matters:
The only case in a similar vein which has come before the courts in the UK is one previously reported on marketinglaw.co.uk. Google was not involved and the protagonists both used the trademark “Reed”.
One used its competitor’s company name, incorporating a registered trade mark, as a metatag link to its own site. Here the English court took a position similar to the German court in the Metaspinner case. It ruled that there was no likelihood of confusion or association (which had to be established as both trade marks and products were not identical) and hence no trademark infringement.
Continued uncertainty
Although revenue from search engine marketing grew by more than 50% in 2004 to $3.9 billion, there is clearly still considerable controversy and uncertainty as to whether the practice is legal in particular states or in particular circumstances. To get an authoritative European Court of Justice pan-European ruling, Google could appeal the Le Meridien judgement and it may well have done so.
However as things stand, it has to be said that the jury is very much still out so far as this practice is concerned in Europe, with marketinglaw.co.uk taking the view that where the competitor’s exact registered trademark is bought as a link and there is identity of products, the question of consumer confusion is irrelevant and accordingly the French court’s decision in Le Meridien looks to be spot on.
