Article by Jonathan Ball (Norton Rose Group) and Emma Nelson
In a blow for Australian brand owners who have or plan to have a stake in the European market, the Advocate General who is the legal advisor to the European Court of Justice (ECJ) has stated that the Google AdWords system does not infringe third party trade mark rights.
When internet users input search terms into the Google search engine, a list of natural search results is generated, being selected and ranked according to relevance to the search term inputted.
Google's Adwords system allows advertisers to pay for certain keywords. When a user inputs these keywords into the browser, it causes the advertisement to appear at the top of the natural search results generated, or on the side of the screen or against a different background. The advertisers pay Google on a per click basis for users clicking through on their link.
At present, advertisers can bid for keywords that contain or comprise the brands and trade marks of third parties. This is the controversial aspect of the Adwords system that has resulted in litigation around Europe against Google. Brand owners claim that Google's commercial use in generating income through 'sale' of keywords comprising other parties' trade marks should be trade mark infringement. Moreover, Google should be held accountable for assisting the infringers, by allowing them to use others' brands by the Adwords service.
Advertising systems like Adwords have been the subject of trade mark related litigation in Austria, Belgium, Germany, Italy, the Netherlands and the United Kingdom. Each of these countries, on different grounds, has found these systems to be legal.
The ECJ case results from referrals from three proceedings in France brought against Google regarding the legality of the use of trade marks as keywords. These cases were generally in the context of counterfeit and identical or similar products of competitors available via the advertised links made available by the Google Adwords service. One of the claimants in France is Louis Vuitton Mallatier — luxury goods brands being particularly susceptible to internet based counterfeit operations.
The French courts found Google liable for trade mark infringement. Google appealed, leading ultimately to the referral of a number of key questions to the ECJ.
The Advocate General's opinion
The Advocate General's opinion precedes the ruling of the ECJ, but it is not binding on the ECJ. The Advocate General, although finding that Google has been making commercial use of the trade marks in its Adwords system, nevertheless considers that:
- the 'purchase' by advertisers of keywords that contain or comprise a third party trade mark that triggers the display of a link to the advertiser's site that offers identical or similar goods to that for which the trade mark is registered does not constitute, in itself, infringement of the trade mark
- the trade mark owner cannot prevent a provider of a paid referencing service, like Google Adwords, from making available keywords which reproduce or imitate its registered trade marks.
Key to his findings was the view that the use of trade marks in keywords, and the consequent display of advertised links, would not lead consumers to confuse the origin of those goods or services. The Google search engine should be viewed as nothing more than a tool, the internet users only deciding on the origin of goods or services offered on the individual sites by reading their description and ultimately by leaving Google and clicking through and entering those sites.
The Advocate General emphasised that the opinion relates only to the use of keywords, and not to the subsequent use of trade marks in advertised links or on products available through such links.
He clearly rejected the argument put forward by the brand owners that, because Google's Adwords service can be used to assist trade mark infringers, Google itself should be liable for 'contributory' infringement. That would be extending the scope of trade mark protection too far. He considered it important that the ECJ not allow the legitimate purpose of preventing trade mark infringements to lead to a general prohibition of all trade mark use in cyberspace.
The opinion, if followed by the ECJ, will be viewed as a set back for brand owners, particularly those subject to extensive on-line infringement and counterfeiting. They will not be able to fight counterfeits and other infringers by 'nipping in the bud' the Adwords type services that give those sites heightened exposure to internet users.
As mentioned above, the opinion does not in any way impact the brand owners' rights to enforce trade marks against the advertisers themselves for use of the trade marks on their sites.
Brand owners in Europe and around the world are waiting with some trepidation to see whether the ECJ will follow the Advocate General's opinion, and should use this as an opportunity to revamp their current business strategy that deals with counterfeiters and infringers.
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