For many businesses, Google's AdWords service is an easy way
to drive traffic to their website. For a fee, a business can
'buy' keywords so that when someone searches for one of
those keywords using Google, an advertisement linking to the
business' website appears in the search results. Depending on
the arrangement with Google, the advertisement is displayed under
the heading 'Sponsored Links' either next to or above the
natural organic search results list generated.
Anyone can purchase available keywords - which may include
registered trade marks. For example, a competitor of Louis Vuitton
could purchase the keyword 'Louis Vuitton', meaning that
Google users may be presented with an advertisement and a link to a
competitor's website when they search 'Louis
On 23 March 2010, the European Court of Justice handed down a
decision on just this issue. The Court determined the case with
reference to the rights of trade mark owners and liability of
information technology service providers in Europe. These issues
are the subject of litigation in jurisdictions across the world,
including in Australia, and so the decision is of great interest to
Australian trade mark owners.
Amongst its findings, the Court (unsurprisingly) recognised that
owners of trade marks are entitled to prevent others from using
identical or substantially similar trade marks in association with
the same or closely related goods or services, if such display
occurs without the owner's authorisation. This right extends to
internet keyword services such as Google's AdWords.
Accordingly, a trade mark owner could sue a rival advertiser for
using its trade mark as a keyword in these circumstances if members
of the public were misled or confused as to the source or origin of
those goods or services.
However, the case was brought directly against Google, and not
against the rival advertiser, and in this situation the Court
reached a different conclusion. The Court found that under European
trade mark and electronic commerce laws, Google was not involved
enough in the actual use of the trade mark to be held liable for
infringement. Instead, Google merely performed an activity
"technical, automatic and passive in nature", with no
knowledge or control over the information transmitted or
However, the Court found that if Google were to perform a more
active role (such as drafting the advertising message which
accompanies the link to their customer's website), it may not
be entitled to the relevant exemption applied to it under European
laws and therefore may be held accountable.
Although this case was decided under European laws, it is of
great interest to companies that operate internationally over the
In Australia, we're waiting for a decision to be handed down
by the Federal Court in the Australian Competition and Consumer
Commission's action against Google. In contrast to the European
case, the ACCC's argument is based on a breach of the
misleading and deceptive conduct provisions of the Trade
Practices Act 1974, as opposed to action for infringement of a
As seen through the reasoning in the European decision, in most
jurisdictions trade mark law does not provide a cause of action
directly against Google in these circumstances, although it may
provide one against the rival advertiser. Companies aggrieved by
such conduct have better prospects of success if they plead a
breach of consumer protection laws.
For more information about protecting your trade marks, please
contact HopgoodGanim's Intellectual Property and Technology
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