Google has escaped liability for multiple claims of trade mark
infringement through its AdWord application, much to the dismay of
trade mark owners.
Google operates a paid referencing service called 'AdWords'
which enables businesses to reserve "keywords" and appear
as a sponsored link on a search results page. These sponsored links
are displayed either on the right hand side of the results page or
above the natural search results.
A fee for the referencing service is payable by the advertiser for
each click and advertisers who reserve the same keyword are listed
in descending order according to the amount paid to Google. To
facilitate the AdWord application, Google set up an automated
process for the selection of keywords and the creation of ads so
that businesses have control over the text included on the
sponsored link.
In 2008, various companies, including luxury goods producer Louis
Vuitton Malletier SA, brought claims against Google for trade mark
infringement under the AdWord application. Following appeals by
Google, the French Courts subsequently sought clarity from the
European Court of Justice (ECJ) on the following issues:
1. Whether an owner of a trade mark is entitled to prevent a paid
referencing (service such as the AdWords application) from
displaying trade marks under Article 5(1)(a) and (b) and 5(2) of
the Trade Marks Directive 89/104.
2. Whether the AdWords application falls within the meaning of
Article 14 of the E-Commerce Directive 2000/31 so that that Google
could not be liable for illegal activity until it has been notified
by the trade mark owner of the unlawful use of the sign by the
advertiser.
In reviewing the facts the ECJ distinguished between the advertiser
and Google as the internet service provider. The court concluded
that whilst a trade mark owner could prevent an advertiser from
using an identical or similar sign under on the AdWords
application, the trade mark owner could not bring a claim against
Google. The fact that Google had created software to enable
advertisers to use a sign did mean that Google itself was using the
sign.
In relation to the second issue, and whether Article 14 of the
E-Commerce Directive applied to paid referencing services, the ECJ
focused on Google's role as the AdWord application provider.
The ECJ concluded that the software created by Google to run the
application meant that the information was processed automatically
and knowledge of infringing trade marks could not therefore be
assumed. The ECJ described Google's role as merely technical,
automatic and passive and Google could not therefore be liable for
data which was stored unless, having obtained knowledge of the
unlawful nature of the date, the service provider failed to act
expeditiously.
As a result of the ECJ's ruling, trade mark owners must now sue
advertisers individually to combat trade mark infringement issues
arising from the use of AdWords or similar services. This is likely
to be a logistical nuisance given that each EU national court has
leeway to decide what it is exactly that will constitute an
infringement.
Only time will tell whether this ruling will have a serious impact
on advertisers' use of keywords. Perhaps an easier prediction
for the time being, is the ability of Google to turn a blind eye to
the infringing data stored within its ever-expanding crypt.
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