UK: Do Trade-Marked ´Adwords´ Infringe?

Ja! No! Oui! Nein!
Last Updated: 30 October 2008
Article by Georgie Collins

When you search the internet it is the clever use of 'adwords', keywords purchased by advertisers, that enables certain adverts and sponsored links to appear alongside your search results. But those websites and links sometimes seem to have little or no legal connection with the trade marked words used in the search, and that has led to the use of adwords by search engines becoming a highly contentious area of trademark law. Smartlaw rounds up some recent European case-law.

There has been a spate of legal actions in recent years about the extent to which trademarks are infringed when they are used as keywords to generate internet search results. So far in 2008 alone, there have been four such cases – one each in Belgium, France, Germany and the UK – and the various courts' decisions have been evenly split. The UK and German courts held that the search engine was not guilty of trademark infringement, but the Belgian and French courts took the opposite view.

In January this year, in Belgium, eBay was found to have infringed the trademarks of luxury goods providers by using the trademarks Ralph Lauren and Polo Sport, amongst others, as Google adwords. The Belgian court found that this practice amounted to trademark infringement because, in contravention of the Benelux Convention, the marks were not being used for the purpose of distinguishing goods.

In February the Paris Court of Appeal overturned an earlier French decision by ruling that Google's adword generator program, because it suggests that given trademarks are relevant, was liable for trademark infringement. Interestingly, this was the third case involving Google and the use of adwords to reach the appeal court in Paris. On all three occasions Google has lost.

At about the same time, across the border in Germany, a Frankfurt court hearing a preliminary injunction application held that the use of a trademark as a Google adword does not constitute trademark use. The judge commented that consumers can differentiate between the adverts of a trademark owner and its rival(s) and there was no trademark infringement.

Although it is perhaps too much to hope that the legal position might be standardised between Europe and the US (there are real differences in trademark laws on either side of the Atlantic), there is clearly a pressing need for a consistent approach within the European Union, if only so that trademark owners can be certain of their rights.

The UK approach

The decisions in France and Belgium are at odds with the UK's 'Mr Spicy' case, in which Yahoo was accused of trademark infringement in respect of the use it was said to have made of the mark Mr Spicy (a registered Community trademark). When Mr Spicy was typed into the Yahoo! search engine the sponsored results that appeared first were not for the claimant's website but for sites such as Sainsbury and Pricegrabber.

The High Court ruled that bidding to use a competitor's trademark as a keyword did not constitute "trademark use" and so did not amount to infringement. Furthermore, the only use of the 'Mr Spicy' trademark was by a PC user who had typed in the mark, rather than by the search engine or for that matter one of Mr Spicy's competitors. Even if there had been use, said the court, it was not a use sufficient to jeopardise the ability of the claimant to deploy the trademark as a guarantee of origin for his own products.

This ruling is consistent with the decision in the case of Reed Executive v Reed Business Information 2004. But some caution is needed when attempting to apply the Mr Spicy ruling to other cases with similar circumstances, not least because the decision followed a summary judgment application in which the claimant represented himself and, secondly, simply entering the non-trademarked word "spicy", instead of "Mr Spicy", reportedly generated the same adword results.

Nonetheless Google appears to have relied on the Mr Spicy judgment in subsequently amending its complaints policy in the UK and Ireland, bringing it into line with the US and Canada. Companies can now bid on their competitors' trademarks so that a search for that trademark will bring up the company's own advert.

In a sense, though, the jury is still out on the issues that Mr Spicy purports to resolve. For the time-being at least Mr Spicy remains a far from prominent presence on the high street. But what if a similar case were to be brought in defence of a highly distinctive, not to say famous, trademark? Then it would be perfectly possible that the UK courts would take a quite different view. What's more, given that trademark law across Europe is intended to be harmonised, the different approaches taken by individual member states is far from satisfactory; a determination by the European Court of Justice is badly needed to provide consistency and clarity on this issue. It will not go away on its own.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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