UK: Advocate General Considers That Google´s AdWords Policy Has Not Infringed Trade Marks

Last Updated: 25 September 2009
Article by Susan Barty, Phillip Carnell, Isabel Davies and Tom Scourfield

Advocate General Poiares Maduro issued his long-awaited opinion on 22 September 2009 in relation to the link between sponsored search engine keywords and trade mark infringement. He decided in favour of Google's controversial AdWords system, which permits advertisers to purchase competitors' trade marks as keywords in order to trigger sponsored links in search results.

The Advocate General's Opinion is aimed at ensuring, (in his own words), "that the legitimate purposes of preventing certain trade mark infringements do not lead to the prohibition of all trade mark use in the context of cyberspace".

The key findings are as follows:

  1. The offer and selection of keywords which result in a link being displayed does not of itself constitute an act of trade mark infringement.
  2. The Trade Mark Directive does not enable the proprietors to prevent registration or use of keywords in generating links (although the actual advertisements displayed could do).
  3. It makes no difference if a mark is a mark with a reputation – the extended form of protection is not of assistance.
  4. The provider of a paid keyword service cannot be considered to be an information society service in the context of the E-Commerce Directive.

Importantly, the Opinion does not consider whether the text of the advertisements displayed from keywords could amount to trade mark infringement, only the process of registering such keywords and causing such advertisements to be displayed from search enquiries.

The Advocate General also considered a more general concept, as to whether Google might be liable for some form of contributory infringement because the subsequent use of keywords could result in infringement. The Advocate General was clear that the act of contributing to infringement by a third party, whether actual or potential, would not be an infringement in itself.

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The Opinion relates to three separate references from the French Cour de Cassation in relation to the keyword advertising cases; Google Inc. v Louis Vuitton Malletier, Google France v Viaticum Luteciel and Google v CNHRR (C-236/08, C-237/08, C-238/08). All were referred to the European Court of Justice ("ECJ") for a preliminary ruling in May 2008.

In our Law-Now articles in January and May 2009, we reported that a number of other questions have been referred from the national courts of other Member States on the same subject. The prevalence of these cases highlights the significant impact that the Advocate General's Opinion could have on the development of trade mark law.

The Advocate General's Opinion is not binding on the ECJ, although the court will often tend to follow the recommendations from the Advocate General.

If the Opinion is endorsed by the ECJ, the decision could be a huge disappointment for trade mark owners as it will focus the attention of enforcement activities against the advertiser and the advertisement text generated by paid keyword searches, rather than preventing the registration of such key words in the first place.

The Advocate General's four key findings in relation to the offer and selection of keywords, the use of keywords in generating results, the rules for trade marks with a reputation and the context of the e-Commerce Directive are detailed further below.

Offer and Selection of Keywords

The Advocate General considered that the use of trade marks in these cases is limited to selecting keywords and displaying the results of queries in the search engine. This process is internal to AdWords and therefore only concerns Google and the advertisers. In his view, selecting keywords does not constitute the sale of a product or service to the general public and therefore this use cannot be considered as being "a use made in relation to goods or services identical or similar to those which are covered by the trade marks."

His interpretation goes against the views of many brand owners, who fear that Google AdWords allows competitors to "free-ride" or "piggy-back" on the success and reputation of their trade marks. Many believe that using trade marks as sponsored words could lead to the value of the trade mark being diluted and the associated goodwill being damaged as consumers may find it increasingly difficult to distinguish between the goods and services of the trade mark owner and those of its competitors.

The Advocate General also believes that the advertisers themselves do not commit a trade mark infringement by selecting keywords which correspond to trade marks in Google AdWords. This aspect of the Opinion is relevant to cases brought by brand owners such as Interflora, who are seeking to prevent competitors from "free-riding" upon the reputation and value of their trade mark (as reported in our Law-Now article in May).

Use of Keywords in Generating Results

The Advocate General did accept that Google establishes a "link" between the key words and the sites advertised which sell identical or similar products to those covered by the trade marks. However, in his view, such a link does not always constitute a trade mark infringement: "In effect, the mere display of relevant sites in response to keywords is not enough to establish a risk of confusion on the part of consumers as to the origin of goods and services."

Additionally, the Advocate General noted that Internet users are aware that when they use a search engine, the search results will not be restricted to only those sites affiliated with the trade mark owner. Arguably, the consumer may not even be looking for the specific sites owned by or affiliated with the trade mark owner and may actually be seeking more generic products or services, or sites which offer a review or critique of the trade mark owner's products and services.

Importantly, the Opinion does not consider whether the text of the advertisements displayed from keywords could amount to trade mark infringement, only the process of registering such keywords and causing such advertisements to be displayed from search enquiries.

The Advocate General also considered a more general concept, as to whether Google might be liable for some form of contributory infringement because the subsequent use of keywords could result in infringement. The Advocate General was clear that the act of contributing to infringement by a third party, whether actual or potential, would not be an infringement in itself.

Trade Marks with a Reputation

The Opinion also considered the extended form of protection for marks with a reputation, such as dilution and unfair advantage. The Advocate General emphasised that this did not provide absolute protection. If the use of the mark may be allowed for purely descriptive or comparative advertising services it would be "absurd" to prevent this when AdWords creates a link to the trade mark for consumers to obtain information that does not involve a risk of confusion.

The Advocate General considered that trade mark rights "cannot be construed as classical property rights enabling the trade mark owner to exclude any other use. Accordingly, internet users' access to information concerning the trade mark should not be limited to or by the trade mark owner even if it involves a trade mark which has a reputation."

E-Commerce Directive

Finally, the Advocate General considered whether or not Google would be exempt from liability under the E-Commerce Directive. He accepted that hyperlinks provided by search engines could fall within the definition of an 'information society service' under the Directive. The actual search engine is neutral as regards the information that it carries, so this should apply to a regular search engine activity.

However, by incorporating hosting into the advertising activity, Adwords falls outside the scope of the Directive, which aims to create a free and open public domain on the Internet. The content featured in AdWords stems from the relationship with the advertisers. Consequently, AdWords is not a neutral information vehicle. Google has a "direct pecuniary interest" in Internet users clicking on the ad links and the exemption for hosts provided under the e-commerce directive does not apply in relation to content featured on AdWords.

Decision from ECJ awaited

The ECJ's final judgment on these cases is not expected until early next year. Brand owners and the wider online community will have to wait to see whether the ECJ will follow the Advocate General's Opinion or whether there will be further developments in this area of law, which continues to be a cause of both litigation and controversy. Even if this Opinion is followed, no doubt this will be far from the end of the keyword debate.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 23/09/2009.

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