Advocate General Poiares Maduro 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 ‘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.
Context
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 for a preliminary ruling in May 2008.
Held
The Advocate General’s made four key findings in relation to (i) the offer and selection of keywords, (ii) the use of keywords in generating results, (iii) the rules for trade marks with a reputation and (iii) the context of the e-Commerce Directive
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.
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 only to 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.
Comment
The ECJ’s final judgment on these cases is not expected until early next year. Even if the Opinion is followed, this will not resolve the issue as to whether, and in what circumstances, the advertisements which are triggered by keywords can result in trade mark infringement.
This will be far from the end of the keyword debate.
Susan Barty and Isabel Davies are Partners at CMS Cameron McKenna LLP. Tom Scourfield is a Senior Associate there. See www.cms-cmck.com.
