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The key to Keywords?

On Tuesday the European Court of Justice (ECJ) handed down its decision in the Google Adwords case .

The ECJ’s decision has been claimed as a victory by both Louis Vuitton Malletier’s parent company LVMH and Google. But equally if more important is the guidance given by the court as to when advertisers who use Google keywords will and will not fall foul of European trade mark law. It now seems that, at least in the United Kingdom, you can use the keywords that comprise the trade marks of others, but you have to be very careful how you do it.

Background: Google Adwords

Adwords offers advertisers, through the purchase of “keywords”, the opportunity to create targeted advertisements that take the form of sponsored ad’ links, on both Google search pages and throughout its network. It is a hugely important source of revenue for Google; it is estimated to make up 97% Google advertising revenue, which in 2008 was $21 billion (USD).

In 2004 in USA and Canada Google allowed the purchase of keywords that included the trade marks of others in its Adwords service. In 2008 this was also allowed in parts of Europe.

Many trade mark owners have tended to be hostile to this activity. For them, it enables competitors and counterfeiters to create a link to and benefit from the trade mark’s reputation. It is trade mark death by a thousand clicks.

However, competitors, who may be trade mark owners themselves, may well see things rather differently. As long as end-consumers are not confused or mislead, they may consider this legitimate competition.

The Questions

The full text of the questions is available here, but the questions referred boiled down to, is there any way to “get Google” for offering trade marks to people other than the trade mark owner?

There were two strands to this. Firstly was Google committing trade mark infringement? Secondly, , was Google an Information Society Service (“ISS”) for the purposes of Directive 2000/31 (the “E-Commerce Directive”) that was able to take advantage of the “hosting” defence set out in the Directive.

The Opinion: the Attorney –General’s View

The Attorney General gave his opinion on the issues in September 2009. In his view any “internal” use of keywords - that is use which was only visible to the advertiser and Google - was not an infringement. However, “external use” where the keywords were used in the content of the advertisement itself could constitute trade mark infringement.

He also was of the view that Google could not take advantage of any defence provided by the E-Commerce directive. Google had a direct interest in internet users clicking on the sponsored links through the payment it received when this happened. The advertisements were (in contrast to the natural results presented by the search engine) not a neutral information vehicle and as a consequence the defence was not available.

The Answers: the ECJ Decision

The ECJ unusually approached the case in a different way to the Attorney General’s opinion.

The court concluded that there was no infringement in the offering or selection of keywords. In its analysis Google did not “use” the trade marks through the keywords but merely made the trade marks available for “use” by the purchasing advertisers.

Advertisers’ use of trade marks could be infringing if the content of the advertisement did not clearly enable the reasonably informed internet user (a person who is familiar with the layout and operation of sponsored links) to recognise that the advert was not from the trade mark owner. If it was vague or ambiguous as to source then there would be infringement.

This did not mean that Google was entirely off the hook. Google might still be liable under national laws. The laws of unfair competition were expressly mentioned, but law of accessory liability may also be relevant here. So, Google’s ability to take advantage of an Article 14 hosting defence remained vitally important. Unfortunately, on this point the ECJ somewhat fudged the question. The ECJ held that Google was an ISS. It also found that neither payment for the Adwords service, nor the inclusion of the adverts on the search page and correspondence between the search term and key word were enough to take away from the essentially “technical” nature of Google’s role and deprive it of the defence. However, it declined to decide whether the fact that Google determined the order of display according to, inter alia, the remuneration paid by the advertiser, was involvement which meant that Google’s involvement was more than “of a mere technical, automatic and passive nature”. It sent this question back to the national courts to determine as a matter of fact.

What does this mean?

First, the decision makes it clear that those use services of the type offered by Google, can choose keywords that embody the trade marks of others without infringing those trade marks. But they must be very careful how they do so. They must make it crystal clear from whom the advertisements come and any ambiguity in an advertisement may prove fatal.

Even then, particularly where the advertisements are aimed at or seen by consumers outside the United Kingdom, there can still be problems under local unfair competition laws. In short, using keywords that incorporate the marks of others is a dangerous activity that it is best not to embark upon without having taken legal advice.

Second, the case still leaves open the possibility that those who offer a similar service to Google may still find themselves liable under local laws of accessory liability. Often the easiest and quickest way to block a problematic keyword advertisement, is to place Google on notice of its contents and to demand that it be taken down. We suspect that the position will remain the same after this decision.

Lastly, and perhaps most disappointing is the ECJ’s failure to firmly grasp the nettle of the ambit and scope of the E-Commerce Directive defences. It is not impossible that Google’s activities will find its way back before the ECJ at some time in the future. This is an issue that is of importance far beyond the question of keyword advertising. It is relevant to anyone who conducts activities on the net where there is some form of user participation in the provision of content. Further clarification of these issues will be eagerly awaited.

 

If you have any further question about the issues raised in this article please contact Matthew Harris of Chloe Taylor of this firm. They can be contacted on info@waterfrontsolicitors.com.

The information contained in this note is for informational purposes only and is not legal advice or a substitute for legal advice. Waterfront LLP does not accept any responsibility for any loss that may arise from reliance upon the information contained within this article. The copyright in this article is owned by Waterfront LLP and permission must be sought before reproduction or publishing.

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