In brief, the ECJ held that:

1. It would not be trade mark infringement to use a third party trade mark as a Google Adword, so long as it was clear (and not confusing) in the search results that the advertiser in question was not the source of the trade marked goods and/or services.
2. Google was not liable for registered trade mark infringement (on the basis that an Internet referencing service provider which stores, as a keyword, a sign identical with a trade mark and organises the display of advertisements on the basis of that keyword does not use that sign within the meaning of Article 5(1) and (2) of Directive 89/104 or of Article 9(1) of Regulation No 40/94).
3. The ECJ also stated that an ISP company, such as Google, would not be liable, so long as they didn’t play an “active” role of such a kind as to give it knowledge of, or control over, the data stored.  If the ISP has not played such a role, that ISP cannot be held liable for the data which it has stored at the request of an advertiser, unless, having obtained knowledge of the unlawful nature of those data or of that advertiser’s activities, it failed to act expeditiously to remove or to disable access to the data concerned.

Comment

This case gives some importance guidance on trade mark law in the UK and the EU on the subject of using third party trade marks as Adwords on Google.  Having said that, as with many questions of intellectual property rights infringement, there is still a significant grey area. In particular, you need to look at the advert in question (the one brought up by use of the third party trade mark as an Adword) and ask the following questions:

1. Could an Internet user be confused into thinking that the advertised goods / services are those of, or, are linked in some way, to the trade mark owner?

2. Is the trade mark expressly referenced in the advert itself?

If the answer to the above questions is “no” in all respects, then the chance of the use of trade mark (as an Adword) will be less likely to be considered an instance of trade mark infringement.

In most cases, adverts can be amended to stay on the safe side of the law of registered trade marks.  If you need any advice on registered trade mark law in this respect, please contact us.

Also, the third numbered point above of the Judgment is important in terms of Article 14 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 (the ‘E-commerce Directive’), as it is the first ECJ on the hosting defence in the E-commerce Directive.   This defence can be crucial for ISPs in matters such as defamation and copyright infringement. Unfortunately, this ECJ decision leaves a lot of questions predictably unanswered, such as what conduct is required before it can be said that such conduct is something more than merely technical, automatic and passive, and, also what time period can be considered as “expeditious”?

FACTS: This case emanated from three references from the French Cour de cassation, all dealing with Google’s advertisement system, “AdWords”.  In order to assist the ECJ with its final decision, the Advocate General (AG) has recently published his decision.

There were various key aspects of trade mark law at issue in this case.  The trade mark proprietors who were complaining about Google AdWords, such as Louis Vuitton, had to prove various elements, namely:

Article 5(1) of Directive 89/104/EEC

(1) That “use” of their marks was “in the course of trade”.  The AG took the view that Google AdWords is clearly a commercial enterprise with a view to a gain and so the condition “in the course of trade” was satisfied. This hardly seems surprising.

However, the AG seemed to miss a potential argument raised by the English Court in the case of  Reed Executive plc v Reed Business Information Ltd [2004] EWCA Civ 159. In the Reed case, the Court of Appeal held that the use of metatags was invisible to members of the public and thus use of trade marks in metatags may well not count as “trade mark use” in the course of trade.  Of course, metatags and AdWords are different situations, but both involve essentially invisible processes in terms of their public facing aspects.  In any event, the AG did not raise this issue.  Instead, he took a slightly more tortuous route to finding non-infringement….

(2) Whether use is made in relation to goods or services which are identical or similar to those covered by the trade marks – the AG held that Google AdWords was not identical or similar to any of the goods or services covered by the trade mark registrations, so this condition was not satisfied.

(3) Whether the use affects or is liable to affect the essential function of the trade mark, by reason of a likelihood of confusion on the part of the public – in this respect the AG held as follows:

“As with natural results, internet users will only make an assessment as to the origin of the goods or services advertised on the basis of the content of the ad and by visiting the advertised sites; no assessment will be based solely on the fact that the ads are displayed in response to keywords corresponding to trade marks. The risk of confusion lies in the ad and in the advertised sites, but, as has already been pointed out, the Court is not being asked about such uses by third parties: it is being asked only about the use by Google of keywords which correspond to trade marks.

It must be concluded, therefore, that neither the display of ads nor the display of natural results in response to keywords which correspond to trade marks leads to a risk of confusion as to the origin of goods and services. Accordingly, neither AdWords nor Google’s search engine affects or is in danger of affecting the essential function of the trade mark.”

Article 5(2) of Directive 89/104/EEC

(1) Whether Google’s uses of keywords which correspond to trade marks affect other functions of the trade mark besides its essential function, in particular, whether they take unfair advantage of, or are detrimental to, the distinctive character or the repute of the trade marks – this was a difficult issue for the AG.  Clearly, the AG felt uncomfortable that if he held in favour of the trade mark owners, this would have a detrimental effect on the efficient running of the Internet:

“The internet operates without any central control, and that is perhaps the key to its growth and success…Keywords are one of the instruments – if not the main instrument – by means of which this information is organised and made accessible to internet users. Keywords are therefore, in themselves, content‑neutral: they enable internet users to reach sites associated with such words. Many of these sites will be perfectly legitimate and lawful even if they are not the sites of the trade mark proprietor.

Accordingly, the access of internet users to information concerning the trade mark should not be limited to or by the trade mark proprietor.”

Accordingly, the AG stated in his Opinion that trade mark proprietors were not able to prevent use of their trade mark registrations via Google AdWords, pursuant to Article 5(1) or 5(2) of Directive 89/104/EEC.

In his Opinion, the AG also made some interesting comments about other aspects of trade mark law, and, in particular, the E-Commerce Directive (i.e. that Google could claim immunity for trade mark infringement in respect of AdWords for merely “hosting”).

CONCLUSION – this decision will worry trade mark owners, who see use of their trade marks by competitors through / on Google Adwords as unfairly free-riding on the goodwill and reputation they have developed (at great cost) over the years.

On the other side of the debate, some people consider that Google AdWords in its current form offers an extremely valuable method for injecting competition into the market.  The AG was clearly worried about the implications of ruling in favour of the trade mark owners, which he thought might result in a too a sanitised and easily controlled (by trade mark owners) list of results on search pages (both in terms of advertisements and organic results).

The AG’s decision also seems like the path of the least resistance for the ECJ to follow.  Ruling the other way, against Google, would really set the cat amongst the pigeons, in terms of the lucrative Internet search industry.  Many EU bodies are also by their nature strongly pro-competitive (and some are openly anti-IP), so maintaining the status quo seems to be the most likely outcome.  The AG’s decision has increased the chances of this end result coming to pass when the ECJ finally rules (probably early next year).

Latest case does nothing to clear up legal confusion.  Whole of Europe now awaits the ECJ’s guidance.

The Interflora v M&S case is the latest decision handed down in the contentious area of companies purchasing competitors trade marks as keywords from Internet search engines.  Here, Interflora alleged (and M&S admitted) that M&S purchased a whole array of “INTERFLORA” keywords from Google, including common misspellings.  Interestingly, however, Google was not a defendant to these proceedings.

M&S, amongst other things, argued that the relevant law (Article 5(1)(a) or (2) of the Trade Marks Directive and Article 9(1)(a) or (c) of the CTM Regulation) was far from being acte clair, as had been evidenced by the fact that a number of national courts of EU member states had already found it necessary to refer questions to the ECJ.

The Judge (the Honourable Mr Justice Arnold) went on to list various national courts around Europe that had already requested preliminary rulings from the European Court of Justice on a number of the issues arising out of Google Adwords in particular:

1.    Case C-236/08 Google France v Louis Vuitton Malletier is a reference from the Cour de Cassation in France lodged on 3 June 2008. The hearing took place before the Grand Chamber of the ECJ on 17 March 2009 together with the next two references. The Advocate General’s Opinion in all three references is expected to be delivered on 4 June 2009.

2.    Case C-237/08 Google France v Viaticum, Luteciel is another reference from the Cour de Cassation lodged on 3 June 2008.

3.    Case C-238/08 Google France v CNRRH is the third reference from the Cour de Cassation lodged on 3 June 2008.

4.    Case C-278/08 Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmüller GmbH v Günter Guni and trekking.at Reisen GmbH is a reference from the Oberster Gerichtshof in Austria lodged on 26 June 2008. The hearing of this reference took place on 7 May 2009.

5.    Case C-558/08 Portakabin Ltd v Primakabin BV is a reference from the Hoge Raad der Nederlanden lodged on 17 December 2008.

6.    Case C-91/09 Eis.de GmbH v BBY Vertreibsgesellschaft mbH is a reference by the Bundesgerichtshof in Germany made by order dated 22 January 2009 and lodged on 6 March 2009.

M&S sought to have the whole case stayed pending the above references being handed down.  For various reasons, the Judge felt that this did not offer sufficient certainty that the ECJ would answer all of the questions raised by this case.  For example, there was the possibility that some references to the ECJ might be withdrawn.  Accordingly, the Honourable Mr Justice Arnold ruled that the parties should submit further questions for him to approve before formally referring them to the ECJ.

The parties were expressly referred to and asked to consider the Honourable Mr Justice Arnold’s other decision of the same date: L’Oréal v eBay, before finally committing themselves to an ECJ reference.

The Judge refused Interflora’s request that M&S be injuncted from using INTERFLORA keywords until the full trial of this issue, ruling that Interflora had not moved quickly enough or consistently enough in this respect, to justify what was in effect a late interim injunction application.

Now, Interflora will no doubt have to endure the painful process of hoping that the ECJ answers the relevant questions quickly and effectively.