A New Brand of Litigation
A version of this article was first published in Legal Week, 26 April 2010.
What do you do if you want to find your favourite brand, without having to shop around? More than likely you do an Internet search.
And, in this competitive market, what do you do if you want to reach consumers to tell them that your product is an alternative to the leading brand? More than likely you use keyword marketing to make sure your advert appears whenever someone does an Internet search for the leading brand.
Keyword marketing is just one of the ways in which the Internet has created new opportunities for advertising. However, it has also brought new legal challenges. Advertisers, search engines and brand owners all need to consider just how far the limits of trade mark law can be pushed where key word marketing using trade marks is concerned. A recent case before the European Court of Justice gives useful guidance on the subject, but leaves open as many questions as it answers.
Google, Louis Vuitton and Adwords
The case (Google France, Google Inc v Louis Vuitton Malletier (C-236/08), Google France v Viaticum Luteciel (C-237/08) and Google France v CNRRH and Others (C-238/08)) related to Google’s Adwords facility.
Advertisers who use Adwords marketing pay money to Google in return for their advert being displayed whenever a particular keyword is typed into an Internet browser. The keyword can, in principle, be someone else’s registered trade mark. Google’s Adword technology displays the adverts as “sponsored links”. When more than one advertiser wishes to use a particular keyword, the price each pays (by a bidding process) dictates how far up the list of sponsored links their advert appears.
In this case, Google had allowed advertisers to bid on keywords such as “Louis Vuitton”, which are registered trade marks. The brand owners objected, and argued that Google was infringing their trade marks.
The Court’s decision
The liability of advertisers
The Court held that advertisers may be liable for trade mark infringement, even if the brand owner’s registered trade mark is not used in the text of adverts, if Internet users perceive a “material link” to the trade mark owner’s goods or that the advert emanates from the trade mark proprietor. Advertisers can also be liable if they “seek to mislead” as to the origin of their goods.
However, the Court said that it is for national courts to decide whether any particular advert is the wrong side of the line.
For advertisers who use keyword advertising on the Internet, what is the wrong side of the line is far from clear, not least because there is no guidance as to what amounts to a material link or what sort of behaviour seeks to mislead. Different national Courts may well take different views. As the Judgment did not indicate who has the burden of proving that adverts are or are not misleading, there is clearly scope for debate on what is misleading, who has to prove it, and how, in any particular case.
Whether advertisers will be less willing to select trade marks as keywords remains to be seen. It will clearly be important for the text and presentation of adverts triggered by trade marked keywords to be clear as to their origin and as to what is on offer.
Brand owners will also need to remain vigilant over the use of their trade marks as keywords, and assess the impact of resulting adverts.
Google’s liability
The Court took the view that even though Google made money through its Adwords offering, it was not itself liable for trade mark infringement as it was not using the keyword trade marks in commercial communication. It did not matter that Google had created the technical infrastructure behind the Adwords programme, nor that it was being paid by advertisers.
However, the Court did not let Google off the hook completely. To the extent that it is allowing advertisers to infringe a trade mark, the Court made clear that Google’s activities have to be scrutinised under other “rules of law”.
This leaves open the possibility that search engines could be liable in certain cases as an intermediary, or under local laws relating to joint liability and the like.
The Court of Justice also looked at whether Google could benefit from a “safe harbour” under the E-Commerce Directive. Article 14 of the Directive protects “information society services” from liability where their involvement is as a “host” and their role is merely “technical, automatic and passive”, with no knowledge of or control over the hosted material. It is left to national courts to decide on a case by case basis whether search engines like Google are acting neutrally.
What is likely to be important is the role they play in suggesting or selecting keywords for advertisers, and in drafting the adverts which are triggered by the use of keywords. At the very least, search engines will need to review their keyword tools and the extent to which they actually have a hand in creating the text and presentation of adverts. There is also room for discussion as to whether search engines should themselves make it clear that sponsored link adverts are not necessarily those of the owners of a trade mark typed into a browser.
Search engines will also need to have clear policies concerning the take down of infringing material, and brand owners will need to utilise take down procedures consistently, as they can not only be effective, but also deprive search engines of the benefit of any safe harbour once on notice that infringing material is present.
Comment
This is a case which has plenty of food for thought for brand owners, advertisers and all those, like search engines and now social networking sites like Twitter, whose business models involve keyword marketing.
It will be interesting to see how various cases going through the Courts in the UK and elsewhere in Europe play out in the light of this Judgment. It will also be interesting to see whether there is any impact on advertisers’ appetite for keyword marketing, and the policies businesses put in place to deal with it.
Author:
Shireen Peermohamed