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24 March 2010
Google Adwords legality confirmed by EU Court
Serious implications for brand owners, keyword purchasers and service providers as EU Court of Justice confirms Google Adwords does not breach trade mark law.
In a long-awaited ruling, the Court of Justice of the European Union confirmed on 23 March, 2010 that Google's lucrative AdWords business does not breach trade mark law (Case C-236/08).
The case involved several parties, including Louis Vuitton, who objected to Google's sale of keywords of their major brand names to competitors or imitators, including in combination with terms such as 'imitation' or 'copy'. A visitor to Google who searches for these keywords will see an advertisement and a link to the website of the competitor or imitator in the "sponsored links" sections of the search results. If the visitor clicks on the link, the competitor or imitator pays a fee to Google.
The Court held that Google was not infringing trade mark rights by selling these keywords because Google does not use the brand or trade mark in its own commercial communication. Instead, Google merely allows keyword purchasers to use the trade marks without Google using them itself. There is no concept of contributory infringement in EU law like there is in the US and the Court did not take the opportunity to introduce one, so these activities of Google are not illegal.
The decision also held that keyword purchasers are not infringing trade mark rights so long as the advertisements which appear in the sponsored links are not misleading, vague or difficult to understand in terms of the origin or source of the goods or services in question.
This decision also dealt with Google's role as a service provider in storing and transmitting the content of the advertisements. If Google remains neutral in these activities, it has no knowledge or control of the content so it is not liable for it. However, Google could become liable if it takes an active role in those activities. In particular, the Court left it to the national courts to decide whether Google's activities in suggesting text for the advertisements meant that it took on an active role.
Niamh Hall, Trade Mark Attorney with FRKelly, notes:
"The decision obliges keyword purchasers to include a clear indication of the source or origin of the goods in their ads, which is an important advance for trade mark owners. Google and other providers of internet services will also have to be conscious that they may be liable for ad content, if they take an active role in that content. They will also have to implement a 'notice and take-down' procedure to promptly address infringements which are brought to their attention."
This has implications for other websites which have search functions and which display paid advertising content, including eBay, YouTube, Facebook, news agency websites etc. These businesses will now have to be conscious of their level of involvement in such advertisements - are they neutral or do they have an active role, for example in drafting the content of the advertisements? Google and other operators will also have to implement a prompt 'notice and take-down' procedure to avoid attracting liability when infringing advertisements are brought to their attention.
The details to be hammered out in future include whether the specific format of the Google AdWords offering requires any amendment, how the 'notice and take-down' procedure will work in terms of procedures, time limits and requirements of proof and the borderline for vague or opaque references as to origin in advertisements.
This decision still leaves the door open to trade mark owners to monitor these activities and demand action from Google in appropriate cases. However, the focus has now moved from whether the sale and purchase of a keyword is an infringement to the permissible use of that keyword.
Niamh Hall, FRKelly
