Google has escaped liability for multiple claims of trade mark infringement through its AdWord application, much to the dismay of trade mark owners.
Google operates a paid referencing service called ‘AdWords’ which enables businesses to reserve “keywords” and appear as a sponsored link on a search results page. These sponsored links are displayed either on the right hand side of the results page or above the natural search results.
A fee for the referencing service is payable by the advertiser for each click and advertisers who reserve the same keyword are listed in descending order according to the amount paid to Google. To facilitate the AdWord application, Google set up an automated process for the selection of keywords and the creation of ads so that businesses have control over the text included on the sponsored link.
In 2008, various companies, including luxury goods producer Louis Vuitton Malletier SA, brought claims against Google for trade mark infringement under the AdWord application. Following appeals by Google, the French Courts subsequently sought clarity from the European Court of Justice (ECJ) on the following issues:
- Whether an owner of a trade mark is entitled to prevent a paid referencing (service such as the AdWords application) from displaying trade marks under Article 5(1)(a) and (b) and 5(2) of the Trade Marks Directive 89/104.
- Whether the AdWords application falls within the meaning of Article 14 of the E-Commerce Directive 2000/31 so that that Google could not be liable for illegal activity until it has been notified by the trade mark owner of the unlawful use of the sign by the advertiser.
In reviewing the facts the ECJ distinguished between the advertiser and Google as the internet service provider. The court concluded that whilst a trade mark owner could prevent an advertiser from using an identical or similar sign under on the AdWords application, the trade mark owner could not bring a claim against Google. The fact that Google had created software to enable advertisers to use a sign did mean that Google itself was using the sign.
In relation to the second issue, and whether Article 14 of the E-Commerce Directive applied to paid referencing services, the ECJ focused on Google’s role as the AdWord application provider. The ECJ concluded that the software created by Google to run the application meant that the information was processed automatically and knowledge of infringing trade marks could not therefore be assumed. The ECJ described Google’s role as merely technical, automatic and passive and Google could not therefore be liable for data which was stored unless, having obtained knowledge of the unlawful nature of the date, the service provider failed to act expeditiously.
As a result of the ECJ’s ruling, trade mark owners must now sue advertisers individually to combat trade mark infringement issues arising from the use of AdWords or similar services. This is likely to be a logistical nuisance given that each EU national court has leeway to decide what it is exactly that will constitute an infringement.
Only time will tell whether this ruling will have a serious impact on advertisers’ use of keywords. Perhaps an easier prediction for the time being, is the ability of Google to turn a blind eye to the infringing data stored within its ever-expanding crypt.