PARIS COURT OF APPEAL (POLE 5, CHAMBER 1), DECISION OF 2 FEBRUARY 2011, GOOGLE FRANCE SARL / AUTO IES SA, CAR IMPORT SARL, DIRECTINFOS COM SARL AND MR. P. BANEL

The decision of the Court of Appeal provides the most detailed application of the recent "AdWords" decision of the Court of Justice of the European Union (CJEU) in France.

Auto IES SA, a French company that sells cars on its website, owns several trademarks covering the terms "IES" and "AUTOIES" which designate, in particular, cars and car parts. In 2004, Auto IES became aware that, if Internet users entered the terms "AUTOIES," "AUTO-IES," "AUTO-IES," and "IES" into Google's search engine, the search results displayed under the heading "sponsored links", links to websites of competitors or to specialized referencing websites ("sponsored links").

Auto IES brought proceedings against these companies, claiming infringement of its trademark rights and unfair competition, and against Google France SARL (Google) on grounds of civil liability.

The Paris Court of First Instance upheld the claims.

On appeal, the Paris Court of Appeal referred to the recent "AdWords" decision of the CJEU1. In that decision, the CJEU had held that the question of whether the function of indicating origin was adversely affected by the display of a third party's advertisement on the basis of a keyword identical with a mark "depend[ed] in particular on the manner in which that [advertisement was] presented." There was only a trademark infringement, said the court, if the third party's advertisement "suggest[ed] that there [was] an economic link between that third party and the proprietor of the trademark" or "[was] vague to such an extent on the origin of the goods or services at issue that normally informed and reasonably attentive internet users [were] unable to determine, on the basis of the advertising link and the commercial message attached thereto, whether the advertiser [was] a third party vis-à-vis the proprietor of the trademark or (...) economically linked to that proprietor."

In the case at issue, the Court of Appeal made a detailed analysis of Google's search results page and the displayed advertisements in order to examine the claimed trademark infringement with regard to these criteria.  

The court considered that the regular results of a search are displayed in a column on the left and are immediately identifiable as such, whereas the sponsored links are displayed in a separate column on the right, thus enabling the reasonably attentive Internet user to establish a clear distinction between the information on the left and on the right. The in-depth examination of the search results page unequivocally revealed the advertising nature of the results in the sponsored links, in particular due to the absence of any reproduction of Auto IES's trademarks and the display of the advertiser's domain name.

The court concluded that there was no suggestion of an economic link between the advertiser and Auto IES, and therefore, no adverse effect on the function of indicating origin of Auto IES's trademarks. As a consequence, the court rejected the claims of trademark infringement and unfair competition practice due to the absence of likelihood of confusion. Consequently, the court also dismissed the claim for Google's liability.

In this decision, the Paris Court of Appeal for the first time dealt with the use of a trademark by AdWords' clients as a keyword, whereas other decisions following the CJEU's "AdWords" judgment had not been so detailed and only dealt with the liability of Google. Following the new decision, the legal framework of the "AdWords" dispute and debate seems to be settled in France. However, the question remains to what extent the function of indicating origin is adversely affected if the advertisement reproduces the plaintiff's trademarks.