BACKGROUND

AdWords enables advertisements (sponsored links) to be displayed, in return for payment, alongside natural search results that appear in response to keywords. Keywords are words or terms that can be purchased by advertisers. When a keyword is entered into a search engine, a short advert is displayed in the "sponsored search" section of the engine’s webpage. The sponsored search section is separate from the natural search results section.

Three cases before the European Court of Justice (ECJ)— Google France & Google Inc v Louis Vuitton Malletier C- 236/08, Google France v Viaticum & Luteciel C-237/08 and Google France v CNRRH, Pierre-Alexis Thonet, Bruno Raboin & Tiger, franchisée Unicis C-238/08 23 March 2010 (unreported)—group together three references from the French Cour de Cassation. Case C-236/08 concerned the use of registered marks (Vuitton, Louis Vuitton and LV) as keywords without the consent of the proprietor, used to direct users to sites offering counterfeit products. Cases C-237/08 and C- 238/08 concerned the use of registered marks (Bourse des Vols, Bourse des Voyages and BDV; and Eurochallenges) without the consent of the proprietor as keywords purchased by third parties to direct users to competitors of the trade mark proprietors.

TRADE MARK INFRINGEMENT

The ECJ addressed the issue of infringement under Article 5(1)(a) of the Trade Marks Directive (89/104/EEC) and Article 9(1)(a) of the Community Trade Mark Regulation (40/94/EC), which apply where there is identity of marks and goods and services. The judgment considered the essential “badge of origin” function of the trade mark and the secondary functions of communication, investment or most importantly for the purposes of these disputes, advertising.

“Use” of the mark

The Court concluded that as the referencing service provider only creates the technical conditions necessary for the use of the sign, although it is paid for this service, it does not offer the service or goods itself, and is therefore not involved in the use of the mark in the course of trade.

The Court did find, however, that advertisers who purchase trade marks as keywords can be liable in certain circumstances for trade mark infringement.

Adverse effect on the essential function of indicating origin

The function of indicating the origin of the mark would be affected adversely if the advert did not enable normally informed and reasonably attentive internet users, or enabled them only with difficulty, to ascertain whether the goods or services referred to by the advert originated from the proprietor of the trade mark or an undertaking connected economically to it or, on the contrary, originated from a third party.

Adverse effect on the advertising function of the mark

The Court stated that this function was not affected adversely by the display of a third party's sponsored link and related advert triggered by the proprietor's mark. The Court recognised that even if the proprietor of a mark bought its own mark as a keyword, the price paid for the keyword would not ensure that the proprietor's sponsored link and advert would appear above those of its competitors (other purchasers of the keyword). Such factors alone, did not, in the Court's view, have an adverse effect on the advertising function of the mark. Moreover, in the Court's view, the proprietor of the mark would appear in the list of the natural results, usually in one of the highest positions on that list, such that the visibility to internet users of the goods or services of the proprietor of the trade mark was guaranteed, irrespective of whether or not that proprietor was successful in also securing the display, in one of the highest positions, of an advert under the heading "sponsored links".

THE E-COMMERCE DIRECTIVE

In relation to the hosting defence, the Court found that the referencing service provider could be liable if its activities were other than neutral, "in the sense that its conduct is merely technical, automatic and passive, pointing to a lack of knowledge or control of the data which it stores". Such activities would have to be assessed on their facts, although it is clear that if the referencing service drafted the contents of the sponsored link advert, it would be liable. Further, if the referencing provider failed expeditiously to take down an unlawful sponsored link advert on becoming aware of its unlawful nature, it would also be liable.

COMMENT

It appears that the Court has found a middle ground that protects the role of "referencing service providers" in allowing customers to use the internet to find relevant goods and services whilst penalising advertisers who attempt to mislead consumers by using a mark that is not their own.