In an opinion which many may find quite political, Advocate General Poiares Maduro has delivered his views to the European Court of Justice (ECJ) in the Google AdWords references. The Advocate General's opinion relates to three separate sets of trade mark infringement proceedings, all of which have been referred to the ECJ by the French courts and all of which relate to Google's AdWords service.
In his opinion, Advocate General Poiares Maduro advises that Google does not infringe a trade mark either:
- by offering to advertisers, keywords (i.e. AdWords) which are identical to trade marks belonging to others; or
- by the display of its advertisers' advertisements when triggered by the entry of such keywords into its search engine by an internet user.
It is also his view that the advertiser/keyword purchaser does not infringe by the selection and purchase of such a keyword.
However the Advocate General took care to indicate that visible uses of the trade mark within the advertisement triggered by the keyword, or on the website linked to, may infringe. Furthermore were such an infringement by an advertiser established, it was a matter for national law whether or not Google could be held jointly liable for it. If Google was jointly liable then it would not be entitled to a mere "host" defence under Article 14 of the E-Commerce Directive.
Factual background to the opinion
'AdWords' is the name of Google's highly lucrative keyword service, which enables internet advertisements ("ads") to be displayed alongside natural search engine results, in response to keywords entered into the search engine by internet users. Ads typically consist of a short commercial message and a link to the advertiser's site. They are differentiated from natural search results on Google France's website by being presented under the heading 'lien(s) commercial (aux)', either at the top of the page, against a yellow background, or on the right hand side. Every time an internet user subsequently clicks on the ad's link, Google is remunerated in accordance with a price agreed beforehand ('price per click') by the purchaser of that keyword. Google's main competitors (Microsoft and Yahoo!) operate similar advertising systems.
The first set of proceedings (case C 236/08) relates to a dispute between Louis Vuitton Malletier SA ('LV') and Google. LV is the proprietor of the Community trade mark 'Vuitton' and the French national trade marks 'Louis Vuitton' and 'LV'. The national court established that all these marks enjoyed a "reputation" and that entering LV's trade marks into Google's search engine triggered the display of ads for sites offering counterfeit versions of LV's products.
The second dispute (case C 237/08) concerns a claim by Viaticum SA ('Viaticum') and Luteciel SARL ('Luteciel'), against Google. Viaticum and Luteciel are proprietors of the French trade marks 'bourse des vols', 'bourse des voyages' and 'BDV'.
The third dispute (case C 238/08) is between Mr Thonet and Centre national de recherche en relations humaines SARL ('CNRRH') and Google as well as Mr Raboin and Tiger SARL (the keyword purchasers). CNRRH is the holder of a licence for the French trade mark 'Eurochallenges', granted by Mr Thonet, the proprietor of that trade mark.
In both the second and third cases, the national court established that entering the trade marks into Google's search engine triggered the display of ads for sites offering identical or similar products. It also established that Google offered advertisers the possibility of selecting for that purpose keywords which corresponded to the trade marks. However the actual products sold on the advertised sites were competing products only and did not, of themselves, infringe the trade marks in question.
The Advocate General's opinions
The Advocate General's takes the view that there is no likelihood of consumer confusion by the display of advertisements triggered by the entry of keywords. This is not wholly surprising - there have been indications from the UK courts for several years along the same lines. Europe has yet to develop an "initial interest confusion" doctrine similar to that recognised in the US. However it should be noted that this conclusion seems to have stemmed from an untested assumption of how consumers perceive internet search results. It is doubtful whether the court should allow itself to express a conclusion on what is essentially a question of fact, particularly in the absence of evidence.
More surprising, was the Advocate General 's conclusion on the absence of harm to, or unfair advantage taking of, the reputation of the marks in issue (i.e. of the "image communicating function" of trade marks most recently acknowledged by the ECJ in the L'Oreal v Bellure case). Here the Advocate General made no real attempt to assess whether such effects would occur in the relevant circumstances. Rather he thought that it "should...be concluded that ...[such uses] do not affect [these] other functions of the trade mark" as, to conclude otherwise, would curtail the possibilities available to consumers to access the competitive internal market.
In his words :
"...trade mark proprietors do not have an absolute right of control over the use of their trade marks. The court played a determining role in establishing this, by holding that the interests of trade mark proprietors were not sufficient to prevent consumers from benefiting from a competitive internal market. [Reference was made by him here to key parallel import cases]. It would be paradoxical if the court were now to curtail the possibility for consumers to have access to those benefits, as internet users, via the use of keywords.
It should therefore be concluded that the uses by Google, in AdWords, of keywords which correspond to trade marks do not affect the other functions of the trade mark, namely guaranteeing the quality of the goods or services or those of communication, investment or advertising."
The Advocate General considered whether Google would have a mere "host" defence under Article 14 of the E-Commerce Directive to the charge of joint liability with the advertiser. He takes the view that, although Google is an information services provider in respect of both its AdWord service and its search engine service, only in respect of the latter was Google a neutral host. In respect of the former, Google had a commercial incentive to ensure that the most lucrative keyword ads were clicked upon. This disqualified Google from availing itself of this defence.
The Advocate General collated the various questions referred by the French courts in these disputes and suggested answers in the following terms:
- The selection by an economic operator [i.e. the advertiser/keyword purchaser], by means of an agreement on paid internet referencing, of a keyword which will trigger, in the event of a request using that word, the display of a link proposing connection to a site operated by that economic operator for the purposes of offering for sale goods or services, and which reproduces or imitates a trade mark registered by a third party and covering identical or similar goods, without the authorisation of the proprietor of that trade mark, does not constitute in itself an infringement of the exclusive right guaranteed to the latter under Article 5 of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks.
- Article 5(1)(a) and (b) of Directive 89/104 and Article 9(1)(a) and (b) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark must be interpreted as meaning that a trade mark proprietor may not prevent the provider of a paid referencing service [i.e. Google or other keyword service provider] from making available to advertisers keywords which reproduce or imitate registered trade marks or from arranging under the referencing agreement for advertising links to sites to be created and favourably displayed, on the basis of those keywords.
- In the event that the trade marks have a reputation, the trade mark proprietor may not oppose such use under Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94.
- The provider of the paid referencing service [i.e. Google or other keyword service provider] cannot be regarded as providing an information society service consisting in the storage of information provided by the recipient of the service within the meaning of Article 14 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the internal market.
It is clear that the Advocate General's opinions are strongly influenced by a view that the balance between the public interests in, on the one hand, free competition and, on the other hand, the economic benefits derived from strong trade mark protection should fall largely in favour of the public interest in free competition. It remains to be seen whether the ECJ will agree.