There has been a lot to do about the use of keywords in search engines on the Internet. By a decision rendered on 23 March 2010, the European Court of Justice (ECJ) sheds some light on some of the many questions which have arisen since the use of keywords started.

Uncertainty exists as to who is actually using the keywords, and how the various uses are to be qualified from a trade mark law point of view. In case of Google's AdWords, should Google be considered to be the user, as the supplier of the AdWords? Or is it the advertiser, either as the purchaser of the AdWord or as the originator of the linked ad in which it is used? Or could it be the internet consumer who types in the AdWord for his search? And also, is offering advertisers the possibility of selecting AdWords which correspond to a trade mark infringing use? Google's position in the keyword story is the main subject of three French cases which the Cour de Cassation referred to the ECJ.

The facts of the cases (C-236/08, C-237/08 and C-238/08)

The three French cases are between Google and (i) Louis Vuitton, (ii) Viaticum/Luteciel and (iii) CNRRH e.a. In the first case it has been established that entering Louis Vuitton's trade marks into Google's search engine triggered the display of ads for sites offering counterfeit versions of its products. In the second as well as the third case, it has been established that entering the relevant trade marks into the Google search engine triggered the display of ads for sites offering identical or similar products from competitors.

Questions

Although the questions from the Cour de Cassation are formulated somewhat differently, they mainly concern the interpretation of Article 5(1) of the (Trade Mark) Directive 89/104.

The two most important questions are:

  1. does the use by Google, in its AdWords advertising system, of keywords corresponding to trade marks, constitute an infringement of those trade marks?
  2. does the use by advertisers, in AdWords, of keywords which correspond to trade marks, constitute trade mark infringement?

Opinion of Advocate General Poiares Maduro (A-G Maduro)

In his opinion, issued on 22 September 2009, A-G Maduro stated, in summary, that neither Google nor the advertisers infringe any trade mark rights by the selection of AdWords. The subsequent display of the ads is, however, different, but not the subject of the present cases. A-G Maduro's main concern was that the advertisers' selection of AdWords can take place for many legitimate reasons (e.g. purely descriptive uses, comparative advertising, product reviews), which would be precluded if the selection of an AdWord would constitute, in itself, trade mark infringement.

Decision of the ECJ

The ECJ did not follow it’s A-G on all points. The ECJ does share the opinion that Google does not actually use the signs in the course of trade. The advertisers, however, do use the signs they selected as an AdWord in the course of trade because the AdWord has the object and effect of displaying an advertising link to their site on which they offer goods or services for sale. Moreover, the advertisers also use the sign in relation to their own goods and services (even if they do not mention the sign in the linked ad) in the situation where they have selected the AdWord with the aim of offering internet users an alternative to the goods or services of that proprietor of the mark.

According to the ECJ, Article 5(1)(a) means that the proprietor is entitled to prohibit an advertiser from using (without its consent) its mark as AdWord for advertising identical goods or services in the case where that ad does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods/services originate from the proprietor of the mark or an undertaking economically connected to it or, on the contrary, originate from a third party. It is for the national court to assess on a case-by-case basis whether this is the case. In that regard it is also important to note that the ECJ is of the opinion that the situations listed as exceptions in Article 6 and 7 Directive 89/104 (such as exhaustion of the proprietor's rights in case of second-hand goods) can still prevent the proprietor to prohibit the use of its mark.

Conclusion

Several courts in EU countries (amongst which The Netherlands (case C-558/08), see our Newsflash of 29 December 2008) have submitted prejudicial questions to the ECJ regarding this type of advertising, all with different factual backgrounds. These questions mainly relate to the use of the keywords by the advertisers, rather than Google. Although it appears that Google is off the hook, we will have to wait for the ECJ's decisions in the other reference proceedings, to see if and how the various types of advertisers can use a trade mark in their ads or on their websites, through making use of them as a keyword. The first of these decisions is expected this Thursday 25 March 2010 in the Austrian case Bergspechte Outdoor Reisen/trekking.at Reisen c.s. (C-278/08).