Google AdWords

Trade mark infringement in relation to online advertising has been a hot topic of late. The question on the legality of the use of keywords corresponding to trade marks has been the subject of several lawsuits throughout the EU. Perhaps the highest profile of these has been the recent group of cases concerning a group of well known brand owners and Google France.

On 22 September 2009, the highly anticipated Opinion of the Advocate General Poires Maduro on the Google AdWords cases was delivered. The Cour de Cassation in France referred three linked cases to the Advocate General, involving Louis Vuitton Malletier SA; Viaticum SA & Luticiel SARL; and CNRRH, Pierre-Alexis Thonet, Bruno Raboin & Tiger SARL, against Google France (Google).

The questions referred by the French Court required the interpretation of trade mark infringement within the context of Article 5(1) of Directive 89/104 (First Council Directive to approximate the laws of Member States relating to trade marks "the Directive"), Article 9(1)(c) of Regulation No 40/94 (Community trade mark regulation) and an interpretation on "information society services" under the European Directive 2000/31 (Directive on electronic commerce).

How the AdWords system operates
Google operates a free internet search engine, which allows users to enter search terms for which they are presented with a list of "organic results". Alongside these results users will also find AdWords, which are advertisements with links to the advertisers’ sites. The AdWords system allows advertisers to purchase keywords, often trade marks of their competitors, so that their advertisements are displayed when users search for the relevant keyword. Similar systems are also operated by Google's primary competitors, Microsoft and Yahoo.

Questions referred from the French Court
The Advocate General was asked to determine whether Google's sale of brand names for internet search advertising ("AdWords") constituted a breach of the brand owner's rights and whether in turn brand owners could prevent the use of their trade marks by other advertisers on Google's AdWords system. In addition the Advocate General was required to consider whether Google could be exempt from liability as an information society service provider, who is not required to monitor information they transmit or store.


The Advocate General's Findings
When considering the above questions, the Advocate General remarked that it was important that a balance was struck between the interests of trade mark owners and freedoms of expression and commerce.

He suggested that Google had not infringed the rights of the trade mark owners concerned in operating its AdWords system, since the use of keywords by Google does not involve the sale of identical or similar goods to the public, and there can be no confusion on the part of consumers. While there may be a link between keywords corresponding to trade marks and sites advertised, the Advocate General did not find this alone was sufficient to constitute trade mark infringement. Internet users are aware of how search results are displayed and can distinguish between organic results and advertisements and would only formulate an assessment as to the origin of the goods or services on the basis of the content of the ads and by visiting the advertised site.

Accordingly the Advocate General found that Google's use of keywords did not constitute taking unfair advantage, or being detrimental to the distinctive character or repute of a trade mark. Other functions such as guaranteeing the quality of goods and services or those of communication, investment or advertising were also unaffected. In addition he also found that advertisers' use of AdWords corresponding to trade marks was not trade mark infringement.

On the issue of whether Google, in running its AdWords system, contributes to trade mark infringements by third parties is in itself infringement, the Advocate General concluded otherwise. He states:

"The claims of the trade mark proprietors would create serious obstacles to any system for the delivery of information. Anyone creating or managing such a system would have to cripple it from the start in order to eliminate the mere possibility of infringements by third parties...How many words would Google have to block from AdWords in order to be sure that no trade mark was infringed? And, if the use of keywords can contribute to trade mark infringements, how far would Google be from having to block those words from its search engine? It is no exaggeration to say that, if Google were to be placed under such an unrestricted obligation, the nature of the internet and search engines as we know it would change."

However this does not prevent brand owners seeking redress in an instance where they could point to specific instances of Google's contribution to illegal damage of their trade marks.

In reaching his conclusion the Advocate General commented "That absolute right of control would not take into account the particular nature of the internet and the role of keywords in it. The internet operates without any central control, and that is perhaps the key to its growth and success: it depends on what is freely inputted into it by its different users. Keywords are one of the instruments - if not the main instrument - by means of which this information is organised and made accessible to internet users. Keywords are therefore, in themselves, content-neutral: they enable internet users to reach sites associated with such words. Many of these sites will be perfectly legitimate and lawful even if they are not the sites of the trade mark proprietor.

Accordingly, the access of internet users to information concerning the trade mark should not be limited to or by the trade mark proprietor. This statement does not apply only to search engines such as Google’s; by claiming the right to exert control over keywords which correspond to trade marks in advertising systems such as AdWords, trade mark proprietors could de facto prevent internet users from viewing other parties’ ads for perfectly legitimate activities related to the trade marks. That would, for instance, affect sites dedicated to product reviews, price comparisons or sales of second-hand goods.

...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. Trade marks which have a reputation are entitled to special protection because of those functions but, even so, such functions should not be considered to be affected. Thus, the uses by Google may not be prevented even if they involve trade marks which have a reputation."

In relation to the issue of whether Google was exempt from liability as an information society service provider, the Advocate General commented that because Google has a direct pecuniary interest in internet users clicking on ad links, the liability exemption for hosts does not apply to the content featured in AdWords.

While the Advocate General's opinion appears to favour Google's position, it is not binding on the Court. The purpose of the opinions by Advocates General is to propose independent legal solutions to the cases for which they are responsible. Judgment of this case will be handed down at a later date.

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