In a seminal ruling for Google and internet advertisers that use Google’s AdWords service, the European Court of Justice ruled that Google, in providing its AdWords service, does not directly infringe third party trade marks. However, advertisers that use Google’s AdWords service to direct traffic to their own websites may be engaged in trade mark infringement if they purchase keywords which represent trade marks of third parties and the use of such trade marks confuses average internet users as to the origin of the goods or services being advertised.
What is Google adwords?
AdWords is a paid referencing service operated by Google. The service allows its customers (advertisers) to reserve one or more keywords; once entered into the Google search engine these words generate an advertising link to the advertiser’s website. The results appear above or to the right of the natural search results and are displayed as sponsored links. There are no restrictions on the words that advertisers can reserve; an automated system allows advertisers to choose the words, draft a message to appear when the words are searched and provide a link to their website.
Is Google liable for trade mark infringement?
One of the key issues before the Court was whether referencing service providers such as Google can be held liable for trade mark infringement where keywords search results reproduce or imitate registered trade marks.
The Court determined that referencing service providers operate ‘in the course of trade’ when they permit advertisers to select, as keywords, words identical with trade marks, and then store and display the advertiser’s advertisements. However the Court was satisfied that they do not use ‘in the course of trade’ the selected trade marks so as to amount to infringement. Merely creating the technical conditions necessary for the use of a sign and being paid for that service does not mean that Google or other reference service providers offering such a service can be found to use the sign.
What about the advertiser?
The Court gave a more definitive ruling on the liability of the advertiser. The Court stated that when the advertiser purchases a keyword which is identical to another’s trade mark, it must be held that the advertiser is using the trade mark ‘in the course of trade’.
When an internet user enters the name of a trade mark as a search term they are looking for information relating to that trade mark. The Court determined that when advertising links to a competitor, the average internet user may perceive those links as offering an alternative to the goods and services of the trade mark proprietor.
On the question of infringement the Court focused on the perception an internet user will have on viewing the advertisement. If the advertisement seeks to mislead internet users as to the origin of the goods or services by making them believe that they originate from the proprietor of the trade mark, the advertiser may still be infringing the trade mark owner’s rights.
The Court stated that an advertiser may be held liable for infringement if a normally informed and reasonably attentive internet user cannot ascertain whether the goods or services referred to in the advertisement originate from the proprietor of the trade mark. Such determinations must be considered by the national courts on a case by case basis and would be dependant on the facts of the dispute before it.
Can Google ever be liable in this case?
The guidance the Court gave was that if the role played by the service provider is neutral, ‘its conduct is merely technical, automatic and passive, pointing to a lack of knowledge or control of the data which it stores’ then the service provider will not be held liable. However Google and other reference service providers may be liable if they become aware that the advertisements are unlawful and fail to act expeditiously to remove the offending advertisements.
Conclusion
This case does not provide trade mark owners with the desired result of preventing third parties form registering their trade marks as AdWords. However, Google’s apparent victory may prove to be hollow as advertisers may be more reluctant to purchase keywords comprising trade marks of their competitors following this ruling in fear of trade mark infringement proceedings. This is the first in what promises to be a series of cases that will help determine the effect of trade mark use on the internet.
