Google France SARL and Google Inc v (1) Louis Vuitton Malletier SA (2) Viaticum SA and Luteciel SARL (3) Centre national de recherché en relations humaines (CNRRH) SARL and others (2010) Cases C-236/08 – C-238/08
The European Court of Justice (ECJ) has now delivered its long-awaited judgment in the Google Adwords trademark infringement case.
The statements of law made by the Court are set out below. In summary, it was found that the provision of the Google Adwords service and any other such services cannot be restrained by trademark owners on the basis that the service constitutes trademark infringement. This was because Google and any other such service providers were merely providing a facility (which may or may not be used to carry out trademark infringement). This was not the same as using a trademark in the sale of goods or services, which must be proven to establish trademark infringement.
It was also noted however that the use made of Google Adwords by an individual could potentially amount to trademark infringement.
Background
This was a combined hearing of three actions which raised the same questions about the legality of Google Adwords and other such advertising services (which the Court called advertising on internet referencing services).
The Google Adwords service was a service provided by Google, a company that operated an internet search engine. On the internet search engine, links to various websites were returned to the user on the basis of their relevance to the search terms entered. The more relevancy a particular website had to the terms entered, the higher up the list of websites returned it would appear. These sorts of results were called the natural search results.
In addition to the natural search results, there were sponsored links which appeared next to and above the natural links. These sponsored links would appear with a commercial message (advert) whenever the user searched for a term that corresponded to a trigger keyword that had been purchased by the advertiser. In the case of the Google Adwords service, more than one advertiser would usually have selected a particular trigger keyword. To determine where on the page the resulting advert would be displayed, Google would rank the advertisers on the basis of how much they were willing to pay for each click on the advert they received from users of Google, and on the ‘quality’ of their advert.
The disputes in question arose because keywords identical to registered trademarks were being used without the consent of the proprietors of the trademarks in question. The use of these signs triggered the display of advertising links to sites offering for sale goods or services identical or similar to those for which the trademarks were registered. The trademark owners wished to prevent Google from selling this sort of keyword to parties that did not own the rights to use the trademark in question.
The law was not clear on the question of whether the sale or purchase of this sort of keyword on Google Adwords amounted to trademark infringement and so it fell to the ECJ to clarify this legal grey area.
In particular, the Court would explore the following question:
Is a trademark proprietor entitled to prevent a third party from displaying or arranging for the display of an advertisement for goods or services identical with or similar to those for which the trademark is registered when a user types in a keyword identical or similar to the registered trademark?
The answer in the case of both individual advertisers and Google itself would require the trademark owner to overcome three hurdles. It would be necessary to show that, without consent:
- The party in question was using a sign identical or similar to the registered trademark in the course of trade;
- They were using the sign in relation to identical or similar goods or services; and
- They were using the sign in such a way that it was liable to damage the ability of the trademark owner to use their trademark as a trademark.
Individual advertisers
A sign is used in the course of trade when it is used in the context of a commercial activity operated with a view to economic advantage. An advertiser cannot dispute that, by pursuing the object of displaying an advertising link to the site on which he offers his goods or services, he is acting in the context of a commercial activity.
The next requirement is that the sign is used in relation to the goods or services in question. The Court found that such use is present where the advertiser either refers to the trademark in the text of the advert or only in the Google Adwords selected; and the trademark is being so used to offer an alternative to the goods or services of the trademark registration owner or present the goods or services of the trademark registration owner as being economically linked to those of the advertiser. In short, the use of a sign identical to a trademark registration in the context of advertisements on an internet referencing service can fall within the use in relation to goods or services requirement.
The third requirement considered was that the use of the sign must be liable to adversely affect the interests of the trademark owner in the sense that the trademark will no longer be able to function as a trademark. There are many functions associated with a registered trademark that the trademark owner is entitled to protect. The Court here focused on the function of the trademark as an indicator of the economic origin of the owner’s goods or services; and as an advertising tool designed to inform and persuade consumers.
With regards to the indicator of origin function, the Court held that this would be a question to be considered on a case-by-case basis. The basic principle was stated as being that an advert should be presented so that a normally informed and reasonably attentive internet user (this is an objective test and does not rely on the intelligence and sensibilities of any particular individual) should be able to identify the origin of the goods or services in question. If they are not able to tell whether the goods or services are those of the trademark registration owner or those of a competitor, or they are only able to answer this question with difficulty, then there is likely to be an adverse effect on the function of indicating origin (and possibly trademark infringement). Equally, if they are led to believe that the goods or services are being offered by a party economically linked to the trademark owner, then there is likely to be a detriment to the indicator of origin function and possibly trademark infringement.
With regards to the advertising function, the Court noted that the use by third parties of a trademark in Google Adwords or a similar referencing service would be liable to affect the manner in which the owner used their trademark as a factor in their sales promotion. In particular, a trademark owner would be required to pay more than its competitors to ensure that it achieved a position above those competitors in the sponsored links section for searches relating to their trademark. Even then, given the other factors that are taken into account in determining the ranking of Google Adwords results, the proprietor of the trademark registration could not be certain that they would appear above their competitors.
However, the Court also noted that the results from a referencing service such as Google Adwords will always appear alongside the natural results for that search engine. The natural results, being determined according to the relevancy of a particular page to the search entered by the user, would be likely to return a result displaying the website of the actual trademark proprietor near or at the top of the page. In such a case, the advertising function of the trademark would not be adversely affected.
Google and other internet referencing service providers
The Court took the view that Google was not carrying out activities constituting trademark infringement by offering the Adwords service, because it was not using the trademarks concerned in the course of trade.
A referencing service advertising provider such as the Google Adwords service is clearly operating a commercial activity when it stores keywords on behalf of its clients that are identical to registered trademarks and displays adverts when those keywords are entered into the search engine. However, such a service provider, whilst acting in the course of trade, is not using the trademark. They are merely making it available to the advertiser. Making it possible for an advertiser to make unauthorised use of a trademark in the course of trade is not the same as using that trademark. For this reason, the Google Adwords service could not be found guilty of trademark infringement. It was not necessary to consider the remaining two hurdles set out above, as the first had not been overcome.
The fact that the Google Adwords service was not using the trademarks in the course of trade meant that it was also protected from a trademark infringement claim on the basis that it was selling keywords such as ‘Vuitton imitation’; the selling of such phrases and making it possible for others to use those words was not the same as using them directly.
A final issue that was considered in relation Google and other internet referencing service providers was that of a possible defence to trademark infringement. Under the E-Commerce Directive in the EU, information society service providers such as Google can benefit from an intermediary defence, whereby they will not be liable for material stored on their servers if they have not played a role in the creation of that material and have no other knowledge and control over its contents. In the present case, that material was the drafting of the commercial message that accompanies a Google Adwords advert, or the selection of keywords. It would be for individual courts to determine on a case-by-case basis whether the referencing service provider could avail itself of such a defence.
The ECJ made these statements of law and referred the hearings back to the national courts that had originally made the reference.
Click here to read the ECJ judgment in full.
Click here to find out more about trademark infringement and sponsored link services such as Google Adwords.
Click here to register a trademark.