Keywords again -- but this time Google's not a party

The IPKat has just taken a look at Case C-278/08 Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmüller GmbH v Günter Guni and trekking.at Reisen GmbH, a reference for a preliminary ruling from the Oberster Gerichtshof (Austria) dating back to June 2008 but sadly unobserved by most European trade mark-watchers. This reference wasn't even given the dignity of an Advocate General's Opinion -- a sure sign that the Court of Justice doesn't think it's a very hard one to resolve.

So what happened here? It's another AdWords case, involving Google's "paid referencing service" which enables any economic operator, by means of the reservation of a keyword, to place a link to its own advertisement which is flagged as a "sponsored link", when the user of its search engine employs that keywords as a search term, in addition to the "natural results" of the search which the user gets irrespective of whether the keyword is an AdWord.

BergSpechte owns the figurative mark featured top-right in this post, which is registered in Classes 25 (clothing), 39 (travel services) and 41 (various teaching, entertainment and sporting services). Another company, trekking.at Reisen, competed with BergSpechte in providing ‘outdoor’ tours. That company purchased ‘Edi Koblmüller’ and ‘Bergspechte’ as AdWords that generated the appearance of its own advertisements as sponsored links. BergSpechte sought and obtained an interim injunction from the Landesgericht Wels and protective measures were imposed on trekking.at Reisen, prohibiting it from directing users to its own home page by a link on the pages containing lists of hits obtained using internet search engines by entering the search terms ‘Edi Koblmüller’ and/or ‘Bergspechte’. The action eventually reached the Austrian Oberster Gerichtshof (Supreme Court) which referred the following questions for a preliminary ruling:

"1. Must Article 5(1) of the ... Council Directive 89/104 ... be interpreted as meaning that a trade mark is used in a manner reserved for the proprietor of the trade mark if the trade mark or a sign similar to it (such as the word component of a word and figurative trade mark) is reserved as a keyword with a search engine operator and advertising for identical or similar goods or services therefore appears on the screen when the trade mark or the sign similar to it is entered as a search term?

2. If the answer to Question 1 is yes:

(A) Is the trade mark proprietor's exclusive right infringed by the utilisation of a search term identical with the trade mark for an advertisement for identical goods or services, regardless of whether the accessed advertisement appears in the list of hits or in a separate advertising block and whether it is marked as a 'sponsored link'?

(B) In respect of the utilisation of a sign identical with the trade mark for similar goods or services, or the utilisation of a sign similar to the trade mark for identical or similar goods or services, is the fact that the advertisement is marked as a 'sponsored link' and/or appears not in the list of hits but in a separate advertising block sufficient to exclude any likelihood of confusion?"

This morning the Court of Justice ruled as follows:

"Article 5(1) ... must be interpreted as meaning that the proprietor of a trade mark is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with or similar to that trade mark which that advertiser has, without the consent of that proprietor, selected in connection with an internet referencing service, goods or services identical with those for which that mark is registered, in the case where that advertising does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or by an undertaking which is economically connected to it or, on the contrary, originate from a third party".

This ruling relates only to the first referred question since the Court concluded that an answer the second would not be useful for resolving the underlying dispute. The Court's position here is unsurprising in light of Tuesday's ruling in Google (see here and here), which it cites as authority. Indeed, if you think you might be suffering from déjà vu, you might note the similarity between the paragraph above and the first paragraph of the Court's Google ruling.

The Google AdWords ruling: some comments on today's three cases

Here are some early comments on today's decision by the Court of Justice of the European Union in the three cases referred by the French Cour de Cassation for a preliminary ruling (noted by the IPKat here).

"European Court of Justice rules in Google’s favour" is the conclusion of the Official Google Blog. According to Dr Harjinder S. Obhi, Senior Litigation Counsel, EMEA,

"... Today, the Court confirmed that Google has not infringed trade mark law by allowing advertisers to bid for keywords corresponding to their competitors’ trade marks. It also confirmed that European law that protects internet hosting services applies to Google’s AdWords advertising system. This is important because it is a fundamental principle behind the free flow of information over the internet.

Our guiding principle has always been that advertising should benefit users, and our aim is to ensure that ads are relevant and useful. We will study the decision as we move forward in order to make sure that we continue to deliver advertising that is perceived as both valuable and relevant by our users".

The Wall Street Journal Blog sees the ruling not so much as a win for Google as a pain for trade mark owners -- but good news for the legal profession:

"Overall this is good news for Google, which will continue to see rival companies trying to outbid each other for popular adwords, analysts say. It is also good news for intellectual property lawyers who are going to have to handle a flurry of cases".

The Hindu Business Line reminds readers that this is just a preliminary ruling, but that vast sums are at stake:

"While the case will be referred back to France, it's an important victory for Google — there have been several conflicting decisions on similar cases across Europe so clarification from the ECJ will be welcome.

While Google doesn't specify the revenues that Adword brings in each year, advertising is by far the biggest contributor to its annual revenues – contributing 96.7 per cent of the $23.7 billion in revenues the company made in 2009".

English law firm Shoosmiths was quick off the mark with its assessment that all was not quite as well for Google as might at first blush seem to be the case, together with some practical advice for brand-owners:

"... ‘liability to [Google] may be limited’, but ... on a case-by-case basis, the role of the ‘referencing service provider’ (in this case Google) must be considered.

If that role is purely automatic, technical, and passive, pointing to a lack of knowledge or control, then the provider cannot be held liable. However, if Google has knowledge of the unlawful nature of the activities, and it has failed to act expeditiously to remove or disable accesses, then it may be liable.

We think that this may lead to the following:

* Google will require advertisers to confirm whether they have permission to use the AdWord, and will clearly differentiate rights holders from unauthorised users of trade marks;
* Google will immediately remove or disable any AdWord which it is informed to be unlawful.

We therefore suggest that rights holders take a close look at search engines by carrying out searches for their products and/or brands, then write to businesses that have purchased their trade marks as AdWords or similar; and to Google, requesting that the AdWord or similar is removed or disabled".

Echoing a more cautious view was the New York Times' Technology section, entitled "Europe Says Google Can Sell Trademarks but at a Risk of Suits".

Another perceptive comment comes from Sheldon Klein and his colleagues at Arent Fox:

"One may question the CJ’s finding that Google’s AdWords program is merely technical, automatic and passive in nature. One significant open question for the European national courts to consider seems to be the degree to which Google’s “Keyword Suggestion Tool” negates the company’s “service provider” exemptions by placing it in a more active role with its advertising clients. Certainly, Google will still need to act diligently when it is provided with information about trademark infringement".

Gareth Dickson (Ashurst) has been extensively monitoring the early US response. He identified two points of significance:

"The first is that most of the non-party quotes come from lawyers based in London (where Google's policy is unlikely to change as a result of this ruling) and not France (where Google's policy might well change). ... The second is that while both Google and LVMH claimed victory this morning, LVMH's (NASDAQ) shares are up almost 1.5% while Google's (NASDAQ) shares dropped sharply when the markets opened this morning and have continued to drop throughout the day. As I write this, they are down just over 2.25%. No doubt the largest proportion of this movement is attributable to the anticipated impact of Google's move away from direct interfacing with the Chinese market, but I also wonder whether the lack of a clear "win" for Google on the Art. 14 point is being seen as having negative implications for the (lucrative) YouTube arm of their business".

Breaking news: Court of Justice rules on sale and use of AdWords

Hot off the press, the IPKat brings you news of this morning's ruling in Joined Cases C-236, 237 and 238/08 Google France, Google Inc. v Louis Vuitton Malletier; Google France v Viaticum Luteciel; Google France v CNRRH Pierre‑Alexis Thonet Bruno Raboin Tiger, a franchisee of Unicis. The factual backgrounds of the three cases, all of which have been referred from the French Cour de Cassation, are as follows:

Case C‑236/08 Google France, Google Inc. v Louis Vuitton Malletier

It was established at trial that (i) entering Louis Vuitton’s trade marks into Google’s search engine triggered the display of advertisements for sites offering counterfeit versions of that company’s products and that (ii) Google offered advertisers the possibility of selecting, to that end, not only keywords which corresponded to Louis Vuitton’s trade marks but also those keywords in combination with expressions denoting counterfeit such as ‘imitation’, ‘replica’ and ‘copy’. These facts led to Google being held liable trade mark infringement, a decision which was upheld on appeal. Google thereupon appealed on points of law to the Cour de cassation. That court referred for a preliminary ruling the following three questions:

‘(1) Must Article 5(1)(a) and (b) of [Directive 89/104] and Article 9(1)(a) and (b) of [Regulation No 40/94] be interpreted as meaning that a provider of a paid referencing service [ie Google] who makes available to advertisers keywords reproducing or imitating registered trade marks and arranges by the referencing agreement to create and favourably display, on the basis of those keywords, advertising links to sites offering infringing goods is using those trade marks in a manner which their proprietor [in this case Louis Vuitton] is entitled to prevent?

(2) In the event that the trade marks have a reputation, may the proprietor oppose such use under Article 5(2) of the directive and Article 9(1)(c) of the regulation?

(3) In the event that such use does not constitute a use which may be prevented by the trade mark proprietor under the directive or the regulation, may the provider of the paid referencing service 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], so that that provider cannot incur liability until it has been notified by the trade mark proprietor of the unlawful use of the sign by the advertiser?’

Case C‑237/08 Google France v Viaticum Luteciel

Viaticum and Luteciel own French trade marks ‘bourse des vols’, ‘bourse des voyages’ and ‘BDV’. It was found at trial that, (i) by that entering Viaticum and Luteciel’s trade marks into Google’s search engine, the display of advertisements for sites offering identical or similar products was triggered and that (ii) Google offered advertisers the possibility of selecting for that purpose keywords which corresponded to those trade marks. However, the products sold on the advertised sites did not infringe those trade marks in question since they bore trade marks attributed to competitors of Viaticum and Luteciel. Google was held liable for trade mark infringement and, on appeal, of being an accessory to trade mark infringement. Google thereupon appealed to the Cour de cassation, which has referred two questions to the Court for a preliminary ruling.

‘(1) Must Article 5(1)(a) and (b) of [Directive 89/104] be interpreted as meaning that a provider of a paid referencing service who makes available to advertisers keywords reproducing or imitating registered trade marks and arranges by the referencing agreement to create and favourably display, on the basis of those keywords, advertising links to sites offering goods identical or similar to those covered by the trade mark registration is using those trade marks in a manner which their proprietor is entitled to prevent?

(2) In the event that such use does not constitute a use which may be prevented by the trade mark proprietor under the directive or [Regulation No 40/94], may the provider of the paid referencing service 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], so that that provider cannot incur liability before it has been informed by the trade mark proprietor of the unlawful use of the sign by the advertiser?’

Case C‑238/08 Google France v CNRRH Pierre‑Alexis Thonet Bruno Raboin Tiger, a franchisee of Unicis

CNRRH is the holder of a licence for the French trade mark ‘Eurochallenges’, granted by Mr Thonet, the proprietor of that trade mark. At trial it was established (i) that entering ‘Eurochallenges’ into Google’s search engine triggered the display of advertisements for sites offering identical or similar products and (ii) that Google offered advertisers the possibility of selecting such a term as a keyword for that purpose. As in the second reference, the products offered on those sites did not infringe that trade mark and have been attributed to competitors. At trial. Google, Raboin and Tiger were held liable trade mark infringement, a decision which was upheld on appeal. Google and Tiger then filed separate appeals before the Cour de cassation, which referred three questions to the Court for a preliminary ruling.

‘(1) Does the reservation by an economic operator, by means of an agreement on paid internet referencing, of a keyword triggering, in the case of a request using that word, the display of a link proposing connection to a site operated by that operator in order to offer for sale goods or services, and reproducing or imitating a trade mark registered by a third party in order to designate identical or similar goods, without the authorisation of the proprietor of that trade mark, constitute in itself an infringement of the exclusive right guaranteed to the latter by Article 5 of [Directive 89/104]?

(2) Must Article 5(1)(a) and (b) of [Directive 89/104] be interpreted as meaning that a provider of a paid referencing service who makes available to advertisers keywords reproducing or imitating registered trade marks and arranges by the referencing agreement to create and favourably display, on the basis of those keywords, advertising links to sites offering goods identical or similar to those covered by the trade mark registration is using those trade marks in a manner which their proprietor is entitled to prevent?

(3) In the event that such use does not constitute a use which may be prevented by the trade mark proprietor under the directive or [Regulation No 40/94], may the provider of the paid referencing service 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], so that that provider cannot incur liability before it has been informed by the trade mark proprietor of the unlawful use of the sign by the advertiser?’

The Advocate General advised the Court to rule as follows:

(1) The selection by an economic operator, 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 ... to approximate the laws of the Member States relating to trade marks.

(2) Article 5(1)(a) and (b) of Directive 89/104 and Article 9(1)(a) and (b) of Council Regulation (EC) No 40/94 ... 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 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.

(3) 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.

(4) The provider of the paid referencing service 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 (‘Directive on electronic commerce’).

In other words, said the Advocate General, it's not a trade mark infringement to buy, sell or use an AdWord -- but anyone offering a keyword sale service can't rely on the "I'm just an innocent information carrier and you can't blame me" exemption for liability in relation to the content of hosted information.

Today the Court of Justice has ruled as follows:

1. Article 5(1)(a) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks and Article 9(1)(a) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark must be interpreted as meaning that the proprietor of a trade mark is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with that trade mark which that advertiser has, without the consent of the proprietor, selected in connection with an internet referencing service, goods or services identical with those for which that mark is registered, in the case where that advertisement does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party.

2. An internet referencing service provider which stores, as a keyword, a sign identical with a trade mark and organises the display of advertisements on the basis of that keyword does not use that sign within the meaning of Article 5(1) and (2) of Directive 89/104 or of Article 9(1) of Regulation No 40/94.

3. 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 (‘Directive on electronic commerce’) must be interpreted as meaning that the rule laid down therein applies to an internet referencing service provider in the case where that service provider has not played an active role of such a kind as to give it knowledge of, or control over, the data stored. If it has not played such a role, that service provider cannot be held liable for the data which it has stored at the request of an advertiser, unless, having obtained knowledge of the unlawful nature of those data or of that advertiser’s activities, it failed to act expeditiously to remove or to disable access to the data concerned.

This post will be followed by a further post later, with comments on this ruling.

Wikipedia entries on AdWords and Keywords

What Google says about AdWords here

How to profit from Google AdWords here

Opinion of Advocate General Luís Miguel Poiares Pessoa Maduro here
IPKat comment on the Advocate General's Opinion here

Links and Law here