Brands Bulletin - STOP PRESS - Use of Google's AdWords program can constitute trade mark infringement

Welcome to an extra ‘hot off the press’ edition of Ashfords’ Brands Bulletin.

Rather than wait until the April edition, we thought our readers would like to be made aware of a very recent European Court of Justice case that has helped to clarify the legality of the sale to and use of trade marks as keywords by persons other than the trade mark owners.

Google, AdWords and Trade Mark Infringement
 
Many readers will be aware of the fact that Google operates a program called 'AdWords'. 

This program allows traders to purchase, amongst other things, the trade marks of their competitors as keywords.  If purchased, the traders' adverts are displayed in response to the typing of those keywords into Google’s search engine by an internet user.  Each time a user subsequently clicks through to such an advert, Google is paid in accordance with a price agreed beforehand (‘price per click’) with the trader.

Understandably, many trade mark owners resent the fact that Google sells their trade marks as keywords to their competitors.  They feel that Google should be under a legal obligation to police and prevent the misuse of their trade marks in this manner. They also feel that their competitors should be legally prevented from buying other people's trade marks as keywords.  

In three test cases, the European Court of Justice ("ECJ") was recently asked to decide on the legality of this practice. The cases concern keywords that correspond to registered trade marks.  The owners of the trade marks want to prevent the selection of these keywords by unrelated third party advertisers. They also want Google to stop displaying the third parties’ adverts in response to those keywords being typed into Google’s search engine, thus preventing websites for rival, or even counterfeit, products being displayed in the search results.

The million dollar question was whether the sale and/or use of a keyword, which corresponds to another's trade mark, can, of itself, be regarded as a use of that trade mark which requires the consent of its owner and, without it, trade mark infringement arises.

On 23 March, the ECJ handed down its judgment.  In summary, the Court decided that:

• the mere sale by Google to third parties of other businesses' trade marks as keywords does not constitute trade mark infringement by Google;
• the mere display by Google of a third party's advertisement, in response to an internet user typing in another business's trade mark as a search term, does not constitute trade mark infringement by Google ;
• however, if the advertisement displayed in response to the typing of those keywords into Google’s search engine 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 trade mark owner, or an undertaking economically connected to it or, on the contrary, originate from a third party (an 'Infringing Ad'), then this can constitute trade mark infringement by the advertiser;
• further, once Google is put on notice that a third party advertiser is displaying an Infringing Ad, it must act expeditiously to remove or disable access to the Infringing Ad, failing which it may be held liable; and
• also, if Google assists in the drafting of the third party's advertisement, or is involved in the selection of the keywords by the third party trader, then it might be held liable for contributing to trade mark infringement.

The message from the Court is clear - if you use another's trade mark as a keyword and, in response to an internet user typing in that keyword as a search term in Google, the advertisement that is displayed is misleading, you can be held liable for trade mark infringement.

Later this year, or next year, another case (Interflora v Marks & Spencer) is due to go before the ECJ concerning the AdWords program.  It should provide even greater clarity on the interaction between trade mark owners' rights and the legality of third party traders purchasing the trade marks of their competitors as keywords.   We will keep you updated of any developments in that case.    

Should you wish to receive further editions of the Ashfords' Brands Bulletin, please email  g.holmes@ashfords.co.uk       

Ashfords LLP is regulated by the Solicitors Regulation Authority. The information in this note is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.