Tuesday, 23 March 2010

ECJ judgement on using trademarks in Adwords

Here's my very quick review of the implications of the ECJ's decision (press release here, full judgement here) on  Louis Vuitton v Google.

Google isn't 'using' the mark, so Google's role kind of irrelevant:

Para 58:
"... a referencing service provider [=Google] is not involved in use in the course of trade within the meaning of the abovementioned provisions of Directive 89/104 and of Regulation No 40/94"

But the advertiser is:

Para 73:
"It follows from all of the foregoing that use by an advertiser of a sign identical with a trade mark as a keyword ... falls within the concept of use ‘in relation to goods or services’ within the meaning of Article 5(1)(a) of Directive 89/104."

But trademark owner still needs to show adverse effect from use of the mark:

Para 76:
"It follows from that case-law that the proprietor of the mark cannot oppose the use of a ... mark if that use is not liable to cause detriment to any of the functions of that mark"

For example, confusing users about the origin of the goods would be adverse effect:

Para 84 & 88
"The function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive internet users, ... to ascertain whether the goods or services ... originate from the proprietor of the trade mark ... or ... originate from a third party. ... (para 88) It is for the national court to assess ... whether [there exist] adverse effects"

So that's important for advertisers: if you are using a keyword to confuse users about the origin of the goods or services you sell, that's probably an infringement

Simply out-bidding the trademark owner might look like infringement, because it affects the "advertising function of the mark":

94 ... the proprietor of the mark must pay a higher price per click ... to ensure that its ad appears before those of those operators which have also selected its mark as a keyword. 

But it isn't:

95      Nevertheless, those repercussions of use by third parties of a sign identical with the trade mark do not of themselves constitute an adverse effect on the advertising function of the trade mark.

Because the mark owner probably gets top placement in the natural search results anyway:

97:  the advertising page of the proprietor of that mark will appear in the list of the natural results, usually in one of the highest positions on that list ... means that the visibility ...  is guaranteed, irrespective of whether or not that proprietor is successful in also securing the display ... of an ad under the heading ‘sponsored links’.

(That seems misguided and confused: being top of natural results could still leave you three spots below competing bidders.)

So: Google is off the hook, but advertisers aren't. As ever with this long-running issue, we need more case law to determine whether or not it is a trademark infringement if you bid on a competitors trademark to display your own wares.

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