TRADEMARK HIJACKINGS

Your Brand As A Search Term

ATTENTION BRAND OWNERS: Is your brand being hijacked and used by a 3^rd Party as a search engine term?

Following a landmark European Court of Justice (ECJ) decision in the “Google AdWords” case (Google France SARL, Google Inc. (C-236/08 to C-238/08), 23 March 2010), we would strongly advise you to find out.

Background – Natural vs Sponsored Links

When typing a search term into a search engine (such as Google, which alone is responsible for processing approximately 90% of the World’s search queries), the search engine responds by returning a list of sites which appear best to correspond to the search term, in decreasing order of relevance. These responses are known as “natural” results.

In addition to these natural results, the search engine also displays “sponsored” links that are relevant to the term searched.

For example, a search for “Computer” on www.google.co.uk will show “About 746,000,000 results”, with a Wikipedia entry at the top of the pile, in addition to “sponsored links” or paid adverts above and to the right, from Apple, Dell and others. Next to each link will appear a few lines of slightly more descriptive text, which the advertisers hope will encourage you to follow the link. The sponsors pay Google a ‘maximum price per click’ for each sponsored link and the search engine will rank each sponsored link in order; highest to lowest max. price per click, the number of previous clicks on the link, and the quality of the sponsor’s advertisement.

Sponsored Links and Trademarks

If your search term is also a trademark (TM), the problem from the TM owner’s point of view is that users might then click through to the 3^rd party website – and not to the TM owner’s website – to buy their products or services.

Instances of this form of TM infringement have led to TM owners taking court action against Google and against the sponsors using their brands as sponsored links. A number of these cases were referred by the French and Austrian national courts to the ECJ, which answered the following key points:

1) Is Google primarily liable for TM infringement on the grounds that it stores the TMs as search terms, and profiting from that storage?

The ECJ ruled a clear ‘no’. (Article 5 of Trade Marks Directive, 89/104 states that for a party to be said to have infringed a TM, they must themselves have used that TM.) By creating the technical environment for 3^rd parties to use TMs, Google is not itself “using” the TM, even if it was profiting from the activity.

2) Are 3^rd party advertisers liable for TM infringement, on the grounds that they select the TM as a key word and use it to generate sponsored links to websites offering identical goods and services?

The ECJ responded that 3rd party advertisers could potentially be liable, “in the case where the advert does not enable the average internet user, or enables that user only with difficulty, to ascertain whether the goods and services referred to therein originate from the proprietor of the TM or an undertaking economically connected with it or, on the contrary, originate from a 3rd party”.

So, the question to ask is whether “the average internet user” is under the impression that the goods or services advertised in a sponsored link come from the TM holder or someone “economically connected” with them e.g. an exclusive agent or a TM licensee. The ECJ did not specify the exact phases advertisers should use, so this area is still slightly grey. However, the presumption is that by clearly labelling the sponsored link as a separate, 3^rd party brand, this is enough avoid confusion.

3) Can Google rely on a defence under Article 14 of the E-Commerce Directive (2000/31), which states that the provider of an “information society service” cannot be held liable for data which is stored at the request of a user?

Under Art. 14, ISPs have a defence to claims in defamation for comments published by users through their services. Correspondingly, do sponsored links constitute an “information society service”, falling into this protected category? The ECJ answered yes, provided that the service provider has not (a) equipped the user with the knowledge of or control over the stored data and (b) removed or disabled access to the data as promptly as possible, if it becomes aware of the unlawful activities. In other words, a search engine could be liable if it is given notice of an advert that infringes a TM and then fails to act quickly to remove it.

Conclusion

Despite what appears to be a successful outcome from the brand owners’ and Google’s perspective, the rulings were not quite as definitive as they could have been and the door is still open for litigation between brand owners and their competitors who continue to use their TMs as search terms. The main question is whether and how the advertisers sufficiently distinguish the competitor from the “Real McCoy”? For the answer to this question, we will need to wait a little longer, perhaps for the ECJ or the national courts to determine, or as is often the case with the web, for the informal online practices to become more established codes of conduct.

If you have own a TM that is being infringed either as a Google Adwords, or otherwise and would like a consultation with a member of our Media Law Team, please contact us on 020 8209 0166. If you prefer, you can contact us by email at [email protected].

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