AdWords Lawsuits in France - Trademarks as keywords illegal?

1. Advertisers in France should not use trademark protected terms as keywords. The Court of Nanterre, the Court of Paris, the Court of Appeal of Versailles - all have found that advertisers committed a trademark infringement. Only the Court of Strasbourg (decision of July 20, 2007, Atrya vs. Google and K par K/Techni Feneres) has stressed the initial function of a trademark to distinguish a product or a service and to associate it to a specific origin and found no trademark infringement. Nethertheless the court deemed the use of the trademark to be unfair competition (parasitism based on the profiting of the well known brand of a competitor). So far no French court held the use of trademark protected keywords to be legal!

2. As for the liability of search engines, courts in France differ on the reasoning. According to the Court of Nanterre Google is an active trademark infringer. The mere fact of suggesting the infringement by using the mark as proposed keyword is enough. The court of Paris in contrary underlines that Google does not use the trademark for identical or similar products / services in a commercial manner. So there is no trademark infringement. But nethertheless Google's conduct was not deemed legal. Google's liability was based on the common civil principle of fault (Section 1382 of the Civil Code) due to the lack of preliminary control to check whether chosen keywords do infringe third party rights. The Court of Strasbourg, (decision of July 20, 2007, Atrya vs. Google and K par K/Techni Feneres) took into account technical measures implemented by Google (a filter and links to check third parties' rights) and excluded Google's liability on all grounds. This is the most recent decision from France and the first to exclude a search engine from liability in an Adword related lawsuit! It remains to be seen if other courts adopt the approach of the Court of Strasbourg.

3. According to the Cour d'Appel de Paris, French courts have no jurisdiction if the incriminated ads lead only to websites owned by companies established outside France and appear only on google.co.uk, google.de and google.ca, but not on google.fr. (decision of June 6, 2007, Google Inc. and Google France v. Axa et al, CRI 2007, 155 ff.).

III. ECJ: Advocate General says use of trademarks as keywords is ok! (October 2009)

Google is before the European Court of Justice (ECJ) in connection with a French case in which a number of companies, including Louis Vuitton complained that Google had infringed their trademark rights by allowing advertisers to use company trademarks as keywords. The winner in the latest round: Google. An adviser to Europe�s highest court said that Google�s controversial practice was not illegal under European law. Google mays allow advertisers to select the keywords and also display ads for searches involving the keywords.

The opinion contains some interesting statements on the questions whether there is a likelihood of confusion or not:

"86. By comparing ads with natural results, the parties assume that natural results are a proxy for �true� results � that is to say, that they originate from the trade mark proprietors themselves. But they do not. Like the ads displayed, natural results are just information that Google, on the basis of certain criteria, displays in response to the keywords. Many of the sites displayed do not in fact correspond to the sites of the trade mark proprietors.

87. The parties are influenced by the belief to which I referred at the outset � that if an internet user seeks something in Google�s search engine, the internet user will find it. However, that is not a blind belief; internet users are aware that they will have to sift through the natural results of their searches, which often reach large numbers. They may expect that some of those natural results will correspond to the site of the trade mark proprietor (or an economically linked undertaking), but they will certainly not believe this of all natural results. Moreover, sometimes they may not even be looking for the site of the trade mark proprietor, but for other sites related to the goods or services sold under the trade mark: for example, they might not be interested in purchasing the trade mark proprietor�s goods but only in having access to sites reviewing those goods.

88. Google�s search engine provides help in sifting through natural results by ranking them according to their relevance to the keywords used. There may be an expectation on the part of internet users, based on their assessment of the quality of Google�s search engine, that the more relevant results will include the site of the trade mark proprietor or whatever site they are looking for. However, this is nothing more than an expectation. Confirmation only comes when the site�s link appears, its description is read, and the link is clicked on. Often the expectation will be disappointed, and internet users will go back and try out the next relevant result."

Trade marks which have a reputation enjoy special protection as compared with ordinary trade marks: their use can be prevented not only in relation to identical or similar goods or services, but also in relation to any good or service that takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. This special protection for trade marks which have a reputation does not depend on there being a risk of confusion on the part of consumers. But still, no trademark violation by Google, because:

"106. The question raised by the present cases is whether freedom of expression and freedom of commerce should also take precedence over the interests of the trade mark proprietors in the context of Google�s uses of keywords which correspond to trade marks. Those uses are not purely descriptive; (56) nor do they constitute comparative advertising. However, in a manner comparable to such situations, AdWords creates a link to the trade mark for consumers to obtain information that does not involve a risk of confusion. It does so both indirectly, when it allows the selection of keywords, and directly, when it displays ads.

107. Google�s uses of keywords which correspond to trade marks are independent of the use of the trade mark in the ads displayed and on the sites advertised in AdWords; they are limited to conveying that information to the consumer. Google does so in a manner which can be said to intrude even less on the interests of the trade mark proprietors than purely descriptive uses or comparative advertising. As I shall develop shortly, that point emerges more clearly if one reflects how absurd it would be to allow sites to use a trade mark for purely descriptive uses or comparative advertising, but not to allow Google to display a link to those sites. I believe, therefore, that the same principle should apply: given the lack of any risk of confusion, trade mark proprietors have no general right to prevent those uses."

See Computer Weekly, ZDNet and for a first legal analysis Outlaw and Joris van Hoboken.

In my opinion, it's too early for Google to celebrate. The Advocate General's opinion definitely is a huge victory, but the European Court of Justice still has to follow it. It often does, but e.g. last year in another internet law case, where it had to decide whether a service provider operating exclusively on the Internet is under an obligation to communicate its telephone number to clients prior to the conclusion of a contract, it did not (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62007J0298:EN:HTML). The discussion about the use of trademarks as keywords has been going on for nearly a decade now, it has produced more than 100 judgements world-wide and uncountable articles on the subject and still, the Advocate General came up with some new legal considerations. I would expect some further surprises in the European Court of Justice judgement, although I find it likely that Google will win again.

So let's assume Google is not infringing trademark rights by allowing advertisers to buy keywords: In June 2009, Google has liberalized its trademark policy in 190 countries to conform it to its policy in the US, Canada, Ireland and the UK. Google does not block the sales of trademarked keywords in these countries. It is very likely that following a victory in the Adword lawsuit Google will liberalize its trademark policy in the EU member states, too. Maybe with one - at first sight surprising - exemption: France. No court there sided with Google in the AdWords lawsuits, although some found that Google did not commit a trademark violation. Instead they based Google's liability on the common civil principle of fault (Section 1382 of the Civil Code, which provides that "Any act whatever of man, which causes damage to another, obliges the one by whose fault it occurred, to compensate it.") So French courts might still find a way around a Google friendly decision by the European Court of Justice and there might be one more battle ahead for Google in France.

There is one more important point of the Advocate General's opinion, that is hidden in Footnote 72: We have an ongoing discussion in many EU member states about the liability of search engines for search results that lead to infringing content. The Advocate General says, that in his opinion a search engine may fall under the liability exemption provided in respect of "caching" in Article 13 of the E-Commerce-Directive 2000/31. That would pretty much exempt search engines from liability. If the European Court of Justice would side with this opinion, this would be another important victory for search engines. But this point has no importance for the outcome of the AdWords lawsuits, so it remains to be seen if the ECJ makes some obiter dictum statements.

The civil court in Nanterre fined Google 75,000 euros for allowing advertisers to link text internet advertisements to trademarked search terms and gave the company 30 days to stop the practice. In the trademark case, the owner of the name "Bourse des vols" (Market for Flights) wanted Google to stop allowing competitors to include "Bourse des vols" as a term that would generate an advertisement and link to their own site. The decison is available here!

In March 2005 Google's French subsidiary lost its appeal. The court in Versailles, west of Paris, found that Google was guilty of "trademark counterfeiting" and ordered it to pay the damages originally awarded to French travel companies Luteciel and Viaticum. The search engine must now pay �75,000 (US$100,000) in fines and legal costs.

But according to the decision, Google has no general obligation to monitor the keywords their customers choose, but Google must be able to prohibit the use of illicit keywords such as those infringing trademarks. In this case, the court thought that Google knew or should have known the marks of the defendant companies. But even if Google had legitimately not been aware of the fact that trademark protected terms had been used, Google has been notified of the fraudulent use of the key words and had the duty to put an immediate and full stop to such infringement.

Also see: Speer, Lawrence, French Trademark Ruling Against Google Keyword Advertising Upheld on Appeal, Electronic Commerce & Law Report 2005, 296-297

Louis Vuitton successfully sued Google and its French subsidiary for trademark infringement. Allowing competitors to run ads triggered by Louis Vuitton's trademark terms was deemed to be counterfeiting, unfair competition and misleading advertising. Google was ordered to pay 280.000 � in damages and court costs to Louis Vuitton and to stop displaying advertisements for Vuitton's rivals whenever Internet users typed Vuitton's name. Plaintiff even presented evidence that Google had not only allowed keyword combinations that associate plaintiff's protected marks with terms including "imitation, fake, copies" etc. to be purchased, but that the AdWord program actually proposed the terms to would-be advertisers. The Paris court ruling against Google Inc. applies to all its sites, not just its French Google.fr page.

Louis Vuitton Malletier / Google, Civil Court of Paris (TGI), February 4, 2005

In June 2006 The Paris Court of Appeals agreed with the February 2005 decision by a Paris district court that found Google guilty of trademark counterfeiting and unfair competition and advertising. The Paris court increased the Vuitton damages to allocate for the case (�300,000) and other legal expenses (�75,000).

Also see: Speer, Lawrence, Google Infringed Designer's Mark By Selling Similar Search Engine Keywords, Electronic Commerce & Law Report 2005, 150

Also see: Speer, Larence, Use of Hotels' Marks as Keywords Deemed Infringing by French Court, Electronic Commerce & Law Report 2005, 93

The verdict in the main procedure opposing Soci�t� des H�tels M�ridien and Google France was handed down on March 2, 2006. The Nanterre court of first instance held that Google France has committed acts of trademark infringement within the meaning of articles L 713-2-a and L 713-3-b of the Intellectual Property Code. The court ordered Google to

The court also sentenced Google France to pay to the plaintiff the sum of 150.000 � in compensation for the infringement.

A similar judgment by the Tribunal de Grande Instance de Nanterre was issued on 17 January 2005: Overture has been held legally liable because the judge considered Overture's ad booking tool, which suggests to customers keywords which promise to be successful, also encouraged advertisers to chose keywords that were trade marks belonging to Accor (with the suggested keyword hotel, the online service informed its customers of other possible keywords such as "Hotel Formule 1", "Hotel Ibis", "Hotel Mercure", "Hotel Accor"). Overture was ordered to pay damages of 200 000 euros and to publish the judgment on its website.

Also see: Speer, Larence, Use of Hotels' Marks as Keywords Deemed Infringing by French Court, Electronic Commerce & Law Report 2005, 93

Das Tribunalgericht im franz�sischen Nanterre �bt sich in einer Art ausgleichender Gerechtigkeit. Nachdem gerade erst Google verurteilt wurde, muss jetzt auch der Konkurrent Overture eine Niederlage einstecken.