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Google's Ad Words Lawsuits Worldwide

 

Introduction

Keyword advertising is an essential revenue stream for search engines. Several lawsuits threaten this revenue model and could cut into the revenue streams of Google, Yahoo, and others. This page covers the development of lawsuits against Google in Germany, France and the USA.

What exactly are Google's adwords? They are a quick and simple way to purchase highly targeted cost-per-click (CPC) advertising, regardless of your budget. AdWords ads are displayed along with search results on Google, as well as on search and content sites in our growing ad network, including AOL, EarthLink, HowStuffWorks, & Blogger.... When you create a Google AdWords ad, you choose keywords for which your ad will appear and specify the maximum amount you're willing to pay for each click. You only pay when someone clicks on your ad"

And where is the legal problem? Google's AdWords service allows advertisers to sponsor particular search terms. Whenever that term is searched the advertiser’s link will appear next to the search results. A company can choose a trademark protected term as keyword. So if you enter "trademark protected term" in the Google search box and hit "Search", you would get listings from advertisers who paid for placement with this keyword. Google puts those listings off to the right side of the screen, clearly marked as ads. Trademark owners are concerned about their brand awareness and insist that this behaviour violates their trademarks.

What does Google think about it? Google's FAQ states: "As a provider of space for advertisements, we cannot arbitrate trademark disputes between advertisers and trademark owners. As stated in our Terms and Conditions, advertisers are responsible for the keywords and ad text that they choose to use. We encourage trademark owners to resolve their disputes directly with our advertisers, particularly because the advertisers may have similar advertisements on other sites. As a courtesy, we are willing to perform a limited investigation of reasonable complaints. When we receive a complaint from a trademark owner, our review is limited to ensuring that the advertisements at issue are not using the trademarked term as a keyword trigger. If they are, we disable those keywords from the ad campaign...."

In its SEC filings Google commented on the lawsuits:

"Companies have also filed trademark infringement and related claims against us over the display of ads in response to user queries that include trademark terms. The outcomes of these lawsuits have differed from jurisdiction to jurisdiction. A court in France has held us liable for allowing advertisers to select certain trademarked terms as keywords. We have appealed this decision. We were also sued in Germany on a similar matter where a court held that we are not liable for the actions of our advertisers prior to notification of trademark rights. We are litigating similar issues in other cases in the U.S., France and Germany.

 In order to provide users with more useful ads, we have recently revised our trademark policy in the U.S. and Canada. Under our new policy, we no longer disable ads due to selection by our advertisers of trademarks as keyword triggers for the ads. As a result of this change in policy, we may be subject to more trademark infringement lawsuits. Defending these lawsuits could take time and resources. Adverse results in these lawsuits may result in, or even compel, a change in this practice which could result in a loss of revenue for us, which could harm our business."

I personally don't believe that Keyword advertising does confuse consumers because consumers don't expect that the ads are connected to the trademark. But we will have to wait and see what the courts say.

Google's Ad-Words (German / English)

 

AdWords Lawsuits in Europe - Where do we stand at the beginning of 2008

Germany 

Despite several lower and higher regional court decisions in Germany there is no legal certainty yet. The German Federal Court of Justice (BGH) is expected to issue a decision on AdWords in 2008, hopefully bringing the many year long discussion to an end. In 2006, the BGH has held that the use of a trademark as a metatag constitutes trademark infringement. Even if the trademark itself is not displayed there can be a trademark use. Following the Meta-Tag decision, German courts mainly argue if metatags and keyword should be treated equal. Finding and reasoning differ. In my opinion there is no trademark infringement, if the advertisement is labelled as such and the trademark itself is not displayed in the ad (see Ott, MMR 2007, 123 f.).

Click here for a list of AdWords related lawsuits in Germany!

My German Links & Law Blog features the latest developments in this area! For more information in German also see this article!

 

Austria

In 2007 the Supreme Court of Austria held that the use of a trademark as a keyword infringes the rights of its owner, if the ad appears above the search results (advertisers can't choose between above and on the right side of the search results...) using the trademark as header (it is unclear if this citation of the trademark had an impact on the decision...). The decision has also been criticised for confounding arguments from trademark and unfair competition law. The court had reasoned that users could get the wrong impression that the advertiser is closely related to the owner of the trademark.

You can find the decision (in German) at http://www.linksandlaw.de/urteil175-haftung-adwords-oesterreich.htm.

 

United Kingdom

Following the reasoning in the Reed Executive plc v. Reed Business Information decision (for more information see Update 37) it is unlikely that keyword advertising constitutes trademark infringement or the common law tort of passing off (Please note: There is no unfair competition law in the UK).

 

France 

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.).

 

Netherlands

According to the Amsterdam Court of Appeal (Portakabin v. Primakabin, Decision of December 14, 2006) advertisers are allowed to use a trademark as keyword, at least when

- the use is in connection with the resale of the relevant branded product and

- the link in the ad leads directly to the subpage on which the branded products are offered for sale, and not to the homepage.

In all other cases... ???

 In 2006 the Amsterdam District Court had held that Google's practice of broadmatching did not raise any trademark concerns.

 

AdWords and the ECJ - New developments 2009

A number of national courts around Europe have already requested preliminary rulings from the European Court of Justice on a number of the issues arising out of Google Adwords:

  • Case C-236/08 (Google France v Louis Vuitton Malletier), Reference from the Cour de Cassation:
    "(1) Must Article 5(1)(a) and (b) 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) and (b) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark 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 infringing goods is using those trade marks in a manner which their proprietor 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 of the storage of information provided by the recipient of the service, within the meaning of Article 14 of Directive 2000/31 of 8 June 2000, 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, Reference from the Cour de Cassation:
    "(1) Must Article 5(1)(a) and (b) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks 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 [Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark], may the provider of the paid referencing service be regarded as providing an information society service consisting of the storage of information provided by the recipient of the service, within the meaning of Article 14 of Directive 2000/31 of 8 June 2000, 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, Reference from the Cour de Cassation:
    "(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 which reproduces or imitates 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 First Council Directive 89/104/EEC of 21 December 1988?
    (2) Must Article 5(1)(a) and (b) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks 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 [Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark], may the provider of the paid referencing service be regarded as providing an information society service consisting of the storage of information provided by the recipient of the service, within the meaning of Article 14 of Directive 2000/31 of 8 June 2000, 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-278/08 Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmüller GmbH v Günter Guni and trekking.at Reisen GmbH, Reference from the Austrian OGH:
    "(1) Must Article 5(1) of the First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks ('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?
     

  • Case C-558/08 Portakabin Ltd v Primakabin BV, Reference from the Hoge Raad der Nederlanden:
    "(1)(a) Where a trader in certain goods or services ('the advertiser') avails himself of the possibility of submitting to the provider of an internet search engine an adword [when advertising via the internet, it is possible to pay to use 'adwords' on search engines such as Google. When such an adword is keyed into the search engine, a reference to the advertiser's website appears either in the list of webpages found, or as an advertisement on the right-hand side of the page showing the results of the search, under the heading 'Sponsored links'] which is identical to a trade mark registered by another person ('the proprietor') in respect of similar goods or services, and the adword submitted - without this being visible to the search engine user - results in the internet user who enters that word finding a reference to the advertiser's website in the search engine provider's list of search results, is the advertiser 'using' the registered trade mark within the meaning of Article 5(1)(a) of Directive 89/104/EEC? 
    (1)(b) Does it make a difference in that regard whether the reference is displayed in the ordinary list of webpages found; or in an advertising section identified as such? 
    (1)(c) Does it make a difference in that regard whether, even within the reference notification on the search engine provider's webpage, the advertiser is actually offering goods or services that are identical to the goods or services covered by the registered trade mark; or whether the advertiser is in fact offering goods or services which are identical to the goods or services covered by the registered trade mark on a webpage of his own, which internet users (as referred to in Question 1(a)) can access via a hyperlink in the reference on the search engine provider's webpage? 
    (2) If and in so far as the answer to Question 1 is in the affirmative, can Article 6 of Directive 89/104, in particular Article 6(1)(b) and (c), result in the proprietor being precluded from prohibiting the use described in Question 1 and, if so, under what circumstances? 
    (3) In so far as the answer to Question 1 is in the affirmative, is Article 7 of Directive 89/104 applicable where an offer by the advertiser, as indicated in Question 1, relates to goods which have been marketed in the European Community under the proprietor's trade mark referred to in Question 1 or with his permission?
    (4) Do the answers to the foregoing questions apply also in the case of adwords, as referred to in Question 1, submitted by the advertiser, in which the trade mark is deliberately reproduced with minor spelling mistakes, making searches by the internet-using public more effective, assuming that the trade mark is reproduced correctly on the advertiser's website?  
    (5) If and in so far as the answers to the foregoing questions mean that the trade mark is not being used within the meaning of Article 5(1) of Directive 89/104, are the Member States entitled, in relation to the use of adwords such as those at issue in this case, simply to grant protection - under Article 5(5) of that directive, in accordance with provisions in force in those States relating to the protection against the use of a sign other than for the purposes of distinguishing goods or services - against use of that sign which, in the opinion of the courts of those Member States, without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark, or do Community-law parameters associated with the answers to the foregoing questions apply to national courts?"
     

  • Case C-91/09 Eis.de GmbH v BBY Vertreibsgesellschaft mbH, Reference from the BGH:
    "Is there use for the purposes of Article 5(1)(a) of Directive 89/104/EEC where a third party provides as a keyword to a search engine operator a sign which is identical with a trade mark, without the consent of the proprietor of that trade mark, so that, on inputting the sign identical with the trade mark as a search term into the search engine, an electronic promotional link to the third party's website advertising identical goods or services appears in an advertising block set apart from the list of search results, that link is marked as a sponsored link and the advertisement itself does not comprise the sign nor contain any reference to the trade mark proprietor or to the products it is offering for sale?"
     

  • The High Court in London has not issued its questions yet.

 

 

 

Overview

Introduction

Lawsuits in France

Lawsuits in the USA

Lawsuits in Germany

Lawsuits in the Netherlands

 

Search Engine Law Overview

 

Latest News - Update 71

Legal trouble for YouTube in Germany

Germany: Employer may google job applicant

EU: Consultation on the E-Commerce-Directive

WIPO Paper on tradmarks and the internet

The ECJ and the AdWords Cases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Masthead/Curriculum Vitae
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All Rights Reserved.

 

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