Brand owners are likely to be unimpressed by Google’s latest update to its AdWords program, which gives purchasers of third party trademarks increased prominence for their ads. The change, which is already in operation, means “organic” search results will be pushed further out of view by sponsored ads, whose format now looks like some categories of organic results. Continue reading »
A District Court in New York has become the latest to find that using a competitor’s trademark in Google’s AdWords program can be trademark infringement. District Judge Roslynn R. Mauskopf found that the Defendants’ selection of “PILLOW PETS” and similar marks as a trigger for Google Ads is likely an infringement of the Plaintiff’s registered trademarks “MY PILLOW PETS” and “IT’S A PILLOW, IT’S A PET”, and granted Plaintiff’s motion for a preliminary injunction. The case is CJ Products LLC v. Snuggly Plushez LLC, 11-CV-0715 (RRM)(SMG), NYLJ 1202512398696, at *1 (EDNY, Decided August 22, 2011). Continue reading »
Microsoft has recently tested a new system of advertising whereby ads are not placed on top of the organic search results, nor to the side, nor on a colored background, but actually within the list of organic results. Is this a smart move? Will Microsoft find itself on the end of a (meritorious) lawsuit for trademark infringement or unfair competition? Probably not. Continue reading »
While the Wall Street Journal (initially, at any rate) declared outright victory for Google’s AdWords service after the Court of Justice of the European Union (“ECJ” or “CJEU”) ruled that the sale of keywords to advertisers did not constitute “use” of those keywords within the meaning of the Trade Marks Directive (89/104/EEC), most of us were more cautious from the outset.
For my own part, I wrote in the World Trademark Review that Continue reading »
In his January 25, 2011 decision in the Central District of California, District Court Judge George H. King held that the targeted use of a third party’s trademark in a Google AdWord advertising campaign can constitute trademark infringement and can also leave advertisers open to an award of enhanced damages, attorneys fees and costs. (Binder v. Disability Group, Inc., Case no. cv 07-2760-GHK)
The holding is a warning to advertisers that Google’s (current) placement and color of ads is insufficient by itself to avoid trademark infringement. Accordingly, care must be taken to ensure that such ads are carefully worded, particularly since it appears that the infringed trademark in Binder was not even in the text of the offending ads.
In relation to the trademark infringement claim under 15 U.S.C. § 1114(1)(a), the Court noted:
“Moreover, ‘[i]n the context of the Web in particular, the three most important Sleekcraft factors [the 'Internet trilogy'] are (1) the similarity of the marks, (2) the relatedness of the goods or services, and (3) the simultaneous use of the Web as amarketing channel.’ GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1205 (9thCir.2000).”
The Court found a “strong” likelihood of confusion due to the strength of Plaintiff’s mark, identity of the marks, identity of services and identity of commercial channels (i.e. the Internet). Accordingly, the Plaintiff’s registered marks were found to have been infringed by the Defendants’ AdWords ads. There was also evidence of actual confusion among users viewing Google’s search results (which the Court described as the result of the Defendants’ “deception”), though the Court notes that evidence of actual confusion was not necessary.
The Court also held that the Defendants’ use of Plaintiff’s trademarks as part of their AdWords campaign meant they were also liable for false advertising under 15 U.S.C. §1125(a), saying:
“Defendants used Plaintiff’s mark in their advertising campaign through Google to market their business in a manner that was likely to confuse potential clients and that decieved potential clients into thinking they were being led to Plaintiff’s website”. [Emphasis added.]
The indication is that the Defendants’ wrongful act was the very leading of users to their website, and was not in any way dependent on what appeared on said website.
The Court held that the Defendants’ intentional use of their competitor’s registered marks amounted to willful misconduct and a “deliberate intent to deceive”. Accordingly, the Court awarded enhanced damages under 15 U.S.C. § 1117(a) in the amount of double the Plaintiff’s lost profits.
Furthermore, the Court held that this type of trademark infringement is the sort of “exceptional” infringement referred to in the Lanham Act, and awarded the Plaintiff additional orders of attorneys’ fees and costs. The Court also found one of the Defendants’ officers personally liable since he had “directed, authorized or participated in” the infringement. In a small victory for the Defendants, the Court declined Plaintiff’s claim for prospective corrective advertising costs, citing the passage of time (the judgment came a little over four years after the last infringement) and a lack of specificity in Plaintiff’s pleadings. So make sure to start claims sooner rather than later.
Finally, the Court left the door open for a future litigant to argue that the failure of a mark owner to preemptively register their mark with Google (to prevent its selection as an AdWord) meant the owner has failed to mitigate its losses. The argument failed in Binder partly because the evidence presented by the Defendant was vague, but the Court didn’t completely rule out the possibility that it could apply on different evidence (though it seems unlikely).
The full decision can be read below.
Binder v. Disability Group
I’ve been enjoying some discussion with another AdWords specialist (Austrotrabant) over Google’s recent policy changes and the meaning of the CJEU’s Google France and subsequent decisions. Please go on over to http://austrotrabant.wordpress.com/2010/08/05/google-adwords-tm-policy-use-of-the-trademark-also-permitten-in-the-ad-text-of-ads-in-europe/ to have a look.
In the meantime, I’ve posted my comments below as they are fairly self-contained and might be of interest. I’ll work out standalone posts for these topics when I get some free time!
I agree – the policy has been liberalised to allow use of the trade mark in the body of the ad. I think this was inevitable given the ECJ’s affirmations of what constitutes “use” under the Trade Marks Directive. Whether it is wise to adopt this change before other causes of action have been decided (e.g. unfair competition, passing off) is debatable and time, no doubt, will tell. Given the ECJ’s exhoneration of Google, I don’t think it will matter whether or not the ad is permissible under arts 6 and 7. To put it another way, I think Google is trying to put arts 6 and 7 into layman’s terms (and will only (usually) refer to their policy as the standard for investigating an ad, not least because they won’t want to be seen to be exercising too much control over them) but I’m not convinced that their interpretation is right post-Portakabin. Perhaps Portakabin’s effect on those defences is a subject for another time and place.
I have another concern, particularly from a reseller’s point of view, in that I wonder whether Google has adopted the wrong test for confusion. Google’s standard, as set out above, is whether an ad is “confusing as to the origin of the advertised goods and services”; the ECJ / Art 6 ECD standard is confusion as to “on whose behalf a commercial communication which is part of an information society service is made”. A reseller could satisfy Google’s test but still fail the Art 6 ECD test. What do you think?
The Art 6 test I referred to is from the ECD, not the TMD. I should have made that clearer. It comes from Google France and the way the ECJ got around to describing why “vague” ads *must* be found to have an adverse effect on a TM’s essential function. The reasoning is as follows:
At para 86 of Google France, the ECJ states that the Art 6 requirement (that the origin of an electronic commercial communication be clearly identifiable) is applicable “in the display of advertisements on the internet”. This confirms, or rather restates, that Art 6 gives European Internet users more protection from advertising than is given to consumers who are exposed to advertising on other forms of media.
The Court ends para 86 saying that Art 6 “lays down the rule that the natural or legal person on whose behalf a commercial communication which is part of an information society service is made must be clearly identifiable”. This is a good point to ask why the Court is talking about Art 6 at all. Either: (1) it is a separable, standalone obligation; (2) it is helpful in getting the Court to its answers to the referred questions; or (3) we will be told it’s irrelevant. Since the Court doesn’t dismiss it, and since Art 6 is not found in the referred questions, the fact that the Court doesn’t discuss issues unnecessarily (e.g. BergSpechte, paras 42-44) means the Court refers to it because it has at least some relevance to determing what constitutes infringement under Art 5(1)(a), i.e. what constitutes an adverse effect on a registered trade mark’s functions.
In para 87, the Court makes its first statement that a TM owner can prohibit an (electronic) ad based on the public’s perception of the origin of the ad rather than specifically of its goods and services (although of course they will be a significant factor elsewhere in the assessment), saying that the “proprietor must be entitled to prohibit the display of third-party ads which internet users may erroneously perceive as emanating from that proprietor”.
The “which” in para 87 refers to the third-party ads, not the goods and services they advertise, meaning that the right to prohibit certains ads comes from a finding that internet users will think the *ad* is coming from the proprietor, regardless of what else they know about the goods / services are being resold etc (which is consistent with my reading of Portakabin, in particular in relation to the relevant defenses).
The Court then uses para 88-90 to wrap up its discussion, with para 88 providing the (uncontroversial) general statement that the national Court must decide if the essential function is affected, and paras 89 and 90 providing instructions for two (non-exhaustive) instances in which the national Court *must* find a likelihood of confusion.
Para 89 is the obvious case scenario: if the national Court decides that the ad suggests an economic link (no criteria specified), the national Court *must* find an adverse effect.
Para 90 addresses a less obvious case: if a national Court finds, on the basis of an ad in its entirety (and presumably in the context as described in para 85), that it is “vague” as to whether the *advertiser* is a third party or is economically linked to the TM proprietor, the conclusion *must* also be that there is an adverse effect.
Although Art 6 could have some application to the para 89 sceanrio, it is unnecessary there. There is, however, a very nice parallel (as well as textual proximity) between the discussion over an electronic commercial communication that is “vague” as to who is repsonsible for it and the statement that such communications must “clearly identify” the person on whose behalf they are made.
Although I think it could have been stated more clearly in the ECJ judgment, it seems that, rightly or wrongly, Art 6 has introduced a new threshold to govern online TM use, beyond which a TM properitor can act. You could think of Art 6 as having created a legal presumption that legislators felt was appropriate when they drafted the ECD (a less Internet-savvy time, shall we say!). The presumption goes as follows: electronic ads which do not clearly identify the advertiser responsible for them (national Court question) are presumed to make average Internet users (as they were understood by the legislators of the ECD) unable to discern the origin of the ad – and therefore, so the presumption goes, of the goods and services offered – so that the essential function of the mark being used is adversely effected. I haven’t read it yet, but is that consistent with the Austrian Court’s June finding in BergSpechte?
I’m not sure that this reflects reality (the Rosetta Stone AdWords case (Eastern District of Virginia, April 29, 2010) says consumers aren’t confused by sponsored ads), but that appears to have been the intention of Art 6 when it was drafted.
By going back to basics and focusing on the intention of the legislators, the ECJ also appears to have opted for a less expansive reading of Section 4 ECD as well (the safe harbours). I’m looking forward to the arguments that will follow on those questions!
Google has put an end to its controversial Keyword “Suggestion” Tool after the CJEU ruled that it might not benefit from the exemptions from liability found in the E-Commerce Directive. It also appears to have modified its remaining services to protect the “LOUIS VUITTON” trademark, but continues to allow advertisers to sully other luxury brands by offering obviously detrimental words such as “fake” and “replica”.
Google’s Keyword Suggestion Tool has been a source of controversy since its inception. In a nutshell, advertisers, regardless of their aims or track record, could use the Keyword Suggestion Tool to determine how popular other keywords were, so that they could add those keywords to ones already chosen for their advertising campaign. Where an advertiser had selected a generic term (such as “suitcases”), Google might suggest that they also use a trademark (such as “SAMSONITE”); where the advertiser had selected a trademark (such as “LOUIS VUITTON”) Google not only suggested obvious nouns such as “bag”, but also suggested words such as “imitation” and “copy”.
In defending Louis Vuitton’s suit against them in France, Google said it didn’t matter whether they were liable since their acts were automatically excused by Section 4 of Europe’s E-Commerce Directive, in particular Article 14 (the “hosting” safe harbor).
Court surprises Google by ruling that it may be held to account for helping advertisers to sell fakes after all
The French court asked the CJEU to clarify the scope of Article 14. The Court duly obliged, holding that only the “mere technical, automatic and passive” acts of an intermediate service provider would be excused by Article 14. This interpretation is not what Google had asked for, and is considerably narrower than the equivalent provisions of section 512 of the US Digital Millennium Copyright Act, which have been given a broad interpretation in Viacom v. YouTube (albeit only in the District Court so far). See further the discussion of Article 14 and Recital 42 here. Having given its interpretation of Article 14, the CJEU then instructed Paris that:
- “it is necessary to examine whether the role played by that service provider is neutral, in the sense that its conduct is merely technical, automatic and passive, pointing to a lack of knowledge or control of the data which it stores” (paragraph 114);
- “it is apparent … that, with the help of software which it has developed, Google processes the data entered by advertisers and the resulting display of the ads is made under conditions which Google controls. Thus, Google determines the order of display according to, inter alia, the remuneration paid by the advertisers” (paragraph 115);
- “the role played by Google in the drafting of the commercial message which accompanies the advertising link or in the establishment or selection of keywords is relevant” (paragraph 118).
Bing reveals Google’s name change. Changes to the program itself suggest that Google might have made its position worse
The quotes above, particularly from paragraph 118, appear to have precipitated Google’s subtle (but perhaps pointless) changes to its AdWords program. If you look at the following screen grabs, you will see that a Google search for “Google’s keyword suggestion tool” gives only one result from the “adwords.google.com” sub-domain. That page is titled “Keyword Tool – Google AdWords – Online Advertising by Google” (grab 17). But the result of the same search performed on Bing on today’s date gives the page a different title. Although the URL and the page description are both identical, the title on the page is “Google AdWords Keywords Suggestions” (grab 1). The conclusion must be that Google has changed the name of its program so recently that not all search engines have captured the change.
Although Google clearly felt that this change of name was necessary, this rose smells the same: Google is still offering the same keyword suggestion tool. While they may hope that dropping the (superfluous) acknowledgment of the program’s purpose from its name will persuade courts that it is not “controlling” the content of ads, other features of the revised program appear to have had the opposite effect:
- Note that Google reserves the right to “disapprove” any keywords added by advertisers – see, e.g., the “Important Note” at the bottom of grab 3. Either this is a bluff and Google has no intention of “disapproving” any keywords, or it is exercising control over the program in a manner that could take it outside Section 4 (see quotation from paragraph 114 above);
- Google also appears to be exercising control over which brands it will protect and which it will not:
- The owner of a website selling fake goods who selects the trademark “LOUIS VUITTON” as its keyword will not find any suggestions for “fake”, “imitation”, “copy” or any other damaging phrases (grab 3 and grab 4); BUT
- The owner of a website selling fake goods who selects the trademark “OMEGA” (grab 5) as its keyword, on the other hand, will be offered the keywords “replica” (grab 6, three times; grab 7, once; grab 8, twice; grab 9, five times;); and “fake” (grab 7, once; grab 8, twice; grab 9, twice), as well as offerings of competitors’ trademarks (grab 7 and grab 9). Choosing “ROLEX” (grab 10) as a keyword results in offers of “replica” (grab 10, four times; grab 11, five times; grab 12, six times; grab 13, eight times; grab 14, seven times; grab 15, six times; grab 16, five times); “fake” (grab 10, once; grab 12, once; grab 13, once; grab 14, once; grab 15, twice; grab 16, twice); and “imitation” (grab 11, once; grab 12, once; grab 13, once; grab 15, once; grab 16, once), as well as offerings of competitors’ trademarks (grab 14 and grab 15). This means that around half of Google’s “suggestions” for this particular luxury brand contain references to either fakes or competing products.
What is the takeaway?
Google appears to have acknowledged that its Keyword Suggestion Tool was a liability. Despite this, it seems to be reserving the right to control keywords as well as demonstrating that is willing to and does manipulate its keyword tool to control what can get through it. The fact that it has done this for one brand (“LOUIS VUITTON”) while failing to do so for others, even when the illegality of the suggested keywords is indisputable from the context provided by Google (see grab 18 and grab 19), must mean that Google’s keyword (suggestion) tool is not a merely technical, automatic and passive service. As a result, it should not be able to benefit from the Article 14 Hosting exemption. (Whether Article 14 even comes into play depends, of course, on whether the national courts find Google liable for something other than registered trademark infringement in the first place.)
Second, automated processes increase the frequency of action (and therefore infringements) beyond what a group of humans could ever do. It cannot be right that otherwise harmful acts can become permissible simply because they have been carried out by a program. Courts must remember that programs function according to the specific instructions they have been given, and that when a program acts it is only because someone has coded it to perform that precise function at that precise time – programs have no discretion; people do. Blanket immunity for computer programs invites programmers to ignore (or even turn a blind eye to) the potential and sometimes obvious damage their products can cause. “Neutral” services must therefore be interpreted to mean services which treat all inputs the same and whose output is not interfered with. Google’s actions in relation to the “LOUIS VUITTON” mark indicate either that the input is designated for special consideration or the results are vetted. Either way, the service is not “neutral”.
Third, advertisers risk purchasing a lawsuit from Google when they use the AdWords service. The CJEU has held in Google France, and reaffirmed in Portakabin, that an advertiser who selects a third party trademark as a keyword to trigger ads which are even vague as to their origin is likely to infringe those trademarks and be liable for damages, as well as to be the subject of injunctive relief and possibly a costs award. So unless an advertiser is able to set out clearly, within their limited characters, who they are and who is responsible for the ad and its related goods and/or services, and to avoid creating any perception that there is a link between them and the owner of the trademark, regardless of whether they reproduce the trademark in their ad or not, they should avoid using someone else’s trademark to advertise online.
When the CJEU handed down its decision in Google and Google France vs. Louis Vuitton on March 23, 2010, brand owners were both disappointed and optimistic. Although the Court had held that because Google was not using third parties’ trademarks in its own commercial communications when it was offering them for selection as AdWords (meaning that there was no registered trademark infringement), the Court was reasonably explicit in suggesting that Google could be infringing other areas of law (such as passing off or unfair competition) and gave the impression that the exemptions from liability found in Section 4 of the E-Commerce Directive might not benefit Google.
When you read Articles 12-14 of Section 4, you notice that the “hosting” exemption of article 14 does not mention any need for the acts in question to be either technical, automatic or passive, in contrast to Articles 12 and 13 which both state, explicitly, that only “automatic” activities are exempted. However, Recital 42 to the Directive provides:
(42) The exemptions from liability established in this Directive cover only cases where the activity of the information society service provider is limited to the technical process of operating and giving access to a communication network over which information made available by third parties is transmitted or temporarily stored, for the sole purpose of making the transmission more efficient; this activity is of a mere technical, automatic and passive nature, which implies that the information society service provider has neither knowledge of nor control over the information which is transmitted or stored.
Although intended to aid interpretation, if anything Recital 42 makes interpretation of Articles 12-14 more difficult. Its first eight words indicate that it informs interpretation of all three articles, but:
- The exempted acts are limited to “only” those which constitute “the technical process of operating and giving access to a communication network”. This certainly includes article 12 (conduit exemption), and is relevant for article 13 (caching), but what sort of “hosting” (article 14) is part of operating or giving access to a communications network?
- The type of network in relation to which acts may be exempted is one over which “information made available by third parties is transmitted or temporarily stored”. This doesn’t add much, except to say that the service provider must be acting as an intermediary.
- The acts (limited to operating or providing access to the network) are further limited to those whose “sole” purpose is to make “transmission” more “efficient”. This sounds like caching alone, since a conduit exists to make transmission possible, not more efficient.
- The exempted acts (i.e. those technical processes of operating and providing access to a network populated by third party material for the sole purpose of making transmission more efficient) must, as they also certainly will be if they meet the foregoing criteria, be of a “mere technical, automatic and passive” nature.
Since “hosting” is not a technical aspect of network access or operation, and has nothing to do with the “more efficient” transfer of the material being hosted (it’s completely circular), Recital 42 seems to rule out the application of Section 4 to any exemptions in relation to “hosting”. Yet article 14 exists, and even exists without its application being expressly limited to “automatic” acts in contrast to article 12 and 13. Can Recital 42and Article 14 be reconciled?
The CJEU in Google and Google France doesn’t say how it reconciles these provisions, but simply says that Recital 42 requires acts of a neutral intermediary service provider to be of a mere technical, automatic and passive nature in order to qualify for exemption under Section 4, including Article 14. And that’s binding on all 27 Member States.
This may well have surprised Google. Like the E-Commerce Directive, 17 U.S.C. §512(a) and §512(b) (conduit and caching exemptions) both have an explicit requirement of an “automatic technical” process, whereas §512(c) (hosting) does not, and no court has prevented ISPs from relying on that exemption on the basis that there is an implicit requirement that the hosting act in question be of an automatic, technical and passive nature. The difference in the CJEU’s interpretation of these otherwise similar provisions demonstrates a philosophical difference that could have repercussion (in the form of the need for larger budgets) for international business.
Does this mean that Google cannot rely on article 14 if it is found to infringe a third party’s rights by its hosting of ads (whose very appearance Google controls (exclusively) and whose contents are created with Google offering assistance)? The CJEU says that is a question for Paris, and we await the French court’s judgment with interest.
By the end of April, it was begining to look like Google was turning a corner on what had started out as a potentially difficult year. In Europe, Google was in a high-profile dispute with LVMH, the owner of famous brands such as Moët, Hennessy, Louis Vuitton, Fendi and Christian Dior. If the result went the wrong way for Google it would threaten their AdWords cash cow across the entire European Community. At the same time, Google was facing AdWords proceedings in both the Northern District of New York and the Eastern District of Virginia. Add to that the privacy complaints and rumors of government investigations that greeted the launch of its “Buzz” social networking project, and comments from Eric Schmidt, Google’s CEO, that if you don’t want Google to publicize and profit from something, “maybe you shouldn’t be doing it“, and you can see why things looked a bit ominous for Google.
But then it all started going right. First of all, Rescuecom surprised everyone in early March by dropping its (New York) trademark infringement action, declaring victory but not gaining any of the relief it had been seeking from the lawsuit.
Then the AdWords program survived the ruling of the Court of Justice of the European Union (video here, additional comments here). Their judgment was hardly a ringing endorsement of the service, and there are various doors left wide-open to challenge it on other grounds, but at the very least it lives to fight another day.
Following this, Google’s motion for summary judgment in the (Virginia) Rosetta Stone action was granted (although Rosetta may yet decide to appeal once they see the Judge’s reasons for his decision).
And, to top it all off, the German Federal Supreme Court held that a photographer must be deemed to have impliedly consented to Google copying images from her website because she had not prevented it from doing so. (I wonder how many other Courts in Europe would reach the same result or adopt that reasoning: it appears to put a barrier between the artist and the automatic copyright protection to which she is supposed to be entitled, and to turn the idea of “exclusive rights” on its head.)
But then, possibly feeling a bit too relaxed after such a roll of good results, and in a scene reminiscent of President Obama’s comments on the Cambridge police after dealing with the last of a tough evening’s questions on healthcare, Google responded to the news that it had been spying on ordinary people’s wifi networks with its Street View cars for three years, that it was storing the data it had collected (including emails), and that it was refusing to delete it until ordered to do so, with two particularly patronizing comments: “No harm, no foul“, said Eric Schmidt (a principle which J Briggs says, in the comments, is the Peeping Tom’s charter); and “You can’t prove any harm“, said Larry Page. This article indicates that the UK’s Information Commissioner believes the Data Protection Act had been breached, and that the FTC is launching an inquiry, but here The Times (London) makes out that Google has been forced into the admission after not being completely honest with regulators:
“Google made the admission after German authorities began to examine why Google was using the cars to collect wi-fi data at all. A month ago Google said it was collecting only the name and location of local wi-fi networks — information, it argued, that was publicly available and was useful to help it improve its location services. Its data collection was much more invasive.
Internet activity such as e-mails, photos and which websites a user was looking at could have been collected by the cars.”
As does the New York Times:
“European privacy regulators and advocates reacted angrily Saturday to the disclosure by Google, the world’s largest search engine, that it had systematically collected private data since 2006 while compiling its Street View photo archive. After being pressed by European officials about the kind of data the company compiled in creating the archive — and what it did with that information — Google acknowledged on Friday that it had collected snippets of private data around the world.
Mr. Caspar [data protection supervisor for Hamburg, in Germany] said he had inspected one of Google’s Street View recording vehicles at the company’s invitation this month and had noticed that the recording device’s hard drive had been removed. When he asked to view the drive, he said he was told he couldn’t read the information anyway because it was encoded. He said he pressed Google to disclose what type of information was being collected, which prompted the company to examine the storage unit.
Germany’s federal commissioner for data protection and freedom of information, Peter Schaar … questioned whether Google’s collection of the data was a simple oversight, as the company has maintained.”
Bad news all round, particularly for Google if it turns out that no damage has been done nor any data unlawfully used. It’s a stark reminder, though, of the importance of perception when discussing your own shortcomings: no-one (except the New York Times) appears to be paying any attention to the mea culpa offered by Google’s Kay Obermeck: “This was obviously a mistake, and we are profoundly sorry.”
No doubt you are.
Despite this morning’s signing into law of a landmark healthcare bill in Washington, and last night’s news that Google has begun redirecting Chinese surfers to its Hong Kong-based search engine, this morning’s ECJ AdWords ruling has received some prominent media reaction on this side of the Pond (although not half as much as there would have been had the outcome of the references been different!). The Technology section of the New York Times led with an article informing the reader that “Europe Says Google Can Sell Trademarks but at a Risk of Suits“, while the Wall Street Journal dispensed with clarifications to offer a simple proclamation: “Google Wins EU Ruling on Ad Keywords“. The Washington Post article “European court rules Google’s ad model is legal” (via Reuters) drew attention to the ongoing arguments regarding Article 14, saying that:
“National courts guided by the principles in Tuesday’s ruling will also have to decide whether in fact Google, eBay and others are as passive as they appear to be in the administration of their automated services”.
CNN’s article, “Keyword ad buyers beware“, took the view that the “big losers” in the ruling are advertisers. A second article in the Washington Post (“Luxury industry says EU ruling limits Google ads“, via The Associated Press) queries the impact the ruling will have on trademark infringement within the European Community, given that most infringing goods do not originate in Europe but are imported. Harjinder S. Obhi, Google’s senior European litigation counsel, reiterates the point he made at the recent UCL IBIL seminar (noted by the IPKat team here) that “trade mark rights are not absolute”, and there has been some speculation as to whether Google will now align their AdWords Policies in all Member States to those already in existence in the UK and the Republic of Ireland.
There are some very interesting differences in the way these reports treat the decision. Whereas the NY Times says:
“The European Union’s highest court on Tuesday gave Google broad latitude to sell advertising linked to trademarked names like Louis Vuitton, but said the search engine might have to do more to protect brand owners from infringements arising from the practice”,
the WSJ has a rather broader and less nuanced view of the judgment, saying that:
“The European Union’s highest court ruled Tuesday that Google Inc. has the right to sell ads linked to the Louis Vuitton name and other famous brands, a landmark judgment that clears search engines of trademark liability in Europe and protects a crucial revenue stream.”
(It is estimated that approximately 98% of Google’s $23bn annual revenue is derived from advertising.) The Washington Post says the Court’s interpretation of Art. 14 is a “new” test for service providers such as Google, while CNN sets out a three-point summary of the decision, suggesting how it is likely to impact search engines and advertisers generally, and drawing particular attention to LVMH’s position that:
“any use of a trademark as a keyword by an advertiser will automatically cause sufficient consumer confusion to bring about liability under the court’s definitions”.
Two other points of interest struck me. The first is that most of the non-party quotes come from lawyers based in London (where Google’s policy is unlikely to change as a result of this ruling) and not France (where Google’s policy might well change). The London law firms represented in the articles mentioned above are Allen & Overy, Ashurst, Marks & Clerk, Pinsent Masons and Taylor Wessing. Lawyers from the continental offices of Clifford Chance and Linklaters are also mentioned. The second is that while both Google and LVMH claimed victory this morning, LVMH’s (NASDAQ) shares are up almost 1.5% while Google’s (NASDAQ) shares dropped sharply when the markets opened this morning and have continued to drop throughout the day. As I write this, they are down just over 2.25%. No doubt the largest proportion of this movement is attributable to the anticipated impact of Google’s move away from direct interfacing with the Chinese market, but I also wonder whether the lack of a clear “win” for Google on the Art. 14 point is being seen as having negative implications for the (lucrative) YouTube arm of their business.
I will continue to be on the look-out for any other interesting reports about the decision in the US, but suspect that that may be it until the Parisian Courts apply the ECJ’s ruling. In the meantime you can review the IPKat rapid response seminar, which I helped house in the London office of Ashurst, here.