Keyword advertising raises interesting questions beyond the run-of-the-mill trademark infringement and unfair competition issues typically discussed. For instance, if a sponsored ad can be clicked in three separate countries, can the Courts of each of those countries take jurisdiction to hear and determine a dispute? The Court of Justice of the European Union has given a strange answer to this question, which you’ll probably want to know about if you, or your competitors, do any business online. Continue reading »
Further to my copyright post here, I’ve set out below a list of recent trade mark articles and quotes, with links where possible. A list of my recent copyright publications is here, and there’s a full list of all publications here.
- “National Use Neither Proves Nor Precludes Finding of Genuine Use of a Community Trade Mark,” Edwards Wildman Palmer LLP Client Advisory, July 2012.
- “Onel Opinion Sparks Debate On CTM Genuine Use,” quoted, Managing IP, July 2012. Continue reading »
I haven’t been able to write here for some time, but I have been writing elsewhere. Here’s a list of my recent copyright articles, with links. A list of my recent trade mark publications is here, and there’s a full list of all publications here.
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 »
The reference to the ECJ asks whether a prohibition issued by a Community trade mark court of a Member State has effect throughout the entire European Community or whether it becomes impotent at the rendering State’s borders. Since the Opinion itself is not available in English, we’re having to make do with the Press Release for the time being. (It contains a helpful link to the list of official translations of the Opinion, which includes Greek, Latvian, Finnish and Swedish, but not English). In it, the Advocate General is reported to have opined that:
“the [Community Trade Mark] Regulation confers jurisdiction on the competent national court to declare that a trade mark has been infringed in one or more Member States, so that its proprietor may apply to a single court in order to bring the acts of infringement to an end in several [note – not “all”] Member States. The declaration of infringement relates to a trade mark granted by the European Union, whose judicial protection is entrusted to special national courts of the EU and therefore, in principle, the declaration has effect throughout the entire area of the EU.
However, where the infringement or action for infringement is limited to a specific geographical or linguistic area, the court’s order is limited territorially. It follows that, since the prohibition is the natural consequence of the declaration of infringement, the territorial scope of the prohibition corresponds, in principle, to the scope of the infringement.”
What this appears to say is that the Courts of a Member State can make a declaration of infringement which might be limited to certain geographical areas or which might be unlimited, meaning that it is binding throughout the EC.
First, trade mark infringement actions require an assessment of the visual, aural and conceptual similarities of a mark and their impact on the mark’s essential function or the likelihood of confusion among the public. The AG’s Opinion might not have an impact on the protection of inherently distinctive marks, but what of marks that have only acquired sufficient distinctiveness to get on the register? Are Courts in any jurisdiction sufficiently well-equipped to determine whether such a mark has been infringed in a Member State where a different language and different customs exist? If not, then Courts will, no doubt, limit their declarations of infringement accordingly, and this opinion (and any subsequent judgment that follows it) won’t precipitate any real change to current practice.
Second, though, what if a Court decides that it does have competence to issue a pan-European declaration of CTM infringement? If that happens, that Member State is sure to very quickly become a hot-bed of CTM litigation. Brand owners will be certain to do what they can to secure jurisdiction in such a Court through the commencement of preemptive proceedings. In that regard, Internet sales will be an area to watch. The UK Court of Appeal has recently held that the online sale of goods into a territory is insufficient to provide that territory’s courts with personal jurisdiction (see Lucasfilm Ltd & Ors. -v- Ainsworth & Anor.  EWCA Civ 1328, summarized in my article “Not so long ago, in a courtroom not so far away…“), but not all Courts agree: California assumed the personal jurisdiction in Lucasfilm which the Court of Appeal rejected, and more recently the Court of Appeals for the Second Circuit (on an appeal from the Southern District of New York) suggested, without having to decide, that even the sale of a single item via the Internet could establish personal jurisdiction (see Chloe v. Queen Bee (full citation and links to follow)).
So, if you’re a Member State with sufficient self-interest, then perhaps you will be hoping the ECJ will follow the Advocate General, and are already preparing to react accordingly…
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The key legislative text which formed the basis of this action (for cancellation of a mark which Lego had successfully registered back in 1999) is found in Article 7(1)(e)(ii) of the Community Trade Mark Regulation (40/94), which reads:
Article 7: Absolute grounds for refusal
1. The following shall not be registered:
(e) signs which consist exclusively of:
(ii) the shape of goods which is necessary to obtain a technical result; or
It will be interested to see the extent to which the Court adopts AG Mengozzi’s reasoning, and what they have to say about the (admittedly unclear) three step test that he put forward.
It will also be interesting to see what comments (if any) the Court make over AG Mengozzi’s generic use of one of Sony’s trademarks. At para 73, he refers to “memory sticks”, and later in the same paragraph refers back to “those USB keys”. He even inserts a footnote (number 49) to say that “memory sticks” are also known as “USB keys” or “pen drives”. This is a particularly interesting set of statements for an AG delivering a trademark opinion to make, since “MEMORY STICK” is actually a trademark of Sony Corporation (and it’s a European registration, no less, with number 004021598), and because Sony’s memory sticks don’t use USB technology either. In fact, USB keys and MEMORY STICKS don’t even look the same. I wonder what Sony made of that comment.
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.