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Why the Advocate General got Google AdWords wrong

Brand spanking anew

The Advocate General did offer some comfort to trade mark owners. A question that has tested many judges is whether Google's use of the trade mark is "use in the course of trade". The Advocate General said that it was. "When Google offers advertisers, through AdWords, the possibility of selecting keywords which correspond to trade marks, it does so as a commercial activity: even though its remuneration does not come about until later (when internet users click on the ad’s link), Google’s service is provided ‘with a view to a gain’," he wrote. "This condition should therefore be regarded as satisfied."

The Advocate General has also left a muddle for the Court to sort out on the question of whether the AdWords service amounts to use of a trade mark on identical goods or services. This is important because if the analysis is that AdWords links the trade mark to identical goods of a competitor, confusion is not a requirement and infringement is established.

At one point, he says:

"The essential factor is therefore the link that is established between the trade mark and the good or service being sold. In the traditional example of a use in advertising, the link is established between the trade mark and the good or service sold to the general public. This happens, for example, when the advertiser sells a good under the trade mark. That is not the case with the use by Google consisting in allowing advertisers to select keywords so that their ads are presented as results. There is no good or service sold to the general public. The use is limited to a selection procedure which is internal to AdWords and concerns only Google and the advertisers. The service being sold, and to which the use of the keywords corresponding to the trade marks is linked, is therefore Google’s own service, AdWords.

"It seems evident that AdWords is not identical or similar to any of the goods or services covered by the trade marks. Accordingly, this condition is not satisfied and, in consequence, the use consisting in allowing advertisers to select in AdWords keywords which correspond to trade marks, so that ads for their sites are presented as results for searches involving those keywords, does not constitute a trade mark infringement."

In other words, AdWords is an advertising system, so it is not the same as (say) holidays. That conclusion is difficult to reconcile with his observations in another part of his opinion where it is said, in the context of an analysis of the Google search engine:

"... by displaying ads in response to the keywords which correspond to trade marks, it establishes a link between those keywords and the sites advertised, including the goods or services sold via those sites. Even though the keywords do not feature in the ads themselves, this use falls under the notion of use ‘in advertising’ as referred to in Article 5(3)(d) of Directive 89/104: the link established is between the trade mark and the goods or services advertised. The sites concerned sell goods which are identical or similar to those covered by the trade mark (including counterfeit products). This condition should therefore be regarded as satisfied."

Running though the opinion is the Advocate General's worry about the power that ruling in favour of the trade mark holders would give them:

"I am concerned that, if trade mark proprietors were to be allowed to prevent those uses on the basis of trade mark protection, they would establish an absolute right of control over the use of their trade marks as keywords. Such an absolute right of control would cover, de facto, whatever could be shown and said in cyberspace with respect to the good or service associated with the trade mark."

The notion of an absolute right of control is not correct. There are many circumstances where it is right and proper that third parties can use the registered trade mark of another, for example, in comparative advertising. These circumstances are set out in the Directive and elsewhere.

The answer is, I think, that the Advocate General has started with a concern that brand owners were going too far in seeking protection for their brands, and then he has worked backwards. He has been forced to include in his analysis a requirement for confusion. There is a lengthy and convoluted analysis of confusion when there is no need for that analysis. Confusion is not a requirement under the current law. Brand owners are entitled to have their rights protected. Google has become the dominant search service so brand rights on Google are incredibly important for consumers and brand owners. Let's hope the Court takes a different view.

By John Mackenzie, a partner with Pinsent Masons, the law firm behind OUT-LAW.COM. Pinsent Masons is acting for Interflora in a dispute with Marks and Spencer over the use of AdWords – a case that is on hold pending the full judgment of the European Court of Justice in the French cases.

Copyright © 2009, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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