Alert 358 – Europe – Google AdWords service in the clear - or is it


This week the European Court of Justice (ECJ) issued its decision in the group of trade mark infringement cases referred to it by the French courts involving Louis Vuitton and others as claimants and advertisers and Google as the defendants.

At issue is the part played by Google in the provision of its Adwords referencing service by which it offers, for a fee, the opportunity for advertisers to reserve keywords and thereby have links to their sites featured on screen as ‘sponsored links’ whenever those words are entered into the Google search engine by Internet users. These ‘sponsored links’ appear alongside the ‘natural’ results of the search and consist of a short advertisement which directs the user to the advertiser’s site, when it is clicked.

Keywords may be trade marks and trade mark owners object to competitors and others reserving their trade marks as keywords and using them in this way. An Internet user searching for LOUIS VUITTON may find among the sponsored links, links to sites selling competing products including counterfeits.

The ECJ had to decide whether the provision of its Adwords service renders Google liable in trade mark infringement when its clients reserve the trade marks of others as keywords and use them to bring advertisements up on screen.

The service is an automated service whereby the selection of the keyword, the creation of the advertisement (including the drafting of any message to accompany the link) and the inputting of the link to the advertiser’s site is all undertaken by the advertiser. The degree to which Google helps in creation of the advertisement is not clear.

The Court has held that the advertiser is using the trade mark in relation to the advertiser’s goods and services. If the Internet user thinks that the advertiser is linked to the trade mark owner, or cannot tell whether or not there is such a link because the advertisement is so vague, the function of the trade mark to indicate origin will be adversely affected, so the advertiser is likely to infringe.

Google’s ‘use’ of the claimants’ trade marks in its capacity as a referencing service provider, however, is not use for the purposes of the infringement provisions of the Trade Marks Directive and the CTM Regulation and does not therefore constitute trade mark infringement.

The Court also looked at whether Google was entitled to the benefit of Article 14 of the Electronic Commerce Directive, as an “intermediary service provider”. Such providers engage in activities “of a mere technical, automatic and passive nature”, and so have no knowledge of, or control over, the advertiser’s information. The ECJ has left it to the national court to decide whether Google’s role gives Google that knowledge or control. If not, Google cannot be held liable for trade mark infringement unless it is informed of the unlawful conduct of the advertiser and fails to act to stop it.

COMMENT The judgment answers a number of legal issues, but leaves unanswered the critical question as to whether or not Google is in fact liable for trade mark infringement. This apparent contradiction with what is said above on the question of Google’s liability stems from the fact that the Court has left it to the national court to decide whether Google acts as more than a mere referencing service provider.

Proving how much knowledge and control any particular internet service provider has could be a costly exercise, and trade mark owners may have to continue instead, to regularly notify the provider of infringing activity, an equally unsatisfactory task.