Google wins AdWords battle – but not the war

The long-awaited European Court of Justice (ECJ) decision as to whether Google’s AdWords service constitutes trade mark infringement has been reached.

In 2005 LVMH owner of luxury brand Louis Vuitton successfully sued Google in France for trade mark infringement and was awarded £278,000 in damages. The Paris Tribunal of First Instance agreed with LVMH’s arguments that Google should be held accountable for damage caused to its brand by third parties which purchased the Louis Vuitton trade marks as keywords under Google’s AdWords service and used them to trigger advertisements for counterfeit Louis Vuitton goods.

Google appealed the decision all the way to the highest court in France, the French Court of Cassation, which in 2009 referred the question of whether Google’s provision of the AdWords service itself constitutes trade mark infringement, to the ECJ.

Seven years after LVMH first issued its claim against Google the ECJ has found in Google’s favour stating that it has not infringed European trade mark law by “allowing advertisers to purchase key words corresponding to their competitors’ trade marks”.

One thing that is banned is advertisers using another’s brand name in such a way which confuses the consumers as to the origin of the products.

In relation to Google’s liability in such instances the ECJ stated that if Google has knowledge of the unlawful nature of the adverts triggered and fails to act expeditiously to remove or disable access to those concerned, it may be held liable.

The case will now revert back to the French Court of Cassation for the judges there to decide whether on the current facts Google can be said to have had the required knowledge and control over the content of the advertisements LVMH complained of to hold Google liable for contributing to the infringement of its trade marks.

The ECJ judgement has clarified that Google’s AdWords service does not in itself constitute trade mark infringement. However, it has also provided some useful guidance as to the scope of permitted use of the keywords by advertisers and Google’s obligations to prevent unlawful use of its AdWords service.

Advertisers are not permitted to use Google’s AdWords service in such way as to confuse users of the search engine as to the origin of the goods and services they advertise.

With regard to Google’s liability, the ECJ has added that whether or not a “referencing service provider” such as Google in this case can be held liable will be determined on a case by case basis. If such service provider has a neutral role which is purely technical, automatic and passive, pointing to a lack of knowledge or control of data concerned (in this case the content of the adverts triggered by the AdWords), then the referencing service provider will not be held liable.

In light of the ECJ’s guidance it is therefore important that brand owners inform Google and other search engine providers of adverts triggered by their trade marks which they believe are damaging their brands and business as well as the third parties directly responsible for the content of such advertisements.

Margaret Briffa is a leading intellectual property lawyer and founding partner of Briffa, intellectual property and information technology lawyers. Oran Arif is a trainee solicitor at Briffa.

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