Google AdWords: advertisers may be liable

The long-awaited decision in the Google AdWords case has finally arrived, the ECJ has ruled that the Google AdWords tool does not itself infringe the rights of trade mark owners. However, brand owners may have a form of redress against advertisers who buy trade marks as keywords.

The dispute

The dispute began when numerous trade mark owners, including Louis Vuitton, sued Google France for infringing their trade marks through the Google AdWords tool. The French court referred the case to the ECJ.

What is Google's Adword tool?

Google’s AdWords tool is a paid referencing system, the advertisers pay for keywords, when internet users enter these keywords into the search engine a link to the advertiser’s site appears alongside any natural results. Advertisers can purchase keywords that correspond to others registered trade marks, and it was this that led trade mark owners to bringing a case for infringement. In the French proceedings it was proven that the keywords entered often led to the display of adverts for counterfeit versions of the goods protected by the registered trade marks or to the identical or similar products of competitors.

The decision

The ECJ held that ‘an internet referencing service provider’ such as Google, ‘which stores, as a keyword, a sign identical with a trade mark and organises the display of advertisements on the basis of that keyword’ did not infringe trade mark law. The service provider created the technical conditions to enable an advertiser to use signs identical to trade marks but did not possess the knowledge, control the data or use those signs for its own purposes.

However, the court introduced an obligation on internet service provider to act quickly to remove or disable access to such data if they were alerted to its unlawful nature, if they fail to take down the advertisements they may become liable to the registered trade mark owner.

The court confirmed that a registered trade mark owner could stop a third party from, using a sign that was identical to their trade mark if they were using it during the course of trade in relation to goods and services and the use was likely to have an adverse effect on the functions of the trade mark, including quality, communication, advertising and the ability to guarantee where the goods and services came from.

Significantly, it does not matter whether the advertiser refers to the mark in the advertisement or not, merely reserving a keyword is enough to amount to use and potential infringement. This gives brand owners more scope to send Google “take down” requests.

Practical advice

Whilst brand owners can rejoice in the finding that advertisers can be liable for trade mark infringement, it will be up to the national courts to deicide whether a trade mark has been infringed. The ECJ has failed to give guidelines on what will amount to infringement, therefore each individual case will be decided on it facts.

Going forward, registered trade mark owners should ensure they make regular checks of internet search engines, and if they discover their trade mark is being used as a keyword by a third party they should contact the search engine and the advertiser immediately and request that they disable use of the keyword.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

Back to news