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IP Cases & Commentary – Details

26 March 2010

ECJ Issues Google AdWords Decision

The ECJ has now issued its eagerly anticipated decision in the Google AdWords case.

Readers will be aware that Google operates an AdWords system which allows advertisers to purchase competitors trade marks as key words in order to trigger sponsored links in internet search results.

The ECJ has found that Google’s AdWord system does not infringe the trade mark rights of a brand owner when the brand owner’s marks are used by another to trigger the sponsored adverts. The Court found that Google’s role was only as an information service provider and Google did not itself violate any trade mark rights. The Court held “the fact of creating the technical conditions necessary for the use of a sign and being paid for that service does not mean that the party offering the service itself uses the sign” as would be necessary to constitute trade mark infringement. Accordingly, “a referencing service provider is not involved in the use in the course of trade within the meaning of the above mentioned provisions [of the directive and regulation]”.

This is clearly goods news for Google. AdWords are a large money earner and a finding that they helped infringe third party trade mark rights by offering ad words for sale would have been a significant blow to their business.

However, there was some comfort for brand owners in that the ECJ found that owners would have the right to prevent use of their trade marks in AdWords where that use did result in some kind of customer confusion. The Court found that “in the case where third parties ads suggest that there is an economic link between that third party and the proprietor of the trade mark, the conclusion must be that there is an adverse effect on the function of indicting origin.

In the case where the ad, while not suggesting the existence of an economic link, is vague to such an extent that the origin of the goods or services at issue that normally informed and reasonably attentive internet users are unable to determine on the basis of the advertising link and the commercial message attached thereto, whether the advertiser is a third party vis-à-vis the proprietor of the trade mark or, on the contrary, economically linked to that proprietor, the conclusion must also be that there is an adverse effect on that function of the trade mark”.

Accordingly, if an advertiser does want to make use of a third party trade mark as a purchased AdWord, it would be important to make clear that there is no link between that third party and the brand owner whose trade mark is used. Advertisers who are already using third party trade marks in their advertising campaigns would be well-advised to take legal advice following this decision.

For further information, please do not hesitate to contact your usual D Young & Co advisor.

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