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Google Adwords

by Jeremy Rosenberg on 2010-12-02

Google can provide businesses with immediate access to global markets. To maximise their potential presence within their market, businesses can optimise their sites for specific keywords and phrases so they appear higher in the free search results section on Google, but they can also agree to pay a fee to Google (on a pay per click basis) which will ensure that their business’s ad appears as a “sponsored link” when a visitor to Google types in certain search terms or “keywords” – this pay per click service is known as ‘Google Adwords’.

Is the Adwords service capable of being abused? Take, for example, a businessman who has already built up a substantial amount of goodwill, to the extent that when a consumer thinks of a particular product, such as camping in France, she thinks of the name of the businessman’s company. Let’s assume the businessman has had the forethought to register a trade mark over his company name. Approaching the holiday season, the consumer will start her research of prices by first entering the businessman’s company name into Google. Results are generated, showing a couple of sponsored links, one of which is offering camping holidays in France, but is not the businessman’s company. This scenario is possible because Google has taken advantage of a message from the UK courts from a decision in 2008 (Mr Spicy v Yahoo!) holding that search engines can sell to third parties keywords that are similar or even identical to trade marked names, which can obviously result in consumers visiting and purchasing products or services from competitive websites.

A number of trademark owners (including Louis Vuitton) have since brought trademark infringement proceedings against Google for this very practice across a number of different states in the EU. In the Louis Vuitton case, the French courts gave Louis Vuitton (and others) the victory they sought. However, Google appealed, and the case was referred to the European Court of Justice (recently renamed the Court of Justice of the EU (CJEU)). Trademark proprietors from other member states have also had their lawsuits against Google referred to the CJEU, the ultimate question being: “Are the sale of keywords in this manner an infringement of a trademark?”

Google held its breath at the end of March 2010 when the CJEU came to a decision in relation to the Louis Vuitton case. It was held that Google does not infringe trademarks by selling keyword related advert space to entities other than the trademark proprietor. Google was obviously delighted. The court did add, however, an advertiser could be guilty of trademark infringement if their ad suggested there is an economic link between itself and the trademark proprietor, which is likely to confuse the average internet user as to the origin of the goods or services being advertised.

The result is that Google has been given the go ahead to continue using its policy in the EU. However, advertisers need to tread very carefully when bidding on a competitor’s trademark to ensure that the link and the advertisement clearly identifies the goods or services being advertised are those of the advertiser.

Whilst this appears to be a victory for Google, a number of cases still remain in the CJEU’s pipeline and the CJEU has not indicated if it will use this judgement to dispense with the other outstanding references.

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