Keyword advertising in the EU – where are we now?

The invention of the world wide web in 1989 coincided with the harmonisation of the European Union’s trade mark laws. At that time, the possibility that advertisements could be interactive, precisely targeted and produced spontaneously in response to consumers’ actions does not appear to have been envisaged.

That meant that the law, on its literal interpretation at least, didn’t quite fit the new world of electronic commerce. Fortunately, the Court of Justice of the European Union (ECJ) has shown versatility and adapted and developed the law through its decisions so that it functions as it does today.

Over the course of the last few years, we have seen a large number of references to the ECJ relating to the use of trade marks as keywords. Senior courts in France, the Netherlands, Austria and the United Kingdom have all sought guidance as to precisely under what circumstances bidding on brand owners marks will constitute trade mark infringement on the part of the search engine and the advertiser.

The iPit blog contains summaries of the law and each of the decisions on Google AdWords here, running from Google France to Interflora via L’Óreal v eBay, Die Bergspechte and Portakabin.

So where are we now?

Brand owners cannot prevent third parties from purchasing their trade marks as keywords such as through Google’s AdWords service. However, brand owners can bring proceedings for trade mark infringement where a third party bids on a term which is identical or similar to its trade mark and the resulting advertisement:

  1. does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the advertisement originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party (origin function);
  2. suggests an economic link between the proprietor of the trade mark and the advertiser (origin function);
  3. is so vague that reasonably well-informed and reasonably observant internet users cannot distinguish whether the commercial message originates from the brand owner or a third party (origin function);
  4. denies the proprietor of that trade mark the opportunity of using its mark effectively to inform and win over consumers (advertising function);
  5. substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty (investment function); or
  6. causes detriment to the distinctive character of the mark without due cause (dilution);
  7. causes detriment to the repute of the mark without due cause (tarnishment); or
  8. takes unfair advantage of the reputation of the mark without due cause (free-riding).

Where advertisements merely offer alternatives as opposed to imitations, the advertising function will not be affected. In those circumstances, the use is justified in the interests of competition, subject to not affecting any of the other functions of the trade mark.

Intermediaries, such as Google and eBay, will be liable where they play an active role in the creation of an advertisement, or are made aware – or should have been aware as diligent economic operators – of an infringing advertisement and fail to remove it expeditiously.

Comment

The ECJ’s first keyword decision in Google France appears to have been heavily influenced not only by its interpretation of the Trade Marks Directive, but in aligning it with the E-Commerce Directive 2000/31 which recognises:

Commercial communications are essential for the financing of information society services and for developing a wide variety of new, charge-free services.

The ECJ has followed a consistent pattern as it strives to strike a balance between (i) the promotion of competition in the online environment by allowing fair use of trade marks (ii) the protection of consumers from deceptive practices and (iii) the investment businesses make in promoting their brands.

All iPit posts on Google AdWords can be found here.

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