Advocate General's opinion on trade mark infringement through online paid advertising keywords

Advocate General's opinion on trade mark infringement through online paid advertising keywords

This article was included in the spring 2011 issue of snIPpets - the intellectual property newsletter.

On 24 March 2011 Advocate General Jääskinen handed down his Opinion on questions regarding advertisers' liability for trade mark infringement through use of keywords in paid internet referencing services offered by search engines, such as Google. These questions were referred by the English High Court in Interflora v. Marks & Spencer (Case C-323/09).

The Advocate General's Opinion is not binding on the CJEU but it usually provides a good indication of the final ruling which the European Court will make. If the Opinion is followed advertisers using Google's AdWords service may review their existing adverts and change the content to avoid potential infringements.

To recap, Marks & Spencer purchased the keyword "Interflora" for the AdWords paid referencing service, so that people who were looking for the world famous Interflora flower delivery service would find an advertisement for Marks & Spencer's rival service at the top of the paid for 'sponsored' search results. Interflora sued Marks & Spencer for trade mark infringement and the trial judge, Mr Justice Arnold, referred ten questions for preliminary rulings. Following the Google France judgment this was reduced to four questions.

The Google France judgment was an Article "5(1)(a)" case where same goods/same mark (double identity) infringement was alleged and determined. Here, Interflora also had an Article "5(2)" argument, where the trade mark has a reputation and where use of an identical or similar sign without due cause on identical or similar goods or services takes unfair advantage of, or is detrimental to, the distinctive character or reputation of the trade mark.

The Advocate General's Opinion is summarised below.

Double Identity (same goods/same mark)

1. Article 5(1)(a) of ... Council Directive 89/104 ... and Article 9(1)(a) of Council Regulation ... 40/94 .. on the Community trade mark must be interpreted as follows:

• A sign identical with a trade mark is used 'in relation to goods or services' within the meaning of these provisions when it has been selected as a keyword in connection with an internet referencing service without the consent of the trade mark proprietor, and the display of ads is organised on the basis of the keyword. [this follows from paragraph 65 of the Google France judgment]
• The proprietor of a trade mark is entitled to prohibit such conduct under the abovementioned circumstances, in the case where that ad does not enable an average internet user, or enables the said user only with difficulty, to ascertain whether the goods or services referred to in the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or from a third party. [this affirms the first paragraph of the Google France ruling]
• An error concerning the origin of goods or services arises when the competitor's sponsored link is liable to lead some members of the public to believe that the competitor is a member of the trade mark proprietor's commercial network when it is not. As a result of this the trade mark proprietor has the right to prohibit the use of the keyword in advertising by the competitor in question. [Note that Article 5(1)(a) double identity infringement does not require that there be a likelihood of confusion. Article 5(1)(b) infringement does require a likelihood of confusion, which is described as including a 'likelihood of association'. This test arguably encompasses the situation where members of the public are led to believe that Marks & Spencer is a member of Interflora's network when it is not].

Marks with a reputation (the Article 5(2) claim)

2. Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94 must be interpreted as meaning that the use of a sign as a keyword in an internet referencing service in relation to goods or services identical or similar to those covered by an identical or similar trade mark with a reputation also falls within the scope of application of those provisions and it can be forbidden by the trade mark owner when

(a) the ad shown as a result of the internet user having typed as a search term the keyword identical with a trade mark with a reputation mentions or displays that trade mark; and

(b) the trade mark:

• is either used therein as a generic term covering a class or category of goods or services;
• or the advertiser attempts thereby to benefit from its power of attraction, its reputation or its prestige, and to exploit the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark. [This may be of concern to paid internet referencing service providers, such as Google, in dealing with complaints about advertisements because it could be argued that every purchase of a third party's well known trade mark as a keyword might fall within this condition. It is probable that the well known trade mark was chosen as a keyword so that the internet user, who searches on the term because he is attracted by what it stands for, will be presented with the keyword purchaser's advertisement].

3. The fact that the internet search engine operator does not permit trade mark proprietors in the relevant geographical area to block the selection of signs identical to their trade marks as keywords by other parties is as such immaterial in so far as the liability of the advertiser using of the keywords is concerned.

In practice: In reaching his final answer to the questions on dilution (i.e. Article 5(2)) the Advocate General was considering allegations of blurring and free-riding. In all allegations of dilution under European case law there must be a "link" between a trade mark with a reputation and the sign used by the third party. If the link exists, and it will in cases of truly unique trade marks which are inherently distinctive, then it is necessary to consider the effect of the advert in the sponsored link which is visible to the internet user and the above test is potentially wide enough to be of concern to advertisers who are hoping to benefit from the power of attraction of a well-known trade mark when they choose it as a keyword. The final ruling by the Court of Justice of the EU is expected in the next few months.