Advocate general favours Google in AdWords cases

On September 22 2009 Advocate General Luís Miguel Poiares Pessoa Maduro delivered his much-anticipated opinion in Google France v Louis Vuitton Malletier SA (Case C-236/08), Google France v Viaticum SA & Luteciel SARL (Case C-237/08) and Google France v CNRRH (Case C-238/08), three referrals to the European Court of Justice (ECJ) from the French Supreme Court regarding Google’s AdWords system.

Google's AdWords system permits advertisers to select keywords so that their advertisements are displayed to internet users when the keywords are entered in Google’s search engine. The AdWords system represents Google’s main revenue stream, as the latter is remunerated each time a user clicks on the advertiser’s link (price per click).

All three referrals posed the same basic question: whether Google's use of keywords corresponding to trademarks in its AdWords advertising system constituted an infringement of those marks (for further details please see "Supreme Court refers questions on keying to ECJ" and "More questions referred to the ECJ in Google Cases"). In the opinion of the advocate general, there was no infringement.

First, the advocate general found that two different uses had to be considered:

• where Google allows advertisers to select keywords which correspond to trademarks; and
• where Google displays the ads alongside the 'natural' results in response to a search for the keyword.

In the opinion of the advocate general, the link that Google’s search engine establishes between keywords corresponding to trademarks and natural results was insufficient to lead to confusion. The advocate general considered that internet users decide on the origin of the goods and/or services offered on the sites by reading their description and, ultimately, by leaving Google and entering those sites.

The advocate general concluded that neither the display of ads nor the display of natural results in response to keywords which correspond to trademarks led to a risk of confusion as to the origin of the goods and/or services. The advocate general held that the essential function of the trademarks was not affected. This was held to be the case even where the marks involved had a reputation, which entitled them to special protection.

With respect to the liability exemption for hosting, the advocate general held that Google was not entitled to protection under Article 14 of the E-commerce Directive (2000/31/EC). The advocate general found that the advertising activity involved in the AdWords system went beyond hosting - he did not accept Google’s argument that the AdWords system is a “neutral platform”. The ECJ's press service stated that “Google had a direct pecuniary interest in internet users clicking on the ads’ links”. Therefore, Google could not claim the same immunity as a search engine, which EU law recognizes as a neutral information vehicle.

The advocate general thus concluded as follows:

• The selection of a keyword which triggers a link proposing connection to a site operated by that economic operator for the purposes of offering for sale goods or services, and which reproduces or imitates a trademark registered by a third party for identical or similar goods, without the authorization of the proprietor of that trademark, does not constitute in itself an infringement under Article 5 of the First Trademarks Directive (89/104/EEC).
• A trademark proprietor may not prevent the provider of a paid referencing service (eg, Google) from making keywords available to advertisers, or from arranging and displaying advertising links on the basis of those keywords.
• In the event that the trademarks at issue have a reputation, the trademark proprietor may not oppose such use under Article 5(2) of the First Trademarks Directive.
• The liability exemption for hosting under the E-commerce Directive does not apply to Google’s AdWords system.

Brand owners - particularly those involved in these cases - argue that the scope of protection should be extended in line with the US doctrine of contributory infringement. They also allege that Google is liable because its AdWords system encourages infringement by third parties by facilitating the online trade of counterfeit goods.

However, the opinion is not all bad for brand owners - the advocate general held that Google could still be held liable for content featured in the AdWords system provided that trademark owners could show that Google’s ads had damaged their marks.

The advocate general stressed that it is important not to allow the legitimate purpose of preventing trademark infringement to result in all trademark uses being prohibited in the context of cyberspace.

Carol Gormley, FRKelly, Dublin