N. 41, January - March 2009 
IP & RTD: Articles 

Sponsored links and trade mark use

Triggering sponsored links with third party trade marks brings queries to the ECJ on the interpretation of the Trade Mark Directive.


Frédéric Glaize
Trade Mark Attorney, Cabinet Plasseraud, Paris.

 
Recently, four series of questions have been referred to the ECJ regarding the interpretation of the 1988 Directive on trade marks to determine whether or not the triggering of sponsored links with competitors’ trade marks as keywords should be considered infringement1.

Sponsored links are advertisements for Web sites in the form of a short title and one or two short lines of text, not unlike newspapers classified advertising. The title line includes a hypertext link leading to the advertiser's Web site. Such advertisements are context-dependent: with search engines, the sponsored links displayed in a result page are directly determined by the query one enters. On a classic Web page (a newspaper article, a blog entry, or any other content with text), the sponsored links would depend on the presence of specific keywords in the Web page content. Keywords that will trigger the display of an advertisement are booked by the advertiser (or its ad booking agency) at the sponsored link service provider. Google's AdWords system is the service which largely dominates the sponsored links market.

Since 2003, disputes on sponsored links have been brought before courts in Germany, Belgium, the Netherlands, Italy, Great Britain, Austria and France, with France hosting a majority of the litigation with more than 50 cases. Jurisprudence is therefore abundant, but has also become uncertain. Some courts held the advertisers responsible for trade mark infringement, and some courts considered that the sponsored link service providers were also responsible for trade mark infringement, especially when their suggestion tools proposed booking keywords that included the advertiser's competitors’ trade marks. Solutions, however, are not consistent and, since May 2008, the supreme courts of France, Austria, the Netherlands and Germany have queried the ECJ regarding the interpretation of the trade marks Directive in such situations.

The main question is one that deals with the notion of use of the mark in the course of trade, as the prerogative of the trade mark owner is defined in article 5 of the Directive. The Austrian Supreme Court refers to two stages of the sponsored links process, asking whether “a trade mark is used in a manner reserved for the proprietor of the trade mark if the trade mark or a sign similar to it (such as the word component of a word and figurative trade mark) is reserved as a keyword with a search engine operator and advertising for identical or similar goods or services therefore appears on the screen when the trade mark or the sign similar to it is entered as a search term”. Precisions are also required on the influence of the separation between the search results and the advertisements on the result page.

The Dutch and German supreme courts referred to the ECj similar questions on the notion of “use as a trade mark” by the advertiser. Precisions were requested by the Dutch Supreme Court on the possible application of the provisions of articles 6 and 7 of the Directive when a trade mark is used as a keyword to trigger sponsored links.

Whereas the Austrian, Dutch and German supreme courts’ questions dealt with disputes where the defendant was the advertiser, in the disputes brought before the French Supreme Court, the defendant was the sponsored links service provider (i.e. Google). While French courts’ interpretation of trade mark infringement by sponsored links varied in time, they remained consistent overall on admitting that, at both of the stages mentioned in the Austrian question (booking the keyword, and displaying the advertisement), the mark was used in the course of trade, in the sense of article 5 of the Directive.

In more than 80% of the cases brought before French courts, the sponsored links service provider was the defendant or co-defendant. There is very little room for doubt for French courts on the fact that an advertiser who places a bid on his competitor's trade mark is guilty of trade mark infringement. Indeed, unlike its counterparts, the French Supreme Court did not address the responsibility of the advertisers in its questions to the ECJ, but that of the “provider of a paid referencing service who makes available to advertisers keywords reproducing or imitating registered trade marks and arranges by the referencing agreement to create and favorably display, on the basis of those keywords, advertising links to sites offering infringing goods”. An ECJ opinion was required as its previous decisions interpreting article 5 of the Directive, especially in the Adam Opel (25 January 2007, C- 48 / 05, paragraph 29) and Céline (11 September 2007, C- 17 / 06, paragraphs 23 and 36) cases, could not directly apply to sponsored link fact patterns, according to the French Supreme Court.

Over time, all the three sections of the Paris first instance courts became reluctant to rule that sponsored link service providers were guilty of trade mark infringement, but kept condemning them under civil responsibility. Their responsibility was determined for their lack of verification whether the choice of the keyword was legal and according to the theory of risks. This theory states that one who benefits from an action must also bear the risks it implies. In other words, as the sponsored link service provider financially benefits from the booking of keywords – including those that infringe third parties’ trade marks – it must also assume the risk thus induced.

Google has systematically claimed the benefit of the “lighter” responsibility system that applies to hosting services providers, pursuant to the Directive on Electronic Commerce of 2000. Except for one isolated exception, no court has deemed that Google qualifies as a hosting service provider, but rather that it acted as an ad sales agency. Whether Google can benefit the lighter responsibility principle set by the electronic commerce directive is the subject of the last question the French Supreme Court asked to the ECJ in May 2008.





1. Those questions were passed to the ECJ by the:(«)

  • French Supreme Court (Google Inc., Google France / Louis Vuitton Malletier; Google Inc. & Google France / Viaticum, Luteciel; Google Inc., Google France / CNRRH): case C-236/08;

  • Austrian Supreme Court (Die BergSpechte Outdoor Reisen und Alpinschule Edi Kolblmüller GmbH / Günter Guni, trekking.at Reisen GmbH): case C-278/08;

  • Dutch Supreme Court (Primakabin / Portakabin): case 558/08.

  • German Supreme Court (Bananabay): case not yet registered at the ECJ. See the Class 46 blog: http://class46.eu/2009/01/bgh-decides-in-adword-cases.html