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 Google & Co v. Trademark Owners: The latest AdWord-News from Europe

4.1. The ECJ ruling - overview

The European Court of Justice (ECJ) released its ruling on two Adwords cases in March (Vuillton and Bergspechte). But that doesn't mean we know if the use of a trademark protected term as keyword is legal or not. Instead we are faced with new questions. I will provide a very short overview, followed by a more indepth analysis from Maximilian Schubert.

One thing is clear: The Court found that Google does not use the mark in the course of trade, even though it clearly draws economic advantage from selling them to advertisers as keywords.

As for the advertiser, the ECJ held that there is "use ‘in relation to goods or services’ within the meaning of Article 9(1)(a) of Regulation No 40/94 where the sign so used is identical with a Community trade mark." But a trademark owner can only exercise his right "in cases in which a third party’s use of the sign affects or is liable to affect the functions of the trade mark. It follows from that case-law that the proprietor of the mark cannot oppose the use of a sign identical with the mark if that use is not liable to cause detriment to any of the functions of that mark. Those functions include not only the essential function of the trade mark, which is to guarantee to consumers the origin of the goods or services (‘the function of indicating origin’), but also its other functions, in particular that of guaranteeing the quality of the goods or services in question and those of communication, investment or advertising."


Adverse effect on the function of indicating origin:

A trade mark owner is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with that trade mark, in the case where that advertisement does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party.


Adverse effect on the advertising function

The ECJ held that keyword advertising has no adverse effect on the advertising function: "It follows from those factors that, when internet users enter the name of a trade mark as a search term, the home and advertising page of the proprietor of that mark will appear in the list of the natural results, usually in one of the highest positions on that list. That display, which is, moreover, free of charge, means that the visibility to internet users of the goods or services of the proprietor of the trade mark is guaranteed, irrespective of whether or not that proprietor is successful in also securing the display, in one of the highest positions, of an ad under the heading ‘sponsored links’." So what? Is there trademark infringement, when the trademark owner has no web site of his own (that affects e.g. 20 % of all companies in Austria), his web site was removed from the Google index because of a violation of their terms or does not show up on the first search result page?

Many questions remain unsolved, but not surpsinigly, Google still claims victory (Official Google Blog): "Today, the Court confirmed that Google has not infringed trade mark law by allowing advertisers to bid for keywords corresponding to their competitors’ trade marks. It also confirmed that European law that protects internet hosting services applies to Google’s AdWords advertising system. This is important because it is a fundamental principle behind the free flow of information over the internet."


Here is what Maximilian Schubert has to say: From Biblical Questions To Delphian Confusion: The ECJ’s Decision On Google France C-236/08




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