Does use of a Google Adword infringe a registered trade mark?

Summary
In a series of recent cases, the European Court of Justice has grappled with the questions of whether obtaining and using a keyword, equivalent to another’s trade mark, (under the Google Adword service) may amount to trade mark infringement and, if so, whether Google is also liable for that potential infringement.
The Court has concluded that:

1. Obtaining an Adword will not, of itself, amount to infringement - but using an Adword may amount to infringement where that use, in the context of the related advertising message and the landing web page, to which a potential consumer is directed, leads to a likelihood of confusion; and 
   
   
2. Google will not be liable for trade mark infringement unless it takes an active role in the adoption of the potentially infringing Adword (which it usually does not).

Background
Google Inc. generates the majority of its revenue from advertising.  One of its most popular products is “AdWords” which enables an advertiser to draft a short commercial message, with accompanying internet link to its web page, and to bid for a keyword, such as “hotel”.  

If the advertiser’s bid is successful, its message and internet link will appear under “sponsored links” in search results performed on the Google search engine, for example for the word “hotel”.  The advertiser will pay for this service on a “pay-per-click” basis (i.e. it will pay only when its web page is actively viewed) and will have, therefore, achieved the advantage of advertising directly to consumers who have expressed an interest in information relating to services in that area.  It is a competitive process for an advertiser to get to the top of the list of “sponsored links”, worked out by comparing advertisers’ bids in conjunction with an objective assessment by Google of the information quality of the advert and linked web page.  

In May 2008, Google began to accept bids for keywords which included registered trade marks, as well as generic terms such as “hotel”.  

The Cases

1. Google v Louis Vuitton
   In the first case, Google France, Google Inc. v Louis Vuitton Malletier, Google appealed judgments from the French courts as to its liability for its Adwords service, where LOUIS VUITTON keywords (identical to the registered trade mark) were granted to third parties, potentially infringing Louis Vuitton’s rights.  
   
   The European Court held that Google was not liable, unless it took an active role in adopting the keyword (which it usually does not, since AdWords is an automated service) but that it was obliged to deactivate the keyword where infringement by use of the keyword is brought to its attention.  The Court referred in particular to European Directives which indicated that internet referencing service providers, such as Google, ought not to be held liable for mere storage of data (in this case an AdWord and related commercial message and link). 
   
   The Court also pointed out that merely obtaining a keyword, which was equivalent to a registered trade mark, by an advertiser does not itself amount to infringement and only the use of the keyword, in the overall context of the advertiser’s message and the advertiser’s landing web page, could amount to infringement - where there was the necessary likelihood of confusion.  On the facts, several instances of keyword uses in this case would fulfil those criteria.  
   
   
2. BergSpechte
   In the second case, Die BergSpechte Outdoor Reisen…v Günter Guni, trekking. at Reisen GmbH, the primary question was whether the Austrian defendant “trekking.at” might be liable for trade mark infringement by adopting the keyword “BERGSPECHTE” even though trekking.at did not use BERGSPECHTE in its related advertising message or anywhere on its web page. As such, its facts were slightly different from the Louis Vuitton case discussed above.  
   
   The European Court again reiterated that the entire context of use of the keyword must be reviewed in assessing whether there is infringement.  The Austrian court later found (taking into account the European Court’s guidance that trekking.at’s use of the keyword did amount to infringement because its message and home page were sufficiently generic that they would not disabuse a consumer, who had entered a search for BERGSPECHTE, that trekking.at had no connection with the claimant, BergSpechte.
   
   
3. Portakabin
   In the third case, Portakabin Ltd v Primakabin BV, the defendant had an arguably legitimate right to use the PORTAKABIN trade mark, given that it sold second-hand PORTAKABIN branded mobile buildings (as well as its own branded mobile buildings).  The question was whether this justified Primakabin’s use of PORTAKABIN as a keyword.
   
   The European Court held that a second-hand reseller was entitled to use the keyword in this way as long as, factually, there was no damage to the trade mark proprietor’s reputation in the overall context of the ad message and landing page.  It might not be proportionate, for instance, for an advertiser to use a PORTAKABIN keyword, if all buildings advertised on its landing web page, bar a small minority, were third party brands (rather than PORTAKABIN buildings).  

Conclusion
A trade mark proprietor is not entitled to prevent a third party merely obtaining a keyword, which is equivalent to its trade mark, but where use of that keyword in combination with the related ad message and landing web page falsely suggests that there is a connection to the trade mark proprietor, that use is likely to amount to infringement.  Liability for that infringement is incurred by the advertiser but does not initially fall on the search engine provider. However, the search engine provider is obliged to disable the keyword when the infringement is made known to it.  Google now has a facility “Advertising Legal Support”, to enable trade mark proprietors to notify it of relevant instances of trade mark infringement so that they might then disable relevant keywords.

Further, even where an advertiser is entitled to use a trade mark-equivalent keyword (because, for instance, it is a legitimate reseller of the branded goods), it must ensure that the combination of keyword, message and landing page is not seriously detrimental to the reputation of the trade mark (which might be the case where, for instance, poor quality third party goods are sold in volume in combination with a minority of relevant branded goods).  

The European Court’s judgements give relatively clear guidance on the risk that an advertiser, using a search engine keyword, may run and the boundaries of trade mark protection in this area.  The Court’s approach attempts to balance the rights of trade mark proprietors in protecting their trade marks with those of competitors and others to freely describe and compare products - as well as the rights of a search engine service provider to facilitate advertising without incurring liability for its customers’ actions.

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Does use of a Google Adword infringe a registered trade mark?