The European Court of Justice (ECJ) on March 23, 2010 decided three cases (which had been submitted by the French Cour de Cassation / Supreme Court for an interpretative ruling) that Google had not infringed trademark law by allowing advertisers to purchase keywords – via the Google AdWords system – identical to the trademarks of plaintiffs.
According to the ECJ, the holder of a trademark is entitled to enjoin a third party from using, without the holder’s consent, a sign identical with that trademark when that use is in the course of trade, is in relation to goods or services which are identical with or similar to those for which that trademark is registered, and affects, or is liable to affect the functions of the trademark.
Although it is clear that a referencing service provider like Google operates “in the course of trade” when it permits advertisers, with its AdWords system, to select, as keywords, signs identical with trademarks, stores those signs and displays its clients’ ads, it does not follow, however, from those factors that Google itself “uses” those signs within the meaning of European trademark regulations.
Indeed according to the ECJ, the use by a third party of a sign identical with or similar to the holder’s trademark implies that the third party uses the sign in its own commercial communication.
A referencing service provider like Google allows its clients to use signs that are identical with or similar to trademarks, without itself using those signs.
In this connection, the ECJ ruled also that creating the technical conditions necessary for the use of a sign and payment received for that service does not necessarily imply that Google itself uses the sign.
It follows from the foregoing that a referencing service provider like Google is not involved “in the course of trade” within the meaning of European trademark regulations.
The ECJ ruled, however, that the holder of a trademark is entitled to enjoin an advertiser from advertising goods or services identical to those for which that trademark is registered, on the basis of a keyword identical to that trademark purchased on Google AdWords, whenever that advertisement does not allow an average internet user (or with difficulty only) to ascertain whether the goods or services referred to therein originate with the holder of the trademark or, on the contrary, originate with a third party.
The Court had also been requested to rule on the liability of an operator, such as Google, in respect of the data of its clients which it stores on its server.
Indeed Article 14 of European Directive 2000/31/EC on certain legal aspects (of information society services) seeks to restrict the situations in which intermediary service providers may be held liable pursuant to the applicable national law.
According to the Court, in order to establish whether the liability of a referencing service provider like Google may be limited under Article 14 of European Directive 2000/31/EC, the national court will have to examine whether the role played by that service is neutral, in the sense that its conduct is merely technical, automatic and passive, pointing to a lack of knowledge or control of the data which it stores.
If the national court judges that this is the case, Google should not be held liable for the data which it has stored at the request of an advertiser unless, having obtained knowledge of the unlawful nature of those data or of that advertiser’s activities, it failed to act expeditiously to remove or to disable access to the data concerned.
The decision of the ECJ of March 23, 2010 is really important since the Court ensures the uniform interpretation and application of trademark law in the European Union, where in addition to the Community Trademark Regulations, all 27 Member States’ trademark laws derive from EC Directive 89/104 of December 21, 1988 (to approximate the law of the Member States relating to trademarks).
Naturally, the judgment of the ECJ prevail over the judgments rendered by the national courts of the 27 European Union Member States.
While the decision of the Court seems to protect Google’s ability to sell trademarked search terms, it gives a solid legal ground for trademarks holders who want to sue for trademark infringement those advertisers who do not make it clear, when writing their ads on Google, that they are not commercially affiliated with the trademark holders.
This said, the question remains open as to whether national courts may grant relief to trademark holders – who still want to sue Google – on other legal grounds such as “responsabilité civile” / French tort law deriving from Article 1382 and following sections of the French Civil Code.