GOOGLE’S POLICY CHANGE REGARDING THE USE OF TRADE MARKS IN KEYWORDS

GOOGLE’S POLICY CHANGE REGARDING THE USE OF TRADE MARKS IN KEYWORDS
Author: Brinsley Dresden, Lewis Silkin

Google has caused controversy amongst brand owners in the UK and Ireland by announcing a sudden change to its policy regarding the use of trade marks as keywords, bringing it into line with Google’s existing approach in the US and Canada with effect from May 5th. The policy that previously applied – and which still applies outside the UK, Ireland and North America – had been for Google to take action in response to complaints from trade mark owners to prevent other parties from using their marks in keywords (or in the text of sponsored ads). Under the new policy, Google will still take action against the use of trade marks in the text of ads, but not against their use in keywords.

In broad terms, keyword advertising systems allow advertisers to bid for particular terms or phrases (the “keywords”) so that when a computer user conducts a search that includes those terms or phrases a sponsored advertisement and link to the advertiser’s website is automatically generated above or alongside the “natural results” of the search. Advertisers pay a fee to Google each time someone clicks on their sponsored link, and if a number of advertisers all want to use the same keywords, the system conducts an automatic auction usually allocating the best placed ad/link to the advertiser willing to pay the most “per click” (although the system also takes into account the “relevance” of ads based upon previous click-through rates). AdWords is the name of the Google system, but other search engines such as Yahoo and Ask have their own versions. Google also provides a “Keyword suggestion tool” which is – as its name implies – a program that suggests potential keywords to advertisers and gives statistics as to the relative popularity of particular search terms.

Brand owners in the UK are concerned that the change in Google’s policy will mean that they must face a painful and/or expensive choice. Either they will have to spend a very large amount of money to outbid their competitors and ensure that they still appear at the top of the list of sponsored links when their trade marks are searched for, or they can opt out of the bidding, but run the risk that competitors will use the brand owner’s trade marks as keywords to win the top sponsored spots and lure potential customers away from the brand owner’s site.

A recent High Court case involving the alleged use of the Community Trademark “Mr Spicy” as a keyword to generate sponsored links next to Yahoo! search results found in favour of Yahoo! rather than the trade mark owner, and it is thought that it was this outcome that encouraged Google to change its policy. The “Mr Spicy” case should not be given too much weight, however. The claimant in the case represented himself rather than using lawyers, the hearing was for summary judgment rather than being a full trial, and the judge found no evidence that the registered mark had itself been used as a keyword (as opposed to use of the purely descriptive term “spicy”).

More importantly, on 20th May 2008 the French Cour de Cassation (the highest court of appeal in France) referred a series of questions to the European Court of Justice (ECJ) in three cases all involving the Google AdWords program. The questions referred to the ECJ cover the unauthorised use of trade marks in keywords so as to generate sponsored links to either counterfeit or competing goods or services, and also the suggestion of trade marks as keywords through the “Keyword suggestion tool.” The ECJ is also asked to rule on whether search-engine service providers such as Google are “information society service providers” and thus benefit like other ISPs from protection from liability until they are put on notice of an infringing use.

As the ECJ’s decisions are binding upon all EU member states, the answers to these questions should ultimately bring some order to the great diversity of approaches that has until now been evident in the courts across Europe. Cases have gone both for and against Google, depending upon the country or the individual court. However, the ECJ can take many months to deliver its judgments, and so the outcome is unlikely to emerge until some time in 2009.

Some brand owners regard the change in Google’s policy as a sufficiently threatening development that they have been actively taking legal advice as to whether it could be challenged in the English courts. There is no clear UK case-law on the subject, notwithstanding the Mr. Spicy case, and so such a step would be a calculated risk. But the ECJ’s judgment will be a long time arriving, and its outcome is uncertain. The importance and urgency of the issues are such that they may still choose to press ahead with litigation on a national basis, rather than wait for the pan-European decision.