Google Adwords and the Court of Justice

The sale by Google of so-called Adwords does not infringe corresponding trade marks, according to Advocate General Poiares Maduro in his opinion issued today. You might wish to jump straight to the conclusion of the Opinion, the last pargraph - nuumbered 155: in fact, I'll paste it here.

155. In view of the above, I propose that the Court state in answer to the questions referred by the Cour de cassation:

(1) The selection by an economic operator, by means of an agreement on paid internet referencing, of a keyword which will trigger, in the event of a request using that word, the display of a link proposing connection to a site operated by that economic operator for the purposes of offering for sale goods or services, and which reproduces or imitates a trade mark registered by a third party and covering identical or similar goods, without the authorisation of the proprietor of that trade mark, does not constitute in itself an infringement of the exclusive right guaranteed to the latter under Article 5 of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks.

(2) Article 5(1)(a) and (b) of Directive 89/104 and Article 9(1)(a) and (b) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark must be interpreted as meaning that a trade mark proprietor may not prevent the provider of a paid referencing service from making available to advertisers keywords which reproduce or imitate registered trade marks or from arranging under the referencing agreement for advertising links to sites to be created and favourably displayed, on the basis of those keywords.

(3) In the event that the trade marks have a reputation, the trade mark proprietor may not oppose such use under Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94.

(4) The provider of the paid referencing service cannot be regarded as providing an information society service consisting in the storage of information provided by the recipient of the service within the meaning of Article 14 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the internal market (‘Directive on electronic commerce’).

So, what goes on between Google and the purchaser of the keyword does not involve anything that could amount to trade mark infringement. The AG stressed that this does not involve selling anything to the public: there is no use of the trade mark in relation to the goods or services covered by it. And internet users should have access to information about the goods or services sold under the trade mark, without the trade mark owner being able to control that information, said the AG, adding "the mere display of relevant sites in response to keywords is not enough to establish a risk of confusion on the part of consumers as to the origin of goods or services ...”

Nor does what the advertiser does with the keyword amount to trade mark infringement, either. Nothing in the use of key words necessarily creates consumer confusion: it does not send a message about the origin of the goods or services.

This is all rather difficult to reconcile with earlier opinions from the CJEC, which have told us that what we used to call "trade mark use" wasn't the defining factor in an infringement action any more, that we should watch out instead for an act on the part of the defendant that reduced the ability of the trade mark to serve as an indication of origin. That's something that the most innocent use of another's trade mark is likely to do, so it's an approach that favours the absolutists - the trade mark owners who'd like their trade marks to be more like copyright (or even, perhaps, patents). This latest opinion clicks the ratchet back a few notches - and I hope the Court follows it (and then continues further down that route to reintroduce the common sense about what trade marks are about that seems to have been lacking for a while).

The AG also took the view that Google were not able to invoke the protection of teh E-Commerce directive and claim that, as Information Society Service providers, they had no liability for the information conveyed through their service. Because they had a direct pecuniary interst in Adwords, the AG suggested, they cannot have the protection of the directive. Which is not to say that Google will necessarily be liabile for infringements committed by Adword purchasers, but that depending on the circumstances they might not be able to hide.

I am in two minds - perhaps more - about all this. On the one hand, Google's trafficking in trade marks, making a substantial profit from their dealings, is distasteful, but on the other the claim of trade mark owners to control completely the message conveyed by their trade mark is also distasteful. Legitimate retailers also have an interest in using the trade mark's message, and the trade mark owners' ire should be directed against (and reserved for) counterfeiters, or pirates, call them what you will. Perhaps my discomfort comes from the fact that, as in so many other areas of life, we find ourselves - all of us, including trade mark owners - in thrall to private businesses: Google in this case, in the same way that the Murdoch empire controls so much of the media around the world and Microsoft controls such a large part of the software market - and, worse still, people do not generally seem to find this worrying.

Picture agencies and unauthorised use

Out-Law reports that Getty Images has recovered nearly £2,000 in damages (and its legal costs) from a removal company that used one of Getty's images on its website. Pinsent Mason, the firm that publishes Out-Law, acted for Getty.

The damages were awarded to Getty despite that fact that the defendant removed (appropriate!) the image from its site as soon as it received a letter about it. Most recipients of similar letters react the same way - then they plead innocence, perhaps on the basis that their website designer (make that ex-website designer) had done it. Alternatively, as in this case, they then ignore it and hope it will go away. Getty are not the sort of people who are inclined to go away.

I sympathise with all concerned, to some extent. Getty are not selling their own work: they represent professional photographers, who need to protect their copyright. They cannot allow infringements to pass unremarked. On the other hand, the defendant could be (pretty) innocent, which might give them protection from paying damages for infringing. They probably should have dealt more carefully with the matter in the contract with their website designer (but there often isn't a contract at all), and the website designer should have known better - after all, they are charging a fee to do the work and should do it professionally. They should also know that just because they didn't get it from the picture agency's site, there might not be an agency somewhere that has a right to be paid.

What I don't have much sympathy with is the heavy-handed attitude of the agencies, or the way they go about collecting what is due. They don't usually threaten to sue for copyright infringement, which would be expensive and uncertain: they send an invoice and then claim when it isn't paid. They can do that in the small claims court rather than the High Court, although what happened here is that they did sue for infringement in the High Court. They probably thought it worthwhile pour encourager les autres: it's also useful when your lawyers produce a widely-read journal in which it can be publicised, a very astute move by Pinsent Mason.

The normal measure of damages in a case like this would be (as Out-Law notes) the commercial rate for the use of the picture. Getty also claimed the cost of tracking down the infringement along with additional damages, available if the infringement is flagrant, and what they referred to as "insidious damages", representing the damage caused to their ability to charge a commercial rate to other users. The settlement agreement does not explain what happened to these claims, but £2,000 sounds like the standard-rate charge without either of these types of extra damages.