Court of Appeal copyright dispute ‘might never have arisen’ if parties had sought legal advice
Out-Law Guide | 27 Mar 2006 | 10:13 am | 7 min. read
Trade mark registrations are powerful legal tools. A trade mark registration gives the proprietor of the registration the exclusive right to use that term in the course of trade in relation to the goods or services for which it is registered in the country where it is protected. Subject to a number of limitations, a trade mark registration is infringed by using a term which is identical or similar to the registered trade mark in the course of trade in relation to goods and services which are identical or similar to the goods and services for which the registration is granted. (See Legal Info About Trade Marks)
Complications can arise online with search engine "keyword" marketing, adware and in meta tags. Each of these issues is examined in separate guides.
Google AdWords and Yahoo! Search Marketing (formerly Overture) are the leading online services that allow anyone to sponsor search terms, or keywords. When a search is entered, sponsors' ads will appear alongside the organic listings. Sponsors pay a fee for every click on their ads, usually up to a daily limit of their choosing.
Lawsuits have been filed against both companies by trade mark owners, upset that some rivals' ads are triggered by searches on their trade marks and/or because rivals' ads make reference to their marks.
Both Google and Yahoo! have their own trade mark policies.
Google's trade mark policy for AdWords differs according to the geographic location of a trade mark holder.
For those with marks in the US and Canada, Google will investigate complaints from the trade mark owner about the appearance of its marks in the ads of rivals. However, it will not consider complaints about the sponsorship of those marks. So in theory, Nike could sponsor the keyword "Reebok", provided its ad made no reference to Reebok. Google appears not to tolerate references to others' trade marks in an advert once that advert becomes the subject of a complaint. On the other hand, it is reactive in dealing with complaints: it generally does not monitor ads for trade mark infringement at the time they are placed.
For trade mark owners outside the US and Canada, Google will investigate complaints about the appearance of marks in ads and the use of trade marks as keyword triggers. So in the example above, Reebok could complain about Nike sponsoring its brand name.
Yahoo! has a different policy which is more accommodating of comparative advertising than Google's.
"Advertisers sometimes bid on search terms that are the trademarks of others. For bids on search terms in Yahoo! Search Marketing's Sponsored Search service, Yahoo! Search Marketing (formerly Overture Services, Inc.) requires advertisers to agree that their search terms, their listing titles and descriptions, and the content of their Web sites do not violate the trademark rights of others. In cases in which an advertiser has bid on a term that may be the trademark of another, Yahoo! Search Marketing allows the bids only if the advertiser presents content on its Web site that (a) refers to the trademark or its owner or related product in a permissible nominative manner without creating a likelihood of consumer confusion (for example, comparative advertising, sale of a product bearing the trademark, or commentary, criticism or other permissible information about the trademark owner or its product) or (b) uses the term in a generic or merely descriptive manner. In addition, the advertiser's listing should disclose the nature of the relevant content."
There are various other editorial guidelines for both services, to prevent the sponsorship of other terms. Sites or keywords that promote counterfeit products, drugs, weapons, violent images, gambling, prostitution or defamatory material, for example, would fall foul of Yahoo!'s editorial guidelines.
Perhaps unsurprisingly, both Google and Yahoo! encourage advertisers to try to sort out disputes among each other directly.
Google's differing policies for the US and Canada and the rest of the world reflect various court rulings on AdWords disputes in the US and Europe.
The GEICO case: In the US, the most recent judicial guidance comes from a case decided in December 2004 (albeit Judge Leonie Brinkema's written opinion was not published until August 2005). Here, Google was partially successful in defeating a claim from GEICO, an auto insurance firm, concerning the sale of GEICO’s registered trade marks as AdWords. These triggered the listings of rival insurance websites.
The claim was defeated in relation to the triggering of ads which made no visible use of the registered marks or GEICO (i.e. Google can continue selling "GEICO" as a keyword to the highest bidder).
However, Judge Brinkema reasoned that GEICO had provided sufficient evidence of confusion between the use of its trade marks in the text and headings of sponsored links and its brands. (While Google has always had a policy of removing ads that use a complainant's marks in their headings or text, some ads slip through the net.)
In order to succeed in the infringement action, GEICO had to prove that Google’s use of GEICO's trade marks was “likely to confuse an 'ordinary consumer' as to the source or sponsorship of the goods or services”. GEICO argued that Google’s use of its trade marks caused “initial interest” confusion. In the internet context, this term describes the distraction or diversion of a potential customer from the website he was initially seeking to another site, based on the user's belief that the second site is associated with the one he originally sought. Inherent in this concept is the risk that the user will be satisfied with the second site or sufficiently distracted that he will not arrive at or return to the site for which he was originally searching.
Further, GEICO pointed out the unique nature of the car insurance market and its business model. GEICO contended because customers seek an average of fewer than two quotes before purchasing car insurance, the company would lose significant business from the alleged initial interest confusion that misdirects potential customers who originally searched for ‘GEICO’ to sites where they can obtain other companies' quotes, but not GEICO’s. Also potential customers of GEICO’s services can get GEICO rate quotes only directly from the company. Links that appear when users search for ‘GEICO’ and that advertise other sites' ability to provide rate quotes for car insurance, even from unnamed companies, are misleading because of the implied association with GEICO.
GEICO’s evidence had principally consisted of consumer survey evidence. Had GEICO's survey methodology been better, the result may have been different. And mindful of the importance of the issues before her "to the ongoing evolution of internet business practices and to the application of traditional trademark principles to this new medium," Judge Brinkema was careful to emphasise that her ruling "applies only to the specific facts of this case". Google and GEICO eventually settled out of court, leaving unanswered the question of whether Google or its advertisers should be liable for damages for the use of GEICO's trade marks in the headings and text of Google's sponsored links.
European actions: Infringement actions have been launched in Germany against Google and France.
In April, the Court of Appeal in Versailles upheld a decision against Google France over AdWords. Online travel agents Luteciel and Viaticum operated websites La Bourse Des Vols (“flight market”) and La Bourse des Voyages (“travel market”) and Google had sold the term ‘bourse des voyages’ and ‘BDV’ to Lutecial’s competitors as a trigger for sponsored links to the competitors' websites. Google suffered a similar defeat when it sold the trade marks of Louis Vuitton Malletier SA as search terms to a trader which triggered links to sites selling counterfeit Louis Vuitton products.
Overture Inc. has lost in similar circumstances in France.
In the UK, there have been no decisions on Google AdWords, but there has been a decision that examined the triggering of banner ads on Yahoo!
This case, Reed Executive plc v. Reed Business Information Ltd, gives reason to suggest that a UK court is more likely to follow the US reasoning on AdWords than the reasoning of the French courts.
Reed Business Information Ltd ran a recruitment site called totaljobs.com. Searches on Yahoo! for the word "Reed" would trigger the display of a banner ad for totaljobs.com on the results page. This upset Reed Executive – which sued Reed Business Information, alleging trade mark infringement.
The banner ads were principally branded under the mark totaljobs.com and the only reference to the mark Reed was in the copyright notice at the bottom of the advertisements when reference was made to Reed Business Information Limited.
Justice Jacobs found that the public would not be confused into thinking that a banner carrying the brand totaljobs.com was in some way connected to Reed Employment simply because that advert included a copyright notice which made reference to the Reed mark.
The judge seemed to accept that there is much clutter in search engine results and that the public has become educated not to make a direct association between the keyword they type into a search engine and any pop-up advert that may appear.
The outcome of the case may well have been very different if the totaljobs advert had made much more prominent use of the mark Reed.
So in the UK, the sale of trade marks as AdWords to competitors might be permitted, notwithstanding Google's non-US policy to block them; but the triggering of ads that mention the trade marks could be blocked (which follows both Google's US and non-US policies).
While we recommend that you register your brands as trade marks, we also recommend that you carry out regular search engine searches using your trade marks as search terms to see if they throw up search listings of your competitors. If they do, you may have a remedy.
Court of Appeal copyright dispute ‘might never have arisen’ if parties had sought legal advice