Google has decided to change its AdWords policy in the countries of the European Union and EFTA so that it is close to the one already in place in most other countries. This change took place as from September 14, 2010.

This decision is in line with the Google decision of the Court of Justice of the European Union ( hereafter “CJEU”) dated March 23, 2010, Louis Vuitton vs Google,  in which it was held that ” [a]n Internetreferencing service provider which stores, as a keyword, a sign identical with a trade mark and organises the display of advertisements on the basis of that keyword” is not liable of trademark infringement.

This change of policy is not without consequences for trademark holders.

GOOGLE ADWORDS: ADVERTISING AT THE CLOSEST OF INTERNET USERS!

The Google AdWords program allows to display contextual and targeted advertisements corresponding to the Internetusers’ interest.

The program is based on two principles: keywords and geolocation, which, when combined, allow a fine selection of the public targeted by the ad.

Various types of AdWords

There are three options for targeting keywords that determine how Google search triggers the ads:

•    The broad match that allows an ad to appear in the context of searches on
similar expressions and relevant variations. For example, the purchase of the keyword “Television” will trigger the display of an ad if a user does a search on “Samsung TV”;
•    The exact expression that allows the ad to appear in the context of a search corresponding to the exact expression even if it is associated with other terms. For example, buying the keyword “Samsung Television” will trigger the display of an ad if the user does a search on the phrase “flat screen Samsung television”;
•    The exact keyword that allows the ad to show up in the context of a search corresponding only to the exact expression.

The best known and most widely used (probably because it is the default choice) is the broad match. The broad match allows the display of an ad when the user enters one of the terms of the keyword, even when inverted or interspersed with other words.
The ads will show up for all requests regardless of the order in which the key words are entered by the Internet user, even if the request contains other terms.

Today, an ad may be displayed with:

•    the plural or singular forms of the keyword;
•    the synonyms of the keyword,
•    other “relevant alternatives” to the keyword.

Geolocation

The advertising campaigns using Google AdWords take two kinds of geolocation into account:

•    The countries targeted by the campaign (at the discretion of the advertiser);
•    The countries where the ads are viewed  (the physical location of the user,
materialized by the IP address of his computer). It should be noted that this factor is paramount since a Google request on the same term does provide different results depending on the viewing area. For example, a French Internet user making a search on Google Germany (google.de) will not obtain the same results as a German Internet user making the exact same search. Indeed, the geolocation system determines where the Internet user is localized. For example, a search for a restaurant could provide a list of restaurants located at the corner of the street!

The triggering of ads is finally linked to the policy of trademark protection put in place by Google in the concerned countries.

THE EVOLUTION OF THE TRADEMARK PROTECTION POLICY

So far, in the countries of the European Union and in the EFTA countries, except the United Kingdom and Ireland, when a trademark owner sent a complaint to Google, citing unauthorized use of its trademarks in a keyword or in the text of an ad, Google could at its discretion take the decision to disable the keyword and / or withdraw the infringing ad. In prevention, Google could also blacklist trademarks on request of right holders so as to prevent their use in the AdWords system.

What are the consequences for trademark holders as from September 14, 2010?

•    Someone who advertises on Google in Europe may select brands
as keywords to trigger ads. Advertisers have been allowed by Google to use third-party trademarks as keywords in the United States and Canada since 2004, in the UK and Ireland since 2008 and in many other countries since May 2009.
•    Google will no longer blacklists keywords in prevention.
•    The trademarks that had been blacklisted as a preventive measure will be removed from Google’s list and will again be available for registration as keywords.
•    The advertisings based on the principle of broad match (which allows an ad to appear in the context of searches on similar expressions and relevant variations) will be displayed after searches on competing brands.
•    Google will only remove the text ads that may mislead Internet users on the origin of products and services presented in the ads:
– on request of a right holder and after an investigation from Google confirming the infringement;
– on request of a judicial decision.

Furthermore, so as to limit the risk of conflict, the advertisers are simply invited to fulfil a list of “negative keywords”, corresponding to protected trademarks. In case said keywords are used, the ads will not appear. The responsibility is then transferred to the advertiser.

RECENT CASE LAW

The responsibility of advertisers has been reminded and specified in the decision of the CJEU of July 8, 2010, Portakabin vs Primakabin, notably in case of a used goods reseller.

The advertiser can be punished only if the ad creates a likelihood of confusion related to the origin indicator function of the concerned mark. [The owner of a trademark has the right to prohibit someone to advertise with a keyword identical to its mark only if the ad generates confusion: “where that advertising does not enable average Internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or from an undertaking economically linked to it or, on the contrary, originate from a third party”.]

CJUE also specifies that ” a trade mark proprietor is not entitled to prohibit an advertiser from advertising – on the basis of a sign identical with, or similar to, that trade mark, which that advertiser chose as a keyword for an Internet referencing service without the consent of that proprietor – the resale of goods manufactured and placed on the market in the European Economic Area by that proprietor or with his consent, unless there is a legitimate reason, within the meaning of Article 7(2), which justifies him opposing that advertising, such as use of that sign which gives the impression that the reseller and the trade mark proprietor are economically linked or use which is seriously detrimental to the reputation of the mark ” The use of a trademark as a keyword by a reseller can therefore be prohibited only if the use of keyword gives the impression that the reseller and the trademark holder are economically tied or if such use is seriously detrimental to the reputation of the trademark.

These elements will be appreciated at the discretion of the various national courts.

In France, the French Supreme Court in the France vs. Gifam decision dated July 13, 2010 has confirmed the case law of the CJEU including the fact that by offering advertisers the use of third parties trademarks as keywords, Google has not committed any counterfeiting act.

The Court of Appeals also confirmed in the Multipass / Smart & Co decision dated 19 May 2010 that the advertiser makes a mistake when failing to register the protected trademarks as “negative terms” whereas it had been aware of the situation for several months. However, this case concerned a dispute about the broad match and took place in a highly competitive context. The decision should therefore be regarded as being closely related to the facts at issue.

WHAT STRATEGY TO ADOPT?

Taking into account the recent developments in case law and the new policy to protect trademarks implemented by Google, right holders must exercise greater vigilance regarding the use of their trademarks as keywords to identify potential abusive behaviour and take appropriate provisions against advertisers.

Monitoring the use of trademarks as keywords

With the end of the blacklisting of trademarks in the AdWords program, trademark holders have to put in place a specific trademark watch to detect the use made of their marks as keywords by third parties, including their competitors. One major difficulty of this watch is the principle of geolocation advertising, which requires a local presence in each country of interest and an analysis of the detected ads whatever the language of the ad.

Since late June 2010, our law firm has offered a watching system suited to the geolocation principle.  Don’t hesitate to contact us.