More AdWords …! A quick lunch time post to let our readers know that the European Court of Justice’s (CJ) decision in the German AdWord referral in “Eis.de GmbH v BBY Vertriebsgesellschaft mbH”, in short: “Eis.de” (case C-91/09) has now been published. The case was originally called “Bananabay” in Germany (case reference: I ZR 125/07). For more background on this case, please see the IPKat’s earlier posts here and here.

In a mere court order of 26 March 2010, the ECJ has now also answered the German Federal Supreme Court’s (Bundesgerichtshof) question on AdWord use. The outcome is a bit of an anti-climax and if you think you have read it all before, well, you are not mistaken. The CJ’s response in Eis.de is almost identical to that given in the Austrian BergSpechte referral of 26 March 2010 (Case C-278/08, see the IPKat’s post here) and very similar to the CJ’s responses in Google France (joined Cases C-266 to 238/08, see the IPKat’s post here and here) of 23 March 2010. The CJ cites joined Cases C-266 to 238/08 in almost every paragraph of Eis.de. Most notably the court refers to paragraphs 65-73, 79, 81, 83 -84, 89 – 90, 98 of cases C-266 to 238/08.

Please note that this blog post is based on the IPKat’s translation of the German version of the order since we do not yet have an official English translation. The Eis.de case was based on the following facts: the claimant and the defendant both sold adult entertainment products. The claimant who owned a trade mark registration for “bananabay” sought to stop its competitor’s use of that trade mark as an ‘AdWord’ claiming trade mark infringement and seeking damages.

The Bundesgerichtshof had referred the following question to the CJ:

“Is there use for the purposes of Article 5(1)(a) of Directive 89/104/EEC where a third party provides as a keyword to a search engine operator a sign which is identical with a trade mark, without the consent of the proprietor of that trade mark, so that, on inputting the sign identical with the trade mark as a search term into the search engine, an electronic promotional link to the third party’s website advertising identical goods or services appears in an advertising block set apart from the list of search results, that link is marked as a sponsored link and the advertisement itself does not comprise the sign nor contain any reference to the trade mark proprietor or to the products it is offering for sale?”

Here is the IPKat’s translation of the German version of the CJ’s response:

“Article 5(1)(a) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks must be interpreted as meaning that the proprietor of a trade mark is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical that trade mark which that advertiser has, without the consent of that proprietor, selected in connection with an internet referencing service, goods or services identical with those for which that mark is registered, in the case where that advertising does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or by an undertaking which is economically connected to it or, on the contrary, originate from a third party.”

Well, says the IPkat, no surprises here then?

Wearing her German hat and munching away on her lunch time salad Merpel muses: nein, I am really not surprised either. The CJ’s reasoning in large parts appears to be an extension of the Bundesgerichshof’s advertising and technology friendly precedents in the pcb and Beta-Layout cases. However, while it is quite certain that the Bundesgerichtshof will decide that the origin function is not adversely affected, don’t we think that the Bundesgerichshof might have to fine tune its line of argumentation just a tiny bit in relation to company names and AdWord use, with the CJ holding that it is not enough that the triggered ad is clearly labelled as a “sponsored link”, the ad also must not be vague? What do our (German) readers think? And one more thing, why did the CJ only hand down an order and not a full judgment for the German referral?

Please click here to read the CJ’s order in its German/French entirety.

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Google’s motion for summary judgment was granted by US District Judge Gerald Bruce Lee of the Eastern District of Virginia (4th Circuit) in the trade mark infringement and AdWords litigation brought against them by Rosetta Stone. This marks the latest of three cases (Geico v Google and Rescuecom v Google) to have gone before a judge in the U.S., but again without a full trial on the issue of likelihood of confusion in an AdWords case. Tom Adams, CEO of Rosetta Stone stated:

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Hot off the press, the IPKat brings you news of this morning’s ruling in Joined Cases C-236, 237 and 238/08 Google France, Google Inc. v Louis Vuitton Malletier; Google France v Viaticum Luteciel; Google France v CNRRH Pierre‑Alexis Thonet Bruno Raboin Tiger, a franchisee of Unicis. The factual backgrounds of the three cases, all of which have been referred from the French Cour de Cassation, are as follows:

Case C‑236/08 Google France, Google Inc. v Louis Vuitton Malletier

It was established at trial that (i) entering Louis Vuitton’s trade marks into Google’s search engine triggered the display of advertisements for sites offering counterfeit versions of that company’s products and that (ii) Google offered advertisers the possibility of selecting, to that end, not only keywords which corresponded to Louis Vuitton’s trade marks but also those keywords in combination with expressions denoting counterfeit such as ‘imitation’, ‘replica’ and ‘copy’. These facts led to Google being held liable trade mark infringement, a decision which was upheld on appeal. Google thereupon appealed on points of law to the Cour de cassation. That court referred for a preliminary ruling the following three questions:

‘(1) Must Article 5(1)(a) and (b) of [Directive 89/104] and Article 9(1)(a) and (b) of [Regulation No 40/94] be interpreted as meaning that a provider of a paid referencing service [ie Google] who makes available to advertisers keywords reproducing or imitating registered trade marks and arranges by the referencing agreement to create and favourably display, on the basis of those keywords, advertising links to sites offering infringing goods is using those trade marks in a manner which their proprietor [in this case Louis Vuitton] is entitled to prevent?

(2) In the event that the trade marks have a reputation, may the proprietor oppose such use under Article 5(2) of the directive and Article 9(1)(c) of the regulation?

(3) In the event that such use does not constitute a use which may be prevented by the trade mark proprietor under the directive or the regulation, may the provider of the paid referencing service 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], so that that provider cannot incur liability until it has been notified by the trade mark proprietor of the unlawful use of the sign by the advertiser?’

Case C‑237/08 Google France v Viaticum Luteciel

Viaticum and Luteciel own French trade marks ‘bourse des vols’, ‘bourse des voyages’ and ‘BDV’. It was found at trial that, (i) by that entering Viaticum and Luteciel’s trade marks into Google’s search engine, the display of advertisements for sites offering identical or similar products was triggered and that (ii) Google offered advertisers the possibility of selecting for that purpose keywords which corresponded to those trade marks. However, the products sold on the advertised sites did not infringe those trade marks in question since they bore trade marks attributed to competitors of Viaticum and Luteciel. Google was held liable for trade mark infringement and, on appeal, of being an accessory to trade mark infringement. Google thereupon appealed to the Cour de cassation, which has referred two questions to the Court for a preliminary ruling.

‘(1) Must Article 5(1)(a) and (b) of [Directive 89/104] be interpreted as meaning that a provider of a paid referencing service who makes available to advertisers keywords reproducing or imitating registered trade marks and arranges by the referencing agreement to create and favourably display, on the basis of those keywords, advertising links to sites offering goods identical or similar to those covered by the trade mark registration is using those trade marks in a manner which their proprietor is entitled to prevent?

(2) In the event that such use does not constitute a use which may be prevented by the trade mark proprietor under the directive or [Regulation No 40/94], may the provider of the paid referencing service 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], so that that provider cannot incur liability before it has been informed by the trade mark proprietor of the unlawful use of the sign by the advertiser?’

Case C‑238/08 Google France v CNRRH Pierre‑Alexis Thonet Bruno Raboin Tiger, a franchisee of Unicis

CNRRH is the holder of a licence for the French trade mark ‘Eurochallenges’, granted by Mr Thonet, the proprietor of that trade mark. At trial it was established (i) that entering ‘Eurochallenges’ into Google’s search engine triggered the display of advertisements for sites offering identical or similar products and (ii) that Google offered advertisers the possibility of selecting such a term as a keyword for that purpose. As in the second reference, the products offered on those sites did not infringe that trade mark and have been attributed to competitors. At trial. Google, Raboin and Tiger were held liable trade mark infringement, a decision which was upheld on appeal. Google and Tiger then filed separate appeals before the Cour de cassation, which referred three questions to the Court for a preliminary ruling.

‘(1) Does the reservation by an economic operator, by means of an agreement on paid internet referencing, of a keyword triggering, in the case of a request using that word, the display of a link proposing connection to a site operated by that operator in order to offer for sale goods or services, and reproducing or imitating a trade mark registered by a third party in order to designate identical or similar goods, without the authorisation of the proprietor of that trade mark, constitute in itself an infringement of the exclusive right guaranteed to the latter by Article 5 of [Directive 89/104]?

(2) Must Article 5(1)(a) and (b) of [Directive 89/104] be interpreted as meaning that a provider of a paid referencing service who makes available to advertisers keywords reproducing or imitating registered trade marks and arranges by the referencing agreement to create and favourably display, on the basis of those keywords, advertising links to sites offering goods identical or similar to those covered by the trade mark registration is using those trade marks in a manner which their proprietor is entitled to prevent?

(3) In the event that such use does not constitute a use which may be prevented by the trade mark proprietor under the directive or [Regulation No 40/94], may the provider of the paid referencing service 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], so that that provider cannot incur liability before it has been informed by the trade mark proprietor of the unlawful use of the sign by the advertiser?’

The Advocate General advised the Court to rule as follows:

(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 … 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 … 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’).

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Last week the AmeriKat was on her way back from the City donning her apropos snazzy (pin)stripes , when instead of taking the normal route home she decided to take an entirely different route. Prowling through the deserted streets of the City and finally meandering down to Embankment, the AmeriKat soon found herself lapping up a tea at Starbucks gazing out at the passing world. Her decision to walk a different path that evening greeted her with unexpected surprises – commencing with a nearby friend coincidentally joining her for tea and ending with her devouring an entire plate of incredible smoked salmon crudités and truffles. Not bad for deciding to take a different path.

(image upper left – the AmeriKat comes face to face with her soon-to-be crudité)

AdWords saga takes a new turn

Last week computer repair company Rescuecom also decided to take a different route after deciding to abandon their trade mark infringement law suit against Google. Rescuecom had claimed that Google infringed their trade mark by permitting competitors to purchase its trade mark as a keyword as part of the Google AdWord program. In 2006, a New York court ruled that the activity was not illegal because trade mark law only controlled the use of a mark “in trade” – such use, said the court, was not present here. However, last April the US Circuit Court of Appeals vacated this earlier ruling due to a misapplication of the ratio in 1-800 Contacts v WhenU and reinstated the case. The only issue to be decided at the re-instated trial was identical to the issue in the upcoming Rosetta Stone claim: whether there exists confusion on the part of consumers by Google’s use of the complainant’s marks. However, it will now be the Rosetta Stone case that will have to answer this question (the case is scheduled for a six day trial set to commence on 3 May 2010).

So why have Rescuecom dropped the suit now? Although Rescuecom stated that they “can declare victory” in the Google dispute (despite withdrawing the case and therefore not being awarded any relief), some commentators suggest that the timing is all telling. A few weeks ago Rescuecom became further involved in another keyword legal dispute, but this time as a defendant. Best Buy, a US speciality retailer of electronics (who own 50% of the UK’s Carphone Warehouse), commenced proceedings against Rescuecom for their use of the ad keyword “geek squad” – the trade mark of Best Buy’s Geek Squad. Now that the AdWord shoe is on the other foot, Rescuecom is of course arguing that the use of Geek Squad “did not give rise to a likelihood of confusion.” Prior to this, Rescuecom had made an application for declaratory judgment that their use of “geek squad” was permitted for the purpose of comparing Geek Squad’s repair service to that offered by Rescuecom. David Millman, Rescuecom’s CEO, stated that

“If you actually look at our ads in the Best Buy case, they’re very, very clear. We’re drawing a distinction. No reasonable person could ever think that our ad is for that company.”

By abandoning its claim against Google, Rescuecom will no longer be placed in a tense position

of having to advance arguments of confusion in one claim and advancing a defence centered on the absence of confusion in another case. The AmeriKat is amused that Rescuecom now finds itself fighting alongside Google in the AdWords litigation. According to this post from Eric Goldman, there are at least eight pending AdWord cases in the U.S., including the anticipated Rosetta Stone case.

Last week, a Californian federal judge dismissed parts of a trade mark infringement, false advertising and other claims brought by entrepreneur Daniel Jurin against Google last year over the the AdWords program. US District Court Judge Morrison England (“Great name!”, says AmeriKat) dismissed several of Jurin’s claims, including the allegation that Google confused consumers to the origin of the producer of StyroTrim, the building material made by Jurin, by displaying links to other companies when the term “StyroTrim” was searched. Judge England stated that Google “does not provide the content of the ‘Sponsored Link’ advertisements. It provides a space and a service and thereafter charges for its service. . .”, i.e., Google sells ad space, not keywords. Judge England also stated that

“even if one accepts as true the allegation that a ‘Sponsored link’ might confuse a consumer, it is hardly likely that with several different sponsored links appearing on a page that a consumer might believe each one is the true ‘producer’ or ‘origin’ of the Styrotrim product”

The only case to go to trial in the States over the AdWords issue was the 2004 Geico v Google case brought in Virginia which resulted in a victory for Google. Geico was unable to establish the requisite evidence that consumers were confused when they entered “Geico” into a search and were confronted with ads for other insurance providers.

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The latest chapter of the “Brand Owners v Counterfeiters” saga seems again to be playing out in favour of brand owners, with last week’s decision of a Paris District Court holding eBay responsible for facilitating the sale of counterfeit Louis Vuitton products. In a guest post, the IPKat’s friend Venya Wijegoonewardene (Gallant Macmillan LLP) reports on the tail:

Last week a Paris court awarded Louis Vuitton Moet Hennessy (the parent company of the luxury handbag brand Louis Vuitton) €200,000 in damages and €30,000 in costs in their trade mark infringement claim against eBay. The internet giant was ordered to pay these damages to LVMH for “harming the reputation of Louis Vuitton trade marks, the company name and the domain name.” The dispute originated in 2006 when Louis Vuitton, in order to preserve its brands’ luxury status, commenced proceedings against eBay for their purchasing of misspelled words similar to the Louis Vuitton mark from search engines such as Yahoo and Google.

Although it is accepted business practice for companies such as eBay to purchase search-related keywords, including misspelled terms, to direct web-traffic to their websites, the French court held that by purchasing misspelled terms such as “Louis Viton” and “Wuiton”, eBay enabled counterfeiters to flog their wares on eBay. eBay defended their position by stating that this was how the search system worked: it automatically purchased the misspelled words as commercial links, redirecting consumers to their website to purchase genuine Louis Vuitton goods.

Although the final award was substantially lower than the initial amount claimed by LVMH (a mere €1.2 million), the court was firm in placing the responsibility of the infringement squarely on the shoulders of eBay. The court also ordered that eBay would additionally have to pay a €1,000 penalty every time search-related keywords that “harmed the reputation of the Louis Vuitton brand” were used in the future.

LVMH is the world’s biggest luxury conglomerate and boasts some of the world’s biggest ‘snob-tags’ [attribution for that phrase goes to Lord Justice Jacob in his closing speech at the IBIL and OFT Seminar on Brand Protection and Competition], including Moet, Dom Perignon and Marc Jacobs. Vuitton’s continued triumph in the French courts will not come as a surprise. Brand owners like LVMH have resorted to the sympathetic French courts in the pursuit of controlling a brand’s image, reputation and status. A spokesperson for LVMH welcomed the move, stating that French ruling protects consumers from becoming a victim due to the “illicit use of trade marks”. However, the extent to which such actions are really in the interest of the consumer has been questioned. These actions may be viewed as efforts by brand owners, such as LVMH, to preserve the elitist ‘snob-status’ of the luxury brand. For example, whether the discerning Louis Vuitton consumer would shop for the signature monogrammed handbag on eBay with the availability of genuine brands on high-end websites such as www.outnet.com is open to doubt.

Yohan Ruso, managing director of eBay France, accused LVMH of wanting to “tarnish the image of eBay” and cited the fine as being “totally disproportionate” [Good for you, eBay – you're also a brand owner and there is no reason why luxury brands should monopolise the use of the “brand status” argument]. According to this report from Reuters, the eBay statement declared that “this issue is being used by certain rights owners as an excuse to retain total control of what people can buy, where they can buy it from and how much they have to pay,” Ebay said in a statement.” They stated that the judgment “flies in the face” of a recent Belgian victory in eBay’s favour [do any IPKat readers have a copy of this decision?].

This decision has expectedly tipped the scales in favour of brand-owners. But with eBay ever-ready for the fight, this battle is far from finished”.

The IPKat suggests readers once again peruse the 2006 French decision that deemed Google to have infringed Louis Vuitton’s trade marks by selling search-related keywords (reported by the IPKat here). Google was ordered to pay €300,000 in damages for trade mark counterfeiting in that case. This past September, LVMH also secured a $32.4 million judgment in their favour against an ISP in California for contributory trade mark infringement in the selling of counterfeit products (see this AmeriKat post). So perhaps the French courts are not the only favourable forum for luxury brand owners …

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