Thursday, 14 February 2008

Google Adwords Condemned Again For Trademark Infringement

Court of Appeal of Paris (4th Chamber, Section B), 1 February 2008, De Dietrich, Electrolux, and others v. Google France and Google Inc.

Google Inc is incorporated in the US and exploits a programme called Adwords, which displays banner advertisements (‘commercial links’) when a particular search term is entered in the Google search engine. Google France was incorporated in France in 2002.

GIFAM, a trade association in the field of household equipment, and the holders of trademarks (such as De Dietrich, Electrolux, Hoover, etc…), brought an action on the grounds of trademark infringement against Google Inc and Google France, which was dismissed by the High Court of First Instance of Paris (12 July 2006, GIFAM and others v. Google France).

The plaintiffs argued that the Adwords system infringes on their trademarks as it uses a keyword generator and broadcasts advertisements that may lead the public to believe that the advertisers are related to the companies who own the trademarks. Moreover, they claimed that the Google companies infringed on their rights to their corporate names and their domain names, and committed acts of misleading advertising by using ‘commercial links’ and carrying out classifications of the trademarks that lead consumers to misrepresent the relationships that the companies may have with the sites of the advertisers who use their trademarks illegally. They lodged an appeal against the High Court’s judgement that had dismissed their action.

The Court of Appeal, in its decision dated 1 February 2008, reversed the High Court’s judgement, stating that the Adwords system is a public service that is ‘contextual advertising’, in which the Google companies play an active role. They may not, therefore, be considered as hosting providers in the meaning of Article 6 the French Act of 21 June 2004 on Confidence in the Digital Environment (which implemented the Directive 2000/31/EC of 8 June 2000 on certain legal aspects of information society services - ‘Directive on electronic commerce’).

The Court considered that with the Adwords service, Google acts as an advertising provider, and that a large part of its profits is related to the frequency with which the advertiser’s website is consulted. Furthermore, Google is responsible for the trademarks appearing with the products or services in question on the screens of the Internet users.

The Court rejected Google’s arguments. Google’s defence was that the service works in a purely statistical way, and solely at the request of the advertisers. Indeed, the Court considered that it was Google who put this system in place, that it knew how it worked, and that it offered its use to the advertisers. Moreover, the fact that the advertisers were warned by announcements displayed on the pages of the Adwords system is irrelevant since Google chose to reproduce the trademarks.

The Court of Appeal therefore ruled that Google’s use of the trademarks breaches Article L.713-2 of the French Intellectual Property Code, which prohibits the reproduction, use or affixing of a trademark, or the use of a reproduced trademark for goods or services that are identical to those designated in the registration. The Court underlined that Google did not challenge the fact that the trademarks were identical to those reproduced in the lists provided by the keyword generator.

This is not the first French decision condemning the Google Adwords system. In a decision dated 6 December 2007, the Court of Appeal of Aix en Provence ruled that the use of the keyword ‘Remote-Anything’ (a registered trademark) in connection with the same types of products as those protected by the trademark, without the authorisation of the owner of the trademark, is act of infringement of the said trademark. The Court underlined that Google Inc and Google France had played an active role, and could not be considered as mere ‘technical providers’. Since they displayed advertising messages in the form of commercial links for advertisers who paid them for these services, they were to be held liable under trademark law. In particular, they approved the chosen keywords (a choice which is made by the advertisers with Google’s assistance) and were supposed to verify that the commercial links did not infringe any rights of third parties. Moreover, they could not allege that it was impossible to carry out such verification beforehand for supposedly material, legal and economic reasons. The Court added that even if it had been established that it was impossible to carry out such verification, Google Inc and Google France had to either simply abandon this activity or bear the consequences attached (see our blog: