Litigation: A keyword for Google?

Litigation: A keyword for Google?Many lawyers acting for brand owners will have felt the shockwaves emanating from Google’s recent controversial change to its policy regarding the use of trade marks as keywords in the UK and Ireland.

In broad terms, keyword advertising systems allow advertisers to bid for particular terms or phrases. When a search is conducted which includes those keywords, a sponsored advertisement and link to the advertiser’s website is automatically generated above or alongside the ‘natural results’ of the search. Advertisers pay a fee to Google each time someone clicks on their sponsored link.

The policy that previously applied – and which still applies outside the UK, Ireland and North America – was for Google to protect trade mark owners from third parties from using their marks in keywords. Google’s rationale for the change is that they are seeking to bring policy in line with North America and to provide their users with the most relevant information when a search is conducted. But what does this mean for brand owners? What was behind the decision to change the policy at this moment in time and why change the policy in UK and Ireland but not the rest of the EU?

Brand owners in the UK are concerned that the change means that they may have to commit to a significant budget to outbid their competitors, so as to ensure that they appear at the top of the list of sponsored links when their trade marks are searched for. Or they can opt out of the bidding, but run the risk that competitors will use the brand owner’s trade marks as keywords to win the top sponsored spots and lure potential customers away from the brand owner’s site.

Whilst brand owners will still be able to take action against third parties who use their trade marks in a manner that amounts to trade mark infringement and/or passing off, this is far from ideal as it requires a constant monitoring of the marketplace and expensive enforcement against individual transgressors. What brand owners really want is the one-hit solution of Google reversing its policy, so that Google effectively continues to police such usage, thus saving them considerable time and expense. With the change effected and a volte-face improbable this is only likely to happen if Google itself is found to have infringed a trade mark through its usage of that mark as a keyword.

The proximity between the announcement of the policy change and the decision in the Mr Spicy decision (Wilson v Yahoo! UK Ltd [2008]) is unlikely to be a coincidence. In this case a claim by Wilson that the defendants had infringed his community trade mark for “Mr Spicy” through the use of a keyword was summarily dismissed. As no use of had been made of the key word “Mr Spicy” by the defendants, but merely the generic reference SPICY for food containing spice, the allegation of infringement of an identical trade mark was going nowhere. To the distress of trade mark owners Morgan J concluded that use by a search engine of a trade mark term as a keyword did not infringe a registered trade mark.

Whilst apparently seized upon by Google, the Mr Spicy decision needs to be treated with some caution. The claimant in the case was unrepresented, the hearing was for summary judgment rather than full trial and the registered mark relied upon had not actually been used as a keyword. Furthermore, the question of what constitutes ‘trade mark use’ is one of the most hotly debated (and litigated) aspects of trade mark law of the last decade.

The decision not to change policy in the rest of Europe is indicative that the position of brand owners may be more favourable on the continent, where cases have gone both for and against Google depending upon the country or the individual court. For this reason any clarification by the ECJ on this topic would be of considerable importance. On 20 May 2008, the French Cour de Cassation referred a series of important questions to the ECJ in three cases, all involving the Google AdWords program. It has asked the ECJ to provide definitive answers on a number of issues relating to the unauthorised use of trade marks in such keyword advertising. While it will take many months for the ECJ to issue its rulings, it is hoped that they will ultimately help bring some clarity to the diversity in national approaches.

There has been much speculation in the press regarding the likelihood of certain brand owners taking action against Google. However, it may be that brand owners are waiting to assess the commercial impact on their business and/or the views of the ECJ before considering taking Google on. In the meantime, Google will no doubt be hoping that their revised policy has time to settle down and that brand owners will find that it is less of a threat than they had originally feared.

Dominic Farnsworth is a partner in the Media Brands and Technology team at Lewis Silkin