Google Fends Off More Challengers to its Keyword Advertising

 

By Lisa Fleming, a member of the firm's Litigation Practice Group

 

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wo recent rulings in the area of keyword advertising add to the growing list of decisions that bolster Google in its ongoing battle with trademark owners over use of keyword advertising. An additional victory in the copyright area supports the company’s image-search service.

The trademark litigations, like many before them, were provoked by Google’s practice of allowing advertisers, through Google’s Adwords service, to purchase keywords corresponding to their competitors’ trademarks. Google’s use is limited to allowing advertisers to select keywords so that their advertisements are presented as results.

When a user searches for a particular trademark, ads for relevant words are shown as "sponsored links" on the screen. Many an owner of a strong trademark has been irked to no end that competitors use their mark on Google to draw attention to their ads and websites.

On March 23, 2010 the European Court of Justice issued an important opinion in a case brought by luxury retailing icon Louis Vuitton. The court held that Google’s act of providing a “referencing service” (namely, Adwords), which stores trademarks for use as keywords, and then organizes the display of ads on the basis of those keywords, does not “use” the trademarks within the meaning of European Union trademark laws.

The ruling does not prevent the trademark owner from directly suing advertisers that use its mark to reach their target audience. This is because “the internet user may err as to the origin of the goods or services in question. The function of the trade mark, which is to guarantee to consumers the origin of goods or services (the trade mark’s ‘function of indicating origin’), is thus adversely affected.”

The court added that Google could be liable only if it knew of any unlawful activity and failed to act on such knowledge to remove or disable access to the infringing material. As a consequence of this part of the court’s ruling, Google can expect a torrent of take-down requests from trademark owners who believe keyword advertising is infringing their marks in Europe.

More emphatically, a judge in the Eastern District of Virginia threw out last month a case against Google brought by trademark owner Rosetta Stone Ltd. Like many of the cases previously brought by trademark owners against Google in the U.S., Rosetta Stone alleged that Google infringed its mark by allowing third party advertisers to purchase the ROSETTA STONE® mark as a keyword, causing consumers searching for the term to be directed not only to the Rosetta Stone web site, but to competitors’ web sites as well. See our earlier article on the uphill battle that U.S. trademark owners face in challenging keyword advertising.

Google also scored a recent win in the copyright sphere, to add to its trademark victories. Germany’s highest court last month upheld a lower court ruling that Google did not violate an artist’s copyrights by posting thumbnail previews of the artist’s paintings in its Image Search results. Significantly, the artist had placed her work on a publicly available website, thereby making it accessible to search engines.

Adopting the reasoning from the ECJ’s Louis Vuitton decision, the German court said that, while no copyright liability could arise from Google’s posting the artist’s copyrighted material in these circumstances, there could be liability if Google knew it was storing the images illegally.

These recent decisions strengthen Google’s assertion that use of trademarks as search terms by Internet search providers offers a public good by allowing consumers access to information. The decisions also warn Google that it may be tagged with liability if it has knowledge of inappropriate activity by third party advertisers and fails to take corrective action.

At least in Europe, Google may be left with the headache of dealing with demands to remove certain ads because consumers supposedly cannot tell if the ads originate from the trademark owner or not. The path of least resistance may be to block the offending ads, and thereby avoid liability lawsuits, but this does not seem to be Google’s way. Google’s advertising revenue may depend on its willingness to defend certain ads from reflexive challenges from trademark holders.

 

 

 

 

 

 

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