Talking sense into Google AdSense: ECJ to consider competitor keyword advertising

The European Court of Justice (ECJ) has been invited to consider the use of competitors’ trade marks in search engine keyword advertising.  The case raises a number of issues in trade mark and community law, and could have significant implications for Google’s AdWord policy and future search engine trade mark disputes in Australia.

Background

Google’s AdWords keyword advertising programme has quickly become the de facto standard of internet advertising.  (For the uninitiated, here’s how it works: Google receives bids for placement of advertisements next to search results for specified search keywords on the Google search engine. Successful bidders have their website details appear in sponsored search results.  If a Google user clicks through to the bidder’s website, the bidder’s AdWords account is debited a fee based on how competitive that keyword is.)

One problem with AdWords is that it allows advertisers to bid on search keywords that are trade marks which they do not own.  In some cases, this leads advertisers to use their competitor’s trade mark in order to display their advertisements in response to users’ search queries for the competitor.

Google’s trade mark policy

Until May 2008, to prevent misuse of registered trade marks, Google’s European AdWords policy allowed trade mark owners to notify Google of their rights in particular marks.  Once notified, Google would not allow the purchase of those marks as keywords.  This is still Google’s policy in Australia.

In May 2008 Google amended its policy in the UK and Ireland to remove the restriction, allowing third parties to bid for another person’s trade marks as keywords. The competition for certain keywords has since skyrocketed, with the cost per click increasing from 2p to 23p in some instances.

The Interflora case

The policy change and increased cost has lead to legal disputes between keyword users and trade mark owners.  In this case, Interflora Inc, a US global flower delivery service, launched a trade mark infringement action in the UK against Marks & Spencer plc for the use of its trade marks in a Google AdWords campaign. Marks & Spencer was using INTERFLORA, INTAFLORA, INTEFLORA and a collection of other misspellings of ‘Interflora’ as Google Adwords. When users typed any of those keywords into a Google search engine, a sponsored link would appear for “M&S Flowers Online”.

Interflora claimed that this amounted to use in the course of trade of signs which were identical or similar to its registered trade marks.  It also argued that the use was likely to cause confusion to the public and dilution of its brand.  Interestingly, Google was not a party to the proceedings: Interflora proceeded directly against the competitor-advertiser.

Future directions

The Interflora case has been referred to the European Court of Justice by Justice Arnold of the UK High Court.  It’s currently unclear whether the ECJ will hear the matter, but if it does, this could occur later this year. Trade mark owners should keep an eye on this decision as it will undoubtedly affect:

  • Google’s Europe wide AdWord trade mark policy;
  • other judicial considerations (including Australia’s) of the use of others’ trade marks as Google AdWords; and
  • the cost of using AdWords for your own trade marks in certain regions.

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