OPINION OF ADVOCATE GENERAL POIARES MADURO delivered on 22 September 2009 (1)
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I have put this very important ruling abut Google Adwords and bidding on trademarks up in full, since the commentary that I have seen does not link to it.
(References for a preliminary ruling from the Cour de cassation (France))
The act of typing a keyword into an internet search engine has become part of our culture, its results immediately familiar. The actual inner workings of how those results are provided are, it is fair to say, mostly unknown to the general public. It is simply assumed that if you ask, it shall be given to you; seek, and you shall find. ()
In reality, for any given keyword typed into a search engine, that is to say, for any set of words entered, two types of results are usually provided: a range of sites relevant to the keyword ('natural results') and, alongside, advertisements for certain sites ('ads'). ()
While natural results are provided on the basis of objective criteria, determined by the search engine, that is not the case with ads. Ads are provided because advertisers pay for their sites to feature in response to certain keywords; this is possible because the search engine provider makes those keywords available for selection by advertisers.
The present cases concern keywords which correspond to registered trade marks. More specifically, the proprietors of the trade marks () are trying to prevent the selection of such keywords by advertisers. They are also trying to prevent the display by search engine providers of ads in response to those keywords, as this may result in sites for rival or even counterfeit products being displayed alongside natural results for their own sites. The question, as put to the Court, is whether the use of a keyword which corresponds to a trade mark can, in itself, be regarded as a use of that trade mark which is subject to the consent of its proprietor.
The answer will determine the extent to which keywords corresponding to trade marks can be used outside the control of the proprietors of the trade marks. To put it differently: when you enter a keyword which corresponds to a trade mark, what can be given and what can you find in cyberspace?
I - Factual and legal background
The present cases group together three references from the French Cour de cassation (Court of Cassation), all dealing with Google's advertisement system, 'AdWords'.
Both Community and French trade marks are involved, and so the references call for the interpretation of Directive 89/104, approximating the laws of the Member States relating to trade marks, () and Regulation No 40/94, on the Community trade mark. () An interpretation of Directive 2000/31, on information society services, () is also requested.
I shall start by describing how AdWords operates, in particular its interaction with Google's search engine, and the litigation that such advertising systems have generated in a number of Member States. I shall then sketch the background to each of the references and set out the questions referred. Finally, I shall mention the legal provisions at issue in the present cases.
A -Google's search engine, its advertising system 'AdWords', and related litigation in Member States
Google Inc. and Google France SARL (either collectively or individually, as 'Google') allow internet users free access to the Google search engine. On entering keywords into that search engine, internet users are presented with a list of natural results. These natural results are selected and ranked according to their relevance to the keywords. This is done through the automatic algorithms underlying the search engine program, which apply purely objective criteria.
Google also operates an advertisement system called 'AdWords', which enables ads to be displayed, alongside natural results, in response to keywords. Ads typically consist of a short commercial message and a link to the advertiser's site; they are differentiated from natural results by being presented, under the heading 'lien(s) commercial(aux)', either at the top of the page, against a yellow background, or on the right?hand side. () Google's main competitors (Microsoft and Yahoo!) operate similar advertising systems. ()
Through AdWords, Google allows advertisers to select keywords so that their ads are displayed to internet users in response to the entry of those keywords in Google's search engine. () Every time an internet user subsequently clicks on the ad's link, Google is remunerated in accordance with a price agreed beforehand ('price per click'). There is no limit to the number of advertisers that can select a keyword, and if all the ads relating to that keyword cannot be displayed at the same time they will be ranked according to the price per click and by the number of times that internet users have previously clicked on the ad's link.
Google has set up an automated process for the selection of keywords and the creation of ads: advertisers type in the keywords, draft the commercial message, and input the link to their site. As part of this automated process, Google provides optional information on the number of searches on its search engine featuring the selected keywords, as well as related keywords, and the corresponding number of advertisers. Advertisers can then narrow down their selection of keywords in order to maximise the exposure of their ads.
Google supports its search engine, as well as a range of free applications, with its income from AdWords.
Advertising systems such as AdWords have been the subject of trade-mark-related litigation in several Member States. At issue has been the legality of the use of keywords which correspond to trade marks. Google has drawn attention to a number of rulings to the effect that this is legal (albeit on different grounds) in Austria, Belgium, Germany, Italy, the Netherlands and the United Kingdom.
In their observations, the parties mention only one Member State - France - where the legality of such advertisement systems is disputed, with the lower courts divided on the issue. It is from the French Cour de cassation, called upon to settle the issue, that the three references in the present cases originate.
B -The background to the references and the questions referred
Google has stated that, as a result of the uncertainty that the proceedings in the three references cases have cast over the legality of its actions in France, it has blocked the possibility of advertisers selecting keywords which correspond to some of the trade marks involved until the Court gives its answer to the questions referred.
i) Case C?236/08 ('the first reference')
The first reference arose in proceedings between Google and Louis Vuitton Malletier SA ('LV'). LV is the proprietor of the Community trade mark 'Vuitton' and the French national trade marks 'Louis Vuitton' and 'LV'; all those marks are considered to enjoy a certain reputation.
It has been established in those proceedings that entering LV's trade marks into Google's search engine triggered the display of ads for sites offering counterfeit versions of LV's products. It has also been established that Google offered advertisers the possibility of selecting, to that end, not only keywords which correspond to LV's trade marks, but also those keywords in combination with expressions denoting counterfeit such as 'imitation', 'replica' and 'copy'. ()
Those facts led to Google being found guilty of trade mark infringement, a decision which was upheld on appeal. Google thereupon appealed on points of law to the Cour de cassation, which has referred three questions to the Court for a preliminary ruling.
The first question from the Cour de cassation concerns the possibility of an infringement of both Community and national trade marks consisting in allowing the selection of keywords corresponding to those trade marks, and in advertising sites offering counterfeit products; the second question approaches that issue in the light of the special protection granted to trade marks which have a reputation; and the third question is concerned with the possible application of the liability exemption for hosting:
'(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 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 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?'
ii) Case C?237/08 ('the second reference')
The second reference arose in the context of proceedings between Google, on the one hand, and Viaticum SA ('Viaticum') and Luteciel SARL ('Luteciel'), on the other. Viaticum and Luteciel are proprietors of the French trade marks 'bourse des vols', 'bourse des voyages' and 'BDV'.
It has been established in those proceedings that entering Viaticum and Luteciel's trade marks into Google's search engine triggered the display of ads for sites offering identical or similar products. It has also been established that Google offered advertisers the possibility of selecting for that purpose keywords which corresponded to those trade marks. However - and the facts differ on this point from those of the first reference - the products sold on the advertised sites did not infringe the trade marks in question: throughout the proceedings, they have been attributed to competitors of Viaticum and Luteciel.
Nevertheless, this factual difference did not prevent Google also being found guilty of trade mark infringement and, on appeal, of being an accessory to trade mark infringement. Google thereupon appealed on points of law to the Cour de cassation, which has referred two questions to the Court for a preliminary ruling.
The first question from the Cour de cassation concerns the possibility of a trade mark infringement consisting in allowing the selection of keywords which corresponded to those trade marks, and in advertising sites offering identical or similar products; the second question concerns the possible application of the liability exemption for hosting (as did the third question in the first reference):
'(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?'
iii) Case C?238/08 ('the third reference')
The third reference arose in the context of proceedings between, on the one hand, Google, Mr Raboin and Tiger SARL ('Tiger'), and, on the other, Mr Thonet and Centre national de recherche en relations humaines SARL ('CNRRH'). CNRRH is the holder of a licence for the French trade mark 'Eurochallenges', granted by Mr Thonet, the proprietor of that trade mark.
It has been established in those proceedings that entering 'Eurochallenges' into Google's search engine triggered the display of ads for sites offering identical or similar products. It has also been established 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.
Google, Mr Raboin and Tiger were found guilty of trade mark infringement, a decision which was upheld on appeal. Google and Tiger thereupon filed separate appeals before the Cour de cassation, which has referred three questions to the Court for a preliminary ruling.
The first question from the Cour de cassation concerns the possibility of a trade mark infringement consisting in the act of selecting for advertising purposes a keyword which corresponds to the trade mark; the second question also concerns a possible trade mark infringement, but this time consisting in allowing that selection and in advertising sites offering identical or similar products (like the first question in the second reference); the third question concerns the possible application of the liability exemption for hosting (as did the last question in both the first and second references):
'(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?'
C -Legal provisions at issue
The sixth recital in the preamble to Directive 89/104 states that:
'... this Directive does not exclude the application to trade marks of provisions of law of the Member States other than trade mark law, such as the provisions relating to unfair competition, civil liability or consumer protection'.
Article 5(1) of Directive 89/104 is mentioned in all the references, and it defines what constitutes a trade mark infringement:
'The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered;
(b) any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark.'
Article 5(2) of Directive 89/104 deals with the special protection that may be granted to trade marks which have a reputation:
'Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.'
Article 5(3) of Directive 89/104 specifies, by way of example, some of the uses which can constitute a trade mark infringement:
'The following, inter alia, may be prohibited under paragraphs l and 2:
...
(d) using the sign on business papers and in advertising.'
Paragraphs 1 and 2 of Article 9 of Regulation No 40/94 are the equivalent, as regards Community trade marks, of Article 5 of Directive 89/104:
'1. A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(a) any sign which is identical with the Community trade mark in relation to goods or services which are identical with those for which the Community trade mark is registered;
(b) any sign where, because of its identity with or similarity to the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark;
(c) any sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.
2. The following, inter alia, may be prohibited under paragraph 1:
...
(d) using the sign on business papers and in advertising.'
Article 14 of Directive 2000/31, another provision which is mentioned in all the references, establishes a liability exemption for hosting activities:
'1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:
(a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or
(b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.
...
3. This Article shall not affect the possibility for a court or administrative authority, in accordance with Member States' legal systems, of requiring the service provider to terminate or prevent an infringement, nor does it affect the possibility for Member States of establishing procedures governing the removal or disabling of access to information.'
Point (a) of Article 2 of Directive 2000/31 defines 'information society services' by reference to Article 1(2) of Directive 98/34, () as amended by Directive 98/48, () and accordingly as:
'any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services'.
Article 1(2) of Directive 98/34 (as amended by Directive 98/48) goes on to state:
'For the purposes of this definition:
- "at a distance" means that the service is provided without the parties being simultaneously present,
- "by electronic means" means that the service is sent initially and received at its destination by means of electronic equipment for the processing (including digital compression) and storage of data, and entirely transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means,
- "at the individual request of a recipient of services" means that the service is provided through the transmission of data on individual request.'
Article 15 of Directive 2000/31 establishes that information society service providers need not monitor the information that they transmit or store:
'1. Member States shall not impose a general obligation on providers, when providing the services covered by Articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.
2. Member States may establish obligations for information society service providers promptly to inform the competent public authorities of alleged illegal activities undertaken or information provided by recipients of their service or obligations to communicate to the competent authorities, at their request, information enabling the identification of recipients of their service with whom they have storage agreements.'
Article 21 of Directive 2000/31 makes provision regarding the reports to be submitted by the Commission on the application of the directive:
'1. Before 17 July 2003, and thereafter every two years, the Commission shall submit to the European Parliament, the Council and the Economic and Social Committee a report on the application of this Directive, accompanied, where necessary, by proposals for adapting it to legal, technical and economic developments in the field of information society services, in particular with respect to crime prevention, the protection of minors, consumer protection and to the proper functioning of the internal market.
2. In examining the need for an adaptation of this Directive, the report shall in particular analyse the need for proposals concerning the liability of providers of hyperlinks and location tool services, "notice and take-down" procedures and the attribution of liability following the taking-down of content. The report shall also analyse the need for additional conditions for the exemption from liability, provided for in Articles 12 and 13, in the light of technical developments, and the possibility of applying the internal market principles to unsolicited commercial communications by electronic mail.'
II - Assessment
The three references from the Cour de cassation all pose the same basic question: does the use by Google, in its AdWords advertising system, of keywords corresponding to trade marks constitute an infringement of those trade marks? Although the references are formulated somewhat differently, they all ask for an interpretation of Article 5(1) of Directive 89/104 and therefore concern that basic question of whether Google has committed a trade mark infringement.
Google has argued that there is no use of the trade marks involved, since keywords do not constitute a sign representing them. If that argument were to be accepted, the question of an infringement would not even arise. However, the present cases are far from being that simple. It is true that keywords do not correspond to the classic notion of signs: they are not affixed to goods, nor do undertakings conduct their business activity under them. However, none of those factors is decisive for the purposes of determining whether certain activities are to be construed as use of a trade mark.
There is use of a trade mark where the trade mark is represented, most notably where a sign is used which is identical or similar to that trade mark. () Keywords which correspond to trade marks can also be said to represent those marks. In the present cases, therefore, and contrary to Google's assertion, there is a use of the trade marks concerned. The question whether that use relates to goods or services - another point which Google disputes - further involves assessing one of the conditions for finding that this use constitutes a trade mark infringement. ()
Before those conditions are examined, the differences between the three references from the Cour de cassation must be dealt with in order to understand the scope of the possible infringements at issue.
All three references concern the use by Google of keywords corresponding to trade marks; however, the third reference extends the question of a trade mark infringement to the use by advertisers, questioning whether their selection of those keywords constitutes in itself such an infringement (the first question). I shall leave that question until last, when the answer regarding the use by Google will already be clear.
The first reference has a number of special features. First, it involves both national trade marks and Community trade marks; accordingly, an interpretation is sought, not only of Directive 89/104, but also of Regulation No 40/94 (the first question). However, the conditions for a trade mark infringement are the same under both Directive 89/104 and Regulation No 40/94, and so my answer to the question whether there is such an infringement will be the same in both cases. ()
The first reference also asks for an interpretation of the provisions in both those legislative acts concerning trade marks which have a reputation (the second question). In my treatment of the question whether there is an infringement, I shall therefore also consider the special protection granted to those trade marks.
Finally, the first reference has attracted particular attention, since its facts involve 'counterfeit sites', that is to say, sites offering counterfeit products (the first question). The other references, by contrast, concern 'competitor sites', which offer products that do not infringe any trade marks. The trade mark proprietors, supported by France, have singled out the possibility of counterfeit sites making use of AdWords - as happened according to the facts of the first reference - as a telling example of why keywords should be subject to their control. This leads me to make some important distinctions.
All the references concern the use in AdWords of keywords which correspond to trade marks; this use, as described, consists in the selection of those words so that ads are presented as results and in the display of ads alongside the natural results provided for those words. The references do not concern the use of trade marks on the advertisers' sites, or the products sold on those sites; nor do they concern the use of trade marks in the text of the ads displayed. () Those are all independent uses, and the legality of each must be assessed on its own terms. () In the present cases, the Court is called upon only to assess the legality of the use of keywords.
The trade mark proprietors claim that, although distinct, all those uses are somehow connected: if, for example, there is an infringing use on a site selling counterfeit goods, any use in AdWords relating to that site would be affected and could be prevented by the trade mark proprietor. Otherwise AdWords would, in fact, be facilitating the infringement committed on that site. Although, as will be seen, the trade mark proprietors' claim is not limited to that example, it figures prominently in their line of reasoning because of its suggestive power.
The goal of trade mark proprietors is to extend the scope of trade mark protection to cover actions by a party that may contribute to a trade mark infringement by a third party. This is usually known in the United States as 'contributory infringement', () but to my knowledge such an approach is foreign to trade mark protection in Europe, where the matter is normally addressed through the laws on liability. ()
The trade mark proprietors are urging the Court to go even further: to rule, in effect, that the mere possibility that a system - in the present cases, AdWords - may be used by a third party to infringe a trade mark means that such a system is, itself, in infringement. Indeed, the trade mark proprietors do not wish to limit their claims to cases where AdWords is actually used by sites offering counterfeit goods; they want to nip that possibility in the bud by preventing Google from being able to make keywords corresponding to their trade marks available for selection. From the existence of a risk that AdWords may be used to promote those counterfeit sites, they deduce a general right to prevent the use of their trade marks as keywords. If the infringement lies in the use of those keywords in AdWords, as the trade mark proprietors claim, that is so whether or not the sites displayed in response actually infringe the trade mark.
The Court is thus being asked to expand significantly the scope of trade mark protection. I shall make clear why I believe that it ought not to do so. My examination of the question whether there is trade mark infringement will reveal, first, that the use in AdWords of keywords which correspond to trade marks does not, in itself, constitute a trade mark infringement, and, secondly, that the connection with other (potentially infringing) uses is better addressed, as it has been hitherto, through the rules on liability.
I shall therefore have to address the subsidiary question posed by all the references in the event that no trade mark infringement be found: is Google's activity, in AdWords, covered by the liability exemption for hosting provided for in Directive 2000/31?
The parties are divided as to the meaning of that subsidiary question, some understanding it as concerning a possible exemption for Google from trade mark infringements. The Cour de cassation, however, has expressly formulated that question in such a way that it applies only if such infringement is not found. In my view, the Cour de cassation has done so because, if it is possible for trade mark proprietors to prevent AdWords from using keywords which correspond to their trade marks, the case before it will effectively be resolved. If, however, the Court rules that there is no infringement and AdWords is allowed to continue with its current modus operandi, it will still be necessary to address the question of Google's possible liability for the content featured in AdWords. That is why the liability exemption for hosting may be relevant to the present cases.
Accordingly, I shall proceed in the present cases by dealing first with (A) the basic question of whether the use by Google, in AdWords, of keywords which correspond to trade marks constitutes a trade mark infringement; then with (B) the subsidiary question of whether the liability exemption for hosting applies to the content featured by Google in AdWords; and, lastly, with (C) the remaining question of whether the use by advertisers, in AdWords, of keywords which correspond to trade marks constitutes a trade mark infringement.
A -The first question in the first and second references, and the second question in the first and third references: whether trade mark proprietors can prevent the use by Google, in AdWords, of keywords which correspond to their trade marks
According to established case?law, there are four cumulative conditions which must be satisfied if trade mark proprietors are to be able to prevent the use of their trade marks under Article 5(1) of Directive 89/104 (or, in other words, for there to be a trade mark infringement). One of those conditions is clearly satisfied: the use by Google, in AdWords, of keywords which correspond to trade marks is manifestly not consented to by the trade mark proprietors. It therefore remains to be ascertained whether the remaining three conditions are satisfied, that is to say, whether: (i) that use takes place in the course of trade; (ii) it relates to goods or services which are identical or similar to those covered by the trade marks; and (iii) it affects or is liable to affect the essential function of the trade mark - which is to guarantee to consumers the origin of the goods or services - by reason of a likelihood of confusion on the part of the public. ()
Before going on to examine these conditions, I must be more precise as to the number of uses by Google. I have so far been referring to 'the use', in AdWords, of keywords which correspond to trade marks. In reality, not one but two uses are involved: (a) when Google allows advertisers to select the keywords (this use being somewhat internal to the operation of AdWords), () so that ads for their sites are presented as results for searches involving those keywords; and (b) when Google displays such ads, alongside the natural results displayed in response to those keywords. I shall therefore examine in separate sections whether each use fulfils the above conditions.
Those two uses are closely, if not inextricably, linked: it is the fact that the selection of certain keywords is allowed which makes it possible for the ads to be displayed in immediate response to those keywords. Despite this connection, they constitute different uses. They happen at different times: use (a) when advertisers engage in the procedure of selecting keywords and use (b) when internet users are presented with a display of the results of their searches. They have different targets: in the case of use (a), the targets are advertisers that wish to make use of AdWords; in the case of use (b), they are internet users who use Google's search engine. And, lastly, they concern different goods or services: use (a) concerns Google's own service, AdWords, and use (b) concerns the goods and services offered on the advertised sites.
The existence of two different uses, even if not clearly distinguished, is apparent from the questions referred. The questions from the Cour de cassation directed at Google mention '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' (emphasis added).
If those two uses appear to be collapsed into a single use, it is, in my view, because the real intention of the trade mark proprietors is to establish some form of 'contributory infringement'. As stated above, the present cases will require the Court to decide whether trade mark protection should be so extended. This aspect will be addressed in greater detail below in Section (d), in which I shall analyse whether Google's possible contribution, through AdWords, to trade mark infringements by third parties constitutes in itself a trade mark infringement. For the time being, however, I shall not depart from the well?established case-law of the Court and shall analyse each of those two uses separately.
I shall also address below in Section (c) whether Google's use of keywords which correspond to trade marks affects other functions of the trade mark besides its essential function of guaranteeing the origin of the goods and services. As has been mentioned, the affecting of that essential function is one of the conditions for a trade mark infringement. However, the Court has added to that established case?law by stating that, even if that condition is not satisfied, there may be an infringement under Article 5(1)(a) of Directive 89/104 if other functions of the trade mark are affected. () As I shall explain, those other functions play a role in the protection afforded both under Article 5(1) and under Article 5(2) of that directive. Accordingly, the second question in the first reference, which concerns the special protection granted to trade marks which have a reputation, will also be addressed in this section.
a) The use by Google consisting in allowing advertisers to select in AdWords keywords which correspond to trade marks, so that ads for their sites are presented as results for searches involving those keywords
i) Whether the use takes place within the course of trade
The aim underlying this condition for a trade mark infringement is to distinguish between a private use and a 'commercial activity with a view to a gain'; () the trade mark proprietor is only entitled to prevent the latter.
When Google offers advertisers, through AdWords, the possibility of selecting keywords which correspond to trade marks, it does so as a commercial activity: even though its remuneration does not come about until later (when internet users click on the ad's link), Google's service is provided 'with a view to a gain'. This condition should therefore be regarded as satisfied.
ii) Whether the use is made in relation to goods or services which are identical or similar to those covered by the trade marks
This condition for a trade mark infringement, by employing the broad formulation of 'use made in relation to goods or services', means that the trade mark proprietor is entitled to prevent many uses beyond the simple affixing of the trade mark to the good. Nevertheless, in order to satisfy this condition, the use must entail a link to goods or services which are identical or similar to those covered by the trade mark.
Article 5(3) of Directive 89/104 provides a non?exhaustive list of the types of use which may be prevented. The trade mark proprietors have construed the inclusion in Article 5(3) of the use 'in advertising' as confirmation that they are entitled to prevent all the activities carried out by Google through AdWords. Google argues that its activities do not correspond to a use 'in advertising', as the keywords form no part of the ads themselves.
To my mind, the reference in Article 5(3) of Directive 89/104 to a use 'in advertising' is intended to cover the more traditional occurrence of the trade mark being used in the ad itself. Such a use may indeed occur in the ads displayed through AdWords, but, as was mentioned above, the Court is not being asked about the text of such ads; it is being asked only about the keywords. The artificial categorisation of all Google's activities in AdWords as uses 'in advertising' would obscure what this condition seeks to determine: to which goods or services each use relates. This, of course, may vary according to the use.
What is relevant, therefore, is the concept of 'use made in relation to goods or services' - it should be remembered that use 'in advertising' is only an illustration of this. The Court has rightly focused on this concept, by clarifying that the present condition is satisfied when a sign corresponding to a trade mark is used 'in such a way that a link is established between the sign ... and the goods marketed or the services provided'. ()
The essential factor is therefore the link that is established between the trade mark and the good or service being sold. In the traditional example of a use in advertising, the link is established between the trade mark and the good or service sold to the general public. This happens, for example, when the advertiser sells a good under the trade mark. That is not the case with the use by Google consisting in allowing advertisers to select keywords so that their ads are presented as results. There is no good or service sold to the general public. The use is limited to a selection procedure which is internal to AdWords and concerns only Google and the advertisers. () The service being sold, and to which the use of the keywords corresponding to the trade marks is linked, is therefore Google's own service, AdWords.
It seems evident that AdWords is not identical or similar to any of the goods or services covered by the trade marks. Accordingly, this condition is not satisfied and, in consequence, the use consisting in allowing advertisers to select in AdWords keywords which correspond to trade marks, so that ads for their sites are presented as results for searches involving those keywords, does not constitute a trade mark infringement.
iii) Whether the use affects or is liable to affect the essential function of the trade mark, by reason of a likelihood of confusion on the part of the public
The fact that Google's use of the trade marks for the purposes necessary to the functioning of AdWords is not made in relation to goods or services identical or similar to those covered by those trade marks, and therefore does not satisfy the preceding condition, makes it unnecessary to analyse in detail this condition. First and foremost, it should be borne in mind that the four conditions for finding a trade mark infringement are cumulative. ()
Moreover, in cases where the preceding condition is not met, it is unlikely that the essential function of the trade mark - to guarantee to consumers the origin of the goods or services - will have been affected or will stand in danger of being affected. () Since the use by Google does not involve identical or similar goods or services, in principle there can be no risk of confusion on the part of consumers. Thus, in any event, this condition is not satisfied either.
b) The use consisting in Google displaying ads, through AdWords, alongside the natural results displayed in response to the keywords which correspond to trade marks
Before analysing whether this use constitutes a trade mark infringement, it is important to address the possible implications of the present cases for Google's search engine.
At issue is the display of ads triggered by the use of keywords corresponding to trade marks. However, in the event that such use is held to constitute a trade mark infringement, it may be difficult to prevent that ruling from also applying to the use of keywords in Google's search engine. Despite the fact that the questions referred are confined to AdWords, the parties' pleadings show that they are aware of this risk. They are right that Google's current activity through AdWords is distinguishable from its activity as a provider of a search engine. That said, there is no substantial difference between the use that Google, itself, makes of the keywords in its search engine and the use that it makes of them in AdWords: it displays certain content in response to those keywords.
It is true that, by associating ads with certain keywords through AdWords, Google provides the advertisers' sites with added exposure. However, it should be remembered that such sites, even the counterfeit ones, could feature among the natural results of the same keywords (depending on their relevance as detected by the search engine's automatic algorithms). It should also be remembered that ads and natural results have very similar characteristics: a short message and a link. Accordingly, the difference between ads and natural results lies not so much in whether or not ads provide exposure, but more in the degree of such exposure. I have doubts as to whether, for the purposes of trade mark protection, that difference in degree will be sufficient to distinguish between the display of ads, on the one hand, and of natural results, on the other, both being provided in response to the same keywords.
In particular, I find it difficult to argue for such a distinction on the basis of the Court's conditions for finding a trade mark infringement, which do not depend on the type of activity so long as the use takes place in the course of trade. Nevertheless, I would like to make clear that this difficulty is not enough, per se, to exclude the possibility of a trade mark infringement in the present cases. My reason for calling the attention of the Court to this issue is to highlight all the possible consequences of the present cases. If the Court holds that the display by Google of sites in response to certain keywords constitutes a trade mark infringement, it may be difficult to distinguish between the situation involving AdWords and the situation involving Google's search engine.
In order to demonstrate the risk of 'overlap' between the two, I shall compare the application of the conditions for a trade mark infringement to the display, in response to keywords corresponding to trade marks, of ads and natural results, respectively. This comparison, moreover, will prove useful in assessing the risk of confusion involved.
i) Whether the use takes place in the course of trade
As was mentioned above, this condition is satisfied whenever the use is made as a 'commercial activity with a view to a gain'. ()
That is the case with the display of ads by Google: when internet users click on those ads' links, it is paid by the advertisers. This condition should therefore be regarded as satisfied.
In comparison, the display of natural results in response to the same keywords is also made with 'a view to a gain'. Natural results are not provided out of charity: they are provided because, as was mentioned above, AdWords operates within the same context by offering some sites added exposure. The value of this exposure depends on the use of the search engine by internet users. Even though Google gets nothing directly from this use, it obviously lies at the root of the income that Google obtains from AdWords, which in turn allows it to support its search engine. As such, the display of natural results in Google's search engine also satisfies this condition.
ii) Whether the use is made in relation to goods or services which are identical or similar to those covered by the trade marks
As has been pointed out, this condition depends on establishing a link between the use of the trade mark and the goods marketed or services provided. ()
That is what Google does under AdWords: by displaying ads in response to the keywords which correspond to trade marks, it establishes a link between those keywords and the sites advertised, including the goods or services sold via those sites. Even though the keywords do not feature in the ads themselves, this use falls under the notion of use 'in advertising' as referred to in Article 5(3)(d) of Directive 89/104: the link established is between the trade mark and the goods or services advertised. The sites concerned sell goods which are identical or similar to those covered by the trade mark (including counterfeit products). This condition should therefore be regarded as satisfied.
The very same link is established between keywords which correspond to trade marks, and the sites displayed as natural results. It could be argued that the link is different because ads and natural results are presented differently. However, that is not the case: both are composed of a short message and a link to a site. AdWords purposely emulates Google's search engine, because the function of the search engine is precisely to establish a link between keywords and sites.
It could also be contended that, since Google gets nothing for displaying natural results, or since site owners do not influence the content of the accompanying short mess
