Google's Ad Words Lawsuits Worldwide
Keyword advertising is an essential revenue stream for search engines. Several lawsuits threaten this revenue model and could cut into the revenue streams of Google, Yahoo, and others. This page covers the development of lawsuits against Google in Germany, France and the USA.
What exactly are Google's adwords? They are a quick and simple way to purchase highly targeted cost-per-click (CPC) advertising, regardless of your budget. AdWords ads are displayed along with search results on Google, as well as on search and content sites in our growing ad network, including AOL, EarthLink, HowStuffWorks, & Blogger.... When you create a Google AdWords ad, you choose keywords for which your ad will appear and specify the maximum amount you're willing to pay for each click. You only pay when someone clicks on your ad"
And where is the legal problem? Google's AdWords service allows advertisers to sponsor particular search terms. Whenever that term is searched the advertiser’s link will appear next to the search results. A company can choose a trademark protected term as keyword. So if you enter "trademark protected term" in the Google search box and hit "Search", you would get listings from advertisers who paid for placement with this keyword. Google puts those listings off to the right side of the screen, clearly marked as ads. Trademark owners are concerned about their brand awareness and insist that this behaviour violates their trademarks.
What does Google think about it? Google's FAQ states: "As a provider of space for advertisements, we cannot arbitrate trademark disputes between advertisers and trademark owners. As stated in our Terms and Conditions, advertisers are responsible for the keywords and ad text that they choose to use. We encourage trademark owners to resolve their disputes directly with our advertisers, particularly because the advertisers may have similar advertisements on other sites. As a courtesy, we are willing to perform a limited investigation of reasonable complaints. When we receive a complaint from a trademark owner, our review is limited to ensuring that the advertisements at issue are not using the trademarked term as a keyword trigger. If they are, we disable those keywords from the ad campaign...."
In its SEC filings Google commented on the lawsuits:
"Companies have also filed trademark infringement and related claims against us over the display of ads in response to user queries that include trademark terms. The outcomes of these lawsuits have differed from jurisdiction to jurisdiction. A court in France has held us liable for allowing advertisers to select certain trademarked terms as keywords. We have appealed this decision. We were also sued in Germany on a similar matter where a court held that we are not liable for the actions of our advertisers prior to notification of trademark rights. We are litigating similar issues in other cases in the U.S., France and Germany.
In order to provide users with more useful ads, we have recently revised our trademark policy in the U.S. and Canada. Under our new policy, we no longer disable ads due to selection by our advertisers of trademarks as keyword triggers for the ads. As a result of this change in policy, we may be subject to more trademark infringement lawsuits. Defending these lawsuits could take time and resources. Adverse results in these lawsuits may result in, or even compel, a change in this practice which could result in a loss of revenue for us, which could harm our business."
I personally don't believe that Keyword advertising does confuse consumers because consumers don't expect that the ads are connected to the trademark. But we will have to wait and see what the courts say.
AdWords Lawsuits in Europe - Where do we stand at the beginning of 2008
Germany
Despite several lower and
Click here for a list of AdWords related lawsuits in Germany!
My German Links & Law Blog features the latest developments in this area! For more information in German also see this article!
Austria
In 2007 the Supreme Court of Austria held that the use of a trademark as a keyword infringes the rights of its owner, if the ad appears above the search results (advertisers can't choose between above and on the right side of the search results...) using the trademark as header (it is unclear if this citation of the trademark had an impact on the decision...). The decision has also been criticised for confounding arguments from trademark and unfair competition law. The court had reasoned that users could get the wrong impression that the advertiser is closely related to the owner of the trademark.
You can find the decision (in German) at http://www.linksandlaw.de/urteil175-haftung-adwords-oesterreich.htm.
United Kingdom
Following the reasoning in the Reed Executive plc v. Reed Business Information decision (for more informatio
France
1. Advertisers in France should not use trademark protected terms as keywords. The Court of Nanterre, the Court of Paris, the Court of Appeal of Versailles - all have found that advertisers committed a trademark infringement. Only the Court of Strasbourg (decision of July 20, 2007, Atrya vs. Google and K par K/Techni Feneres) has stressed the initial function of a trademark to distinguish a product or a service and to associate it to a specific origin and found no trademark infringement. Nethertheless the court deemed the use of the trademark to be unfair competition (parasitism based on the profiting of the well known brand of a competitor). So far no French court held the use of trademark protected keywords to be legal!
2. As for the liability of search engines, courts in France d
3. According to the Cour d'Appel de Paris, French courts have no jurisdiction if the incriminated ads lead only to websites owned by companies established outside France and appear only on google.co.uk, google.de and google.ca, but not on google.fr. (decision of June 6, 2007, Google Inc. and Google France v. Axa et al, CRI 2007, 155 ff.).
Netherlands
According to the Amsterdam Court of Appeal (Portakabin v. Primakabin, Decision of December 14, 2006) advertisers are allowed to use a trademark as keyword, at least when
- the use is in connection with the resale of the relevant branded product and
- the link in the ad leads directly to the subpage on which the branded products are offered for sale, and not to the homepage.
In all other cases... ???
In 2006 the Amsterdam District Court had held that Google's practice of broadmatching did not raise any trademark concerns.