European Union Court Issues Ruling in Trademark Dispute between Google and Louis Vuitton

The Court of Justice of the European Union (“Court”) has issued a decision in the trademark dispute between Google and leather-goods maker Louis Vuitton Malletier .  In its decision, the Court held that Google did not infringe trade mark law by allowing advertisers to purchase keywords corresponding to their competitors’ trade marks.

The Court also ruled that advertisers themselves cannot, by using such keywords, arrange for Google to display ads which do not allow internet users easily to establish from which undertaking the goods or services covered by the ad in question originate.

By way of background, Google operates an internet search engine. When an internet user performs a search on the basis of one or more key words, the search engine will display the sites which appear best to correspond to those key words, in decreasing order of relevance. These are referred to as the ‘natural’ results of the search.

In addition, Google offers a paid referencing service called ‘AdWords’. That service enables any economic operator, by means of the reservation of one or more keywords, to obtain the placing – in the event of a correspondence between one or more of those words and that/those entered as a request in the search engine by an internet user – of an advertising link to its site, accompanied by a commercial message. That advertising link appears under the heading ‘sponsored links’, which is displayed either on the right-hand side of the screen, to the right of the natural results, or on the upper part of the screen, above those results.

Vuitton, which is the proprietor of the trade mark ‘Vuitton’ and of the French national trade marks ‘Louis Vuitton’ and ‘LV’, Viaticum, which is the proprietor of the French trade marks ‘Bourse des Vols’, ‘Bourse des Voyages’ and ‘BDV’, and Mr Thonet, the proprietor of the French trade mark ‘Eurochallenges’, became aware that the entry, by internet users, of terms constituting those trade marks into Google’s search engine triggered the display, under the heading ‘sponsored links’, of links to sites offering imitation versions of Vuitton’s products and to sites of competitors of Viaticum and of the Centre national de recherche en relations humaines respectively. They therefore brought separate sets of proceedings against Google for declarations that it had infringed their trade marks.

The Court found that, by purchasing the referencing service and selecting, as a keyword, a sign corresponding to another person’s trade mark, with the purpose of offering internet users an alternative to the goods or services of that proprietor, an advertiser uses that sign in relation to its goods or services. That is not the case, however, where a referencing service provider permits advertisers to select, as keywords, signs identical with trade marks, stores those signs and displays its clients’ ads on the basis of those keywords, the Court wrote.

The Court stated that the use, by a third party, of a sign which is identical with, or similar to, the proprietor’s trade mark implies, at the very least, that that third party uses the sign in its own commercial communication. A referencing service provider, however, allows its clients, namely the advertisers, to use signs which are identical with, or similar to, trade marks, but does not itself use those signs, the Court explained.

In this regard, if a trade mark has been used as a keyword, the proprietor of that trade mark cannot, therefore, rely, as against Google, on the exclusive right which it derives from its mark. By contrast, it can invoke that right against those advertisers which, by means of a keyword corresponding to its mark, arrange for Google to display ads which make it impossible, or possible only with difficulty, for average internet users to establish from what undertaking the goods or services covered by the ad originate.

“In such a situation – which is characterized by the fact that the ad in question appears immediately after the trade mark has been entered as a search term by the internet user concerned and is displayed at a point when the trade mark, in its capacity as a search term, is also displayed on the screen – 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 wrote.

The Court concluded that it “is for the national court to assess, on a case-by-case basis, whether the facts of the dispute before it point to an adverse effect, or a risk thereof, on the function of indicating origin.”

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