ECJ upholds Google AdWords - but leaves door open for brand owner challenges

In a hotly anticipated judgment, the European Court of Justice ("ECJ") yesterday broadly upheld the Google AdWords business model. This model allows unauthorised advertisers to purchase other businesses' brand names as Internet search engine terms ("keywords") and so appear in the top-ranked "sponsored links" in search engine results, linking Internet users to competing or even counterfeit product websites.

The ECJ held that Google does not infringe the trade marks in question by selling the keywords to unauthorised advertisers or arranging their display as sponsored links, on the basis that Google itself is not making relevant use of those marks.

Lawyers Tom Carl, Jason Rawkins

However, the ECJ has not closed the door on brand owners challenging Google AdWords (or other search engines), in two main respects:

Challenges against unauthorised advertisers

Brand owners will be entitled to challenge unauthorised advertisers, on a case-by-case basis, where the advertisement displayed with the sponsored link (the "ad text") suggests that the advertiser is authorised by or otherwise connected with the brand owner, or is too vague for reasonably informed and attentive Internet users to determine whether there is such a connection.

This is likely to be the main battlefield for challenges. Brand owners will need to monitor the ad text of sponsored links and consider taking action against unauthorised advertisers where the ad text does not make it sufficiently clear that the advertiser is not connected with the brand owner.

Complaints to Google

Google (and other search engines) may potentially also be liable (in addition to the unauthorised advertisers), in two main situations:

• If Google plays a neutral (i.e. merely technical, automatic and passive) role in the keyword selection and display process, it may nevertheless be held liable once the brand owner has put it on notice of an unauthorised advertiser's infringement and it does not expeditiously remove or disable the infringing data. In principle, brand owners will therefore be able to make two-pronged challenges where paragraph 1 above applies, against both the unauthorised advertiser and Google, or possibly simply by complaining to Google.
• If Google does not play a neutral role in the keyword selection and display process (e.g. potentially, where Google is involved in the selection of infringing keywords or the drafting of ad text), the ECJ appears to suggest that it could potentially be liable for contributory infringement, subject to the relevant national law. The nature and extent of Google's role in the keyword selection and display process may therefore be another battlefield for brand owner challenges.

It will also be interesting to see what, if any, changes Google makes to its own AdWords policy as a result of the ECJ judgment. Google's UK and Irish policy currently allows unauthorised keywords but entitles brand owners to challenge any use of their brand in unauthorised ad text, which is a stricter position than that adopted by the ECJ (the ECJ's position being more in line with Google's current US policy). Google's current policy for the rest of the EU is even stricter - it entitles brand owners to challenge unauthorised brand use in both keywords and ad text - but will doubtless quickly change in light of the ECJ judgment.

Jason Rawkins and Tom Carl have been quoted commenting on the implications of this judgment in The New York Times, Bloomberg News, Bloomberg BusinessWeek, European Voice (all 23 March) and International Herald Tribune (24 March).