Reading Google’s explanation of its policy change in more detail again I stumbled across following line:
“Google will no longer prevent advertisers from selecting a third party’s trademark as a keyword. [ok, we knew that] However, in response to a complaint made under our European policy, we will do a limited investigation as to whether a keyword in combination with particular ad text is confusing as to the origin of the advertised goods and services. [fine too] Under this policy, [the investigation of the text?] we will permit certain ads, provided that they are not confusing as described above. Some examples include, but are not limited to, the following:
- ads using a trademarked term in a descriptive or generic way, such as not in reference to the term as a trademark
- ads for competing products or services
- ads for informational sites about a product or service corresponding to the trademark
- ads for resale of the trademarked goods or services
- ads for the sale of components, replacement parts, or compatible products corresponding to a trademark”
So… does that mean that also the display of the TM in the text of the ad is permitted under the circumstances of Art 6 and ART 7 of the ECD?
So what would be the difference between the European and the U.S. Trademark Policy then?
So many interesting questions, so little time! I start getting tired of changing/updating my blog post about this policy change while I should be proofreading the chapter on law of unfair competition on my thesis… 😉
Answers highly appreciated!
UPDATE: Looks like the answer to my first question is affirmative. Eric Goldman apparently had the same idea.
Austrotrabant's Blog 
Yahoo! Great news 🙂
Eric is a good source. Thanks for the update!
Hi Austrotrabant,
I agree – the policy has been liberalised to allow use of the trade mark in the body of the ad. I think this was inevitable given the ECJ’s affirmations of what constitutes “use” under the Trade Marks Directive. Whether it is wise to adopt this change before other causes of action have been decided (e.g. unfair competition, passing off) is debatable and time, no doubt, will tell. Given the ECJ’s exhoneration of Google, I don’t think it will matter whether or not the ad is permissible under arts 6 and 7. To put it another way, I think Google is trying to put arts 6 and 7 into layman’s terms (and will only (usually) refer to their policy as the standard for investigating an ad, not least because they won’t want to be seen to be exercising too much control over them) but I’m not convinced that their interpretation is right post-Portakabin. Perhaps Portakabin’s effect on those defences is a subject for another time and place.
I have another concern, particularly from a reseller’s point of view, in that I wonder whether Google has adopted the wrong test for confusion. Google’s standard, as set out above, is whether an ad is “confusing as to the origin of the advertised goods and services”; the ECJ / Art 6 ECD standard is confusion as to “on whose behalf a commercial communication which is part of an information society service is made”. A reseller could satisfy Google’s test but still fail the Art 6 ECD test. What do you think?
Hi Gareth,
Thank you for your comment! Just a quick reply concerning Art 6 and the test(s) for confusion. You quote the ECD standard as: ‘on whose behalf a commercial communication which is part of an information society service is made‘. Where did you take that from?
In a very recent post I’ve discussed that it looks to me that also the ECJ is applying the very same test it used in all other keyword advertising cases also for Art 6. (Please see para 71 of Portabakin which points to para 54 and 68 of the same decision). This would also make sense as I don’t see the point in having different test in trademark law.
Some might of course argue that para 71 referres to ‘accordance with honest practices in industrial or commercial matters‘ but for the ‘likelihood of confusion‘ (Art 5 (1) lit b ECD, the ECJ has applied exactly the same test in para 39 of BergSpechte. So, no I don’t think I see two different tests for confusion.
Concerning unfair competition I think that most arguments are very emotional but at the same time terribly weak. The two most popular arguments (at least in front of German and Austrian courts) are that consumers are ‘intercepted’ or that there is an image-transfer from the trademarked good to the goods advertised. As already said I think they are fairly weak and based on incorrect analogies.
As far as I remember, the reference by the UK High Court of Justice contains kind of unfair competition aspects. So I have to admit that my hopes rest with the UK court to clarify the outstanding issues… We will see…
Kind regards,
Austrotrabant
Hi Austrotrabant,
The Art 6 test I referred to is from the ECD, not the TMD. I should have made that clearer. It comes from Google France and the way the ECJ got around to describing why “vague” ads *must* be found to have an adverse effect on a TM’s essential function. The reasoning is as follows:
At para 86 of Google France, the ECJ states that the Art 6 requirement (that the origin of an electronic commercial communication be clearly identifiable) is applicable “in the display of advertisements on the internet”. This confirms, or rather restates, that Art 6 gives European Internet users more protection from advertising than is given to consumers who are exposed to advertising on other forms of media.
The Court ends para 86 saying that Art 6 “lays down the rule that the natural or legal person on whose behalf a commercial communication which is part of an information society service is made must be clearly identifiable”. This is a good point to ask why the Court is talking about Art 6 at all. Either: (1) it is a separable, standalone obligation; (2) it is helpful in getting the Court to its answers to the referred questions; or (3) we will be told it’s irrelevant. Since the Court doesn’t dismiss it, and since Art 6 is not found in the referred questions, the fact that the Court doesn’t discuss issues unnecessarily (e.g. BergSpechte, paras 42-44) means the Court refers to it because it has at least some relevance to determing what constitutes infringement under Art 5(1)(a), i.e. what constitutes an adverse effect on a registered trade mark’s functions.
In para 87, the Court makes its first statement that a TM owner can prohibit an (electronic) ad based on the public’s perception of the origin of the ad rather than specifically of its goods and services (although of course they will be a significant factor elsewhere in the assessment), saying that the “proprietor must be entitled to prohibit the display of third-party ads which internet users may erroneously perceive as emanating from that proprietor”.
The “which” in para 87 refers to the third-party ads, not the goods and services they advertise, meaning that the right to prohibit certains ads comes from a finding that internet users will think the *ad* is coming from the proprietor, regardless of what else they know about the goods / services are being resold etc (which is consistent with my reading of Portakabin, in particular in relation to the relevant defenses).
The Court then uses para 88-90 to wrap up its discussion, with para 88 providing the (uncontroversial) general statement that the national Court must decide if the essential function is affected, and paras 89 and 90 providing instructions for two (non-exhaustive) instances in which the national Court *must* find a likelihood of confusion.
Para 89 is the obvious case scenario: if the national Court decides that the ad suggests an economic link (no criteria specified), the national Court *must* find an adverse effect.
Para 90 addresses a less obvious case: if a national Court finds, on the basis of an ad in its entirety (and presumably in the context as described in para 85), that it is “vague” as to whether the *advertiser* is a third party or is economically linked to the TM proprietor, the conclusion *must* also be that there is an adverse effect.
Although Art 6 could have some application to the para 89 sceanrio, it is unnecessary there. There is, however, a very nice parallel (as well as textual proximity) between the discussion over an electronic commercial communication that is “vague” as to who is repsonsible for it and the statement that such communications must “clearly identify” the person on whose behalf they are made.
Although I think it could have been stated more clearly in the ECJ judgment, it seems that, rightly or wrongly, Art 6 has introduced a new threshold to govern online TM use, beyond which a TM properitor can act. You could think of Art 6 as having created a legal presumption that legislators felt was appropriate when they drafted the ECD (a less Internet-savvy time, shall we say!). The presumption goes as follows: electronic ads which do not clearly identify the advertiser responsible for them (national Court question) are presumed to make average Internet users (as they were understood by the legislators of the ECD) unable to discern the origin of the ad – and therefore, so the presumption goes, of the goods and services offered – so that the essential function of the mark being used is adversely effected. I haven’t read it yet, but is that consistent with the Austrian Court’s June finding in BergSpechte?
I’m not sure that this reflects reality (the Rosetta Stone AdWords case (Eastern District of Virginia, April 29, 2010) says consumers aren’t confused by sponsored ads), but that appears to have been the intention of Art 6 when it was drafted.
By going back to basics and focusing on the intention of the legislators, the ECJ also appears to have opted for a less expansive reading of Section 4 ECD as well (the safe harbours). I’m looking forward to the arguments that will follow on those questions!
Best wishes,
Gareth
Dear Gareth,
Hm… I guess only the legal materials to Art 6 ECD can tell us the true intention of Art 6 but the way I saw & see Art 6 is a far, far more simple one; It says that advertising as such has to be labelled as such, to avoid any confusion whether the ‘communication’ is a ‘editorial content’ or ‘commercial communication’.
Para 86 of Google France actually point to recital 29 in the preamble to Directive 2000/31;
“(29) Commercial communications are essential for the financing of information society services and for developing a wide variety of new, charge-free services; in the interests of consumer protection and fair trading, commercial communications, including discounts, promotional offers and promotional competitions or games, must meet a number of transparency requirements; these requirements are without prejudice to Directive 97/7/EC; this Directive should not affect existing Directives on commercial communications, in particular Directive 98/43/EC.”
So the way I see it, Art 6 is all about transparency and not aiming at protecting the TM-owners; “… the fact nonetheless remains that the allegedly unlawful use on the internet of signs identical with, or similar to, trade marks lends itself to examination from the perspective of trade-mark law… ” (para 87 Google France)
But… I am currently in a quite remote Austrian mountain village without all my materials, so this is probably more of a guess that a opinion. I will answer you in more detail once I am back in Vienna!
All the best,
Austrotrabant