keyword search Archives - IPOsgoode

Keyword Advertising: When are competitors allowed to use your trademark?

ccraig — Mon, 26 Jul 2010 00:55:38 +0000

Robert Dewald is a JD Candidate at Osgoode Hall Law School

Online keyword advertising, using internet search engines such as Google and Yahoo!, continues to be a highly contentious area of the law.�� Litigation involving trademark infringement by competing companies in keyword advertising campaigns continues in Canada and around the world.�� In Canada, it appears that competing companies are allowed to utilize each others’ respective trademarks as keywords for online advertising so long as the trademark does not appear within the sponsored link or advertisement ().�� On the surface, advertisers have great latitude to use competitors’ trademarks for keyword ads.�� Yet many jurisdictions around the world attempt to prevent ads that mislead customers or damage competitors’ trademarks.��

The European Court of Justice (ECJ) has addressed the issue of misleading keyword advertising on internet search engines in Portakabin Ltd and Portakabin BV v Primakabin BV.��

The plaintiff, ., is a manufacturer and supplier of mobile buildings and is the owner of the PORTAKABIN trademark for goods in both metal and non-metal buildings, parts and building materials.�� The defendant is a competing company that also manufactures and markets its own mobile building units, such as work shelters or temporary offices.�� Primakabin is also engaged in selling and leasing used units, including those manufactured by Portakabin.

The basis of the claim against Primakabin is that it paid to have its web address and company description posted as a sponsored link when users of Google typed in 'Portakabin' or misspellings of the word.�� The heading of Primakabin’s ad, which appeared once one of those words was entered into the search engine, was ‘new and used units’. Later Primakabin changed this to ‘used portakabins’.

Portakabin commenced its action against Primakabin seeking an injunction to prevent the use of its trademark as a keyword for Primakabin’s advertisements on Google’s internet search engine. Portakabin also sought relief from Primakabin’s use of its trademark when advertising second-hand Portakabin units. Portakabin’s claim alleged that Primakabin greatly benefited from online keyword advertising using the PORTAKABIN trademark to market used Portakabin models.�� Portakabin also stated that the use of its trademark as a keyword and within Primakabin’s ads mislead customers, ultimately damaging the value of the PORTAKABIN mark.

In response to the reference from the national court, the ECJ provided guidance to help determine when trademark owners may prevent the use of the mark by an advertiser.�� The ECJ stated that “a trade mark proprietor is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with, or similar to, that mark…where that advertising does not enable average internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or from an undertaking economically linked to it”

Building upon this test the ECJ clarified when a trademark owner may restrict the use of a mark as keywords for internet search engines, that was used without the consent of the owner and is identical with, or similar to the owner’s trademark.

The European indicates that the owner of a trademark is entitled to prevent use, without the owner’s consent, of that mark should the use adversely affect the function of that trademark.�� The Court, referring to case law, explained that if the ad suggests there is an economic link between the advertiser and trademark owner, or the ad is vague to the extent that the origin of the goods or services is thought to be linked to the trademark owner, the conclusion must be that there is an adverse effect on that function of the trade mark.

However, in contrast the ECJ indicated that the trademark owner “cannot oppose that use of the sign, identical with its mark, if that use is not liable to cause detriment to any of the functions of that mark”.�� This assessment, by the ECJ, indicates that the core of the national courts analysis must be to determine if the average internet user would be misled to think that the source of Primakabin’s advertisement was Portakabin.

If the national court finds that the ad does not allow the average internet user, or enables them only with difficulty, to determine whether the goods or services advertised originate from the trade mark owner or from a third party, it is unlikely that the advertiser can claim not to be aware of the ambiguity caused by the ad.�� The ECJ advised, in this circumstance, that because the advertiser has full knowledge of its economic sector and chose keywords corresponding to another company’s trade mark, the advertiser cannot, in principle, claim to have acted in accordance with honest practices in industrial or commercial matters.

Despite the potential that Primakabin’s advertising campaign has to mislead internet users, the ECJ observed that the sale of second-hand goods under a trade mark is a well-established form of business, with which the average consumer will be familiar.�� As a result, the ad will likely not create the impression that the reseller and the trademark owner are economically linked or that the ad is seriously detrimental to the reputation of that trademark.�� The ECJ concluded its explanation stating that without using the trademark, the reseller who markets second-hand goods under another person’s trade mark, will have difficulty communicating such information to his potential customers without using that mark.

The ECJ then went on to analyze how Primakabin’s conduct, as a reseller of used Portakabin units, influences the plaintiff’s claim.�� Portakabin claimed that Primakabin had removed any reference to the trademark PORTAKABIN from the used mobile buildings which it was selling and replaced it with the wording ‘Primakabin’.�� This practice of rebranding was later confirmed by Primakabin.��

When a product is rebranded by a reseller, without the consent of the trademark owner and resulting in the trademark of the manufacturer being entirely concealed, the ECJ advised the national court that the trademark owner is entitled to prevent the reseller from using that mark in its advertisements.�� The ECJ continued, stating that the use of the trademark by the reseller, in this circumstance, would damage the essential function of the trademark, which is to indicate the original origin of the goods.

This reference to the ECJ clarifies the ability of keyword advertisers to utilize competitor’s trademarks.�� The national court must now consider if Primakabin’s keyword advertisements mislead internet users as to the origin of the advertised goods.�� The national court must also weight Primakabin’s business practices of occasionally rebranding Portakabin’s units when determining if the value of the PORTAKABIN trademark has been damaged.��

Advertising on internet search engines should allow broad use of keywords, including trademarks, to provide customers the ability to view as wide a spectrum of products as possible.�� It is appropriate that the ECJ holds that advertisers may utilize trademarks as keywords for search engine ads, while granting trademark owners the ability to prevent the use of their mark in ads that mislead internet users, or damage the value of the trademark. This ECJ opinion appropriately outlines the boundaries that limit keyword advertisers from utilizing competitor’s trademark while balancing the rights of trademark owners and advertisers.

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Online Keyword Advertising: Misleading Customers? Or Providing Alternatives?

ccraig — Tue, 22 Jun 2010 01:45:02 +0000

Robert Dewald is a JD Candidate at Osgoode Hall Law School

Online advertising is a growing and lucrative business.�� In 2009, $22.7 billion USD was spent on online advertising within the U.S. which is to grow to $25.1 billion USD by 2010.�� A significant amount of this revenue is generated by Google, Yahoo and other search engines which allow targeted advertising linked to keywords entered when searching the internet.�� Advertising can be linked to any word, even those registered as trademarks for a competing company.�� This advertising technique allows the bidders to have their website posted as a sponsored link above the organic search results, potentially diverting customers away from the website initially sought after.��

is Canada’s first jurisprudence regarding keyword advertising on search engines.�� In this decision the (the Agency) sought a permanent injunction restraining (VCC Inc.) from attaching their advertising (i.e. being a sponsored link) to keywords that include the business names of other educational institutions.��

VCC Inc. is subject to the BC Private Career Training Institutions Act, and bylaw 29, passed under this Act, prohibits institutions such as VCC Inc. from engaging in advertising that is false, deceptive or misleading.�� The Agency alleged that VCC Inc.’s use of competitors’ business names as keywords in their Google or Yahoo advertisements was in violation of Bylaw 29, and was designed to mislead students seeking information about one institution, away from that institution, and towards one of its own.��

To further its argument, the Agency utilized two accounts of complainants being mislead by VCC’s advertising.�� The first complainant registered at VCC Inc. in error, thinking it was the , while the second sought information about the but selected the sponsored link of instead.�� Upon discovering her error the first complainant was given a full refund.��

In arriving at his decision Justice Gaul consulted Canadian Trade-mark jurisprudence and U.S. case law regarding advertising using keyword searches.�� Justice Gaul concluded that VCC Inc. had not misled the complainants and that VCC’s use of competitors’ business names, as keywords, within its internet advertising campaign did not contravene Bylaw 29.�� Justice Gaul found that the complainants “were not misdirected or led astray by anything other than [their] own oversight” (PCTIA v. VCC, para. 75) and accepted as fact that VCC had not "ever used the names of competitors or trademarked terms in the title line, description line or URL of its online advertisements." (PCTIA v. VCC, para. 26).��

This decision is entirely appropriate.�� Consumers on the internet should always adopt a ‘buyer beware’ attitude, especially when browsing educational institution or other products on the internet.�� As long as a competitor’s business name is not used directly in the advertisement, this form of advertising is no different than placing an ad, next to a competitor’s, in the yellow pages, or newspaper.�� Providing a variety of options for consumers to consider, informs search engine users, allowing them to make informed decisions regarding which products to buy or what school to attend.�� This free market approach to keyword advertising on search engines benefits both advertisers and consumers and is a solid precedent for the rest of Canada to follow.

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IP Osgoode Speaks: Graeme Dinwoodie “A Comparative Analysis of Liability for Keyword Advertising”

ccraig — Tue, 03 Nov 2009 02:34:44 +0000

Nathan Fan is a JD candidate at Osgoode Hall Law School.

This past Thursday, IP Osgoode hosted Professor Graeme Dinwoodie, Oxford Professor and Director of the Oxford Intellectual Property Research Centre, who gave a lecture on recent developments in keyword advertising cases. Titled “A Comparative Analysis of Liability for Keyword Advertising”, his lecture focused on a detailed analysis of a set of recent keyword advertising cases arising in the US and in the EU.

Dinwoodie first focused on recent developments in American case law. The first case brought to attention was a recent U.S. Second Circuit decision in (April 3, 2009), where it was held that Google’s Adwords sale of ��ܱ𳦴ǳ�’s trademark as keyword triggers to advertisers may constitute an actionable claim under the Lanham Act.

In analyzing ��ܱ𳦴ǳ�’s decision, Dinwoodie first looked at a prior Second Circuit decision on pop-up ads, where the court ruled that the defendant did not engage in trademark use under Section 45 of the (“use in commerce”).�� In essence, the Second Circuit court held that the main issue of trademark infringement claims was whether the trademark was used to brand any goods (trademark use requirement), leaving any confusion arguments to the wayside. As such, subsequent cases in the Second Circuit were being decided on the basis of ‘no trademark use’ only. Such a trademark use requirement would effectively immunize any search engines from liability.

Dinwoodie noted that the Second Circuit’s grounds for decision on keywords departed from the rest of the Circuits, where some claimants still prevailed on the confusion argument. However, due to the high threshold for proof of confusion, it resulted in most of the cases in all the Circuits coming to similar judgments, albeit for different reasons. Dinwoodie also addressed some policy concerns arising from the disparate grounds utilized by the Circuits, including the uncertainty of compliance for search engines, the difficulty for trademark owners to police keyword infringement and damages, and the implications for future trademark law.

The Rescuecom decision sought to accept the policy critiques of the trademark use requirement arising out in the 1-800-Contacts decision. Dinwoodie noted that the judgment itself was in a somewhat peculiar form, with a notably short judgment followed by an Appendix. While the Appendix was considered to just be “dictum”, it explained that the 1-800-Contacts decision had just been misunderstood by the district court. The Appendix also included a notation that it had the agreement of the 1-800-Contacts judges.

The immediate significance of the decision is that the Second Circuit has now chosen to focus on confusion as the overall barometer of liability, leaving search engines potentially liable.

Dinwoodie’s second focus in the lecture was on recent developments in the EU. The Advocate-General (AG) of the European Court of Justice (ECJ) had recently completed a recommendation report regarding three cases referred by the French Supreme Court involving Google’s system and Louis Vuitton, Viaticum, and Tiger (this topic was covered in a previous post here).�� From the referral, three questions were raised to the AG.

The first question referred to the AG was whether search engines were liable for the sale and display of keyword advertising under Article 5(1) and 5(2) of the EU Trade Mark Directive.�� Article 5(1)(a) provides protection for trademark owners against the use of identical signs in relation to goods or services, while 5(1)(b) provides protection against the use of similar signs for similar goods or services that is likely to cause confusion on the part of the public. Article 5(2) protects mark holders whose trademark has a reputation, from the use of signs that take unfair advantage of, or is detrimental to, the distinctive character or reputation of that trademark.

With regards to Article 5(1)(b), the AG made the distinction between the sale of ads (including the keyword suggestion tool) and the display of sponsored links. As defined in Article 5(1)(b), the use must have a link with similar goods and services of the mark owner. The AG stated that the sale of ads by Google involved no services sold to the public and did not involve similar goods and services, and thus carried no liability.

The AG continued to state that the display of sponsored links rested on the essential function of the display and that there is no judgment about the trademark until the link is clicked. Thus, based on the trigger alone, there would be no confusion on the part of the public. Here, Dinwoodie noted that the AG’s underlying policy concern was that his analysis should not make Google liable for the creation of organic results, as it would effectively kill the search engine market. In doing so, Dinwoodie questioned whether the AG’s assessment of public confusion should have been factually determined by national courts.

In addressing Article 5(1)(a) and 5(2), the AG stated that the protection offered under these provisions was not absolute and ought to be balanced against other values, including freedom of expression, freedom of commerce, and fundamental rights, among others. The AG found keywords as essential instruments by which information is organized and made accessible to internet users.

The second question referred to the AG was whether search engines were immune under the E-Commerce Directive, absent any actual knowledge. Under Article 14, Google’s organic search results are immune to liability. However, there is a distinction between organic and paid search results. Because Google profits from its AdWords service, it no longer provides “neutral” search results and is barred from the immunity provisions of Article 14.

The third question was whether advertisers were liable to trademark owners for the purchase of keywords. The AG responded with a similar policy concern as in the previous questions, stating that the allowance of advertiser liability would undermine the policies behind search engine immunity. Dinwoodie noted here that the AG had only addressed ‘trigger-only’ keywords (i.e. ads that are triggered by keywords, but with no actual reuse of the keyword in the ad) and did not address ‘trigger plus ad text’ (i.e. ads that are triggered by keywords and the keyword also appears in the ad itself).

The report of the AG is only a recommendation for the ECJ and is not binding. While the ECJ upholds about 80 per cent of AG recommendations, the most recent recommendations in this field have not been so readily accepted. Dinwoodie does not predict how the ECJ will respond to the AG’s report, but he does provide a couple of issues with the AG’s report that the ECJ may struggle with in deciding whether to accept the recommendations.

One of his concerns was the fact that the AG had made summary judgment with regards to his assessment of public confusion. Dinwoodie thinks it would be more readily received if the AG had deferred the issue to the national courts.

Another concern is that in addressing the extent of trademark protection and the balancing of other values, the ECJ may find that the AG’s list of balancing values may be too broad in scope (e.g. freedom of expression).

The ECJ will not be making its decision until early next year, but with the serious changes to the EU trademark law landscape proposed by the AG, the ECJ may wish to take its time in making this decision.

Powerpoint slides and video coverage of Professor Dinwoodie's talk, including the questions and answer period, may be found on IP Osgoode's .

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