google adwords: making money by riding on the coattails -or- an inventive business model

Making Money by Riding on the Coattails of the Reputation of the Trademarks of Others -or- an Inventive Business Model That Happens to Reveal the Flaws of the Traditional Perception of Trademark Use?

Masaryk University , Maximilian SchubertBrno, 07.04.2011

1Freitag, 08. April 2011

AdWords:

Riding on Coattails -or-

an Inventive Business Model

Masaryk University , Maximilian SchubertBrno, 07.04.2011


Content

‣ Introduction

‣ Explanation & Differentiation ‣ 2007 - 2011; Many Changes...

‣ Ongoing Legal Discussion

‣ Trademark Use - Art 5‣ Liability Exemption - Art 14

‣ The ECJ Rulings

‣ Trademark Issues ‣ Liability Exemption

‣ Summary & Outlook


Content

‣ Introduction




‣ The ECJ Rulings




Agenda Keyword Buying as a response to search engine SPAM:

Hargittai, The Role of Expertise in Navigating Links of Influence, in Turow/Tsui (Hrsg), The Hyperlinked Society: Questioning Connections in the Digital Age, Michigan Press (2008) 85ff.

ToGo.com (2001)


User

Simplified scheme of Search Engine Advertising


User

hotel edinburghscotsmanUser enters query:



Index

Ranking

User

Search

engine

hotel edinburghscotsman

846,000relevant pages

(Page) Rank

User enters query:



Index

Ranking

User

Search

engine



(Page) Rank

User enters query:

Search Engine Results Page (SERP)



Index

Ranking

User Advertiser

Search

engine

Ad-

Words



(Page) Rank

User enters query:




Index

Ranking

Advertiser books following ‘keywords’User Advertiser

Search

engine

Ad-

Words



(Page) Rank

User enters query:

- hotel - edinburghscotsman Keyword Options: “broad match”Local target: Austria, ViennaBid: EUR 0,15 per click




1. Differentiation: Top-Ad v. Side-Ad



‣ Top-Ad



‣ Top-Ad ‣ Side-Ad



‣ Top-Ad ‣ Side-Ad‣ “organic” Search Results



‣ Top-Ad ‣ Side-Ad‣ “organic” Search Results

illustrative!

Google Golden Triangle - Eyetracking how people view search results I Eyetoolshttp://eyetools.com/research_google_eyetracking_heatmap.html (18.03.2010).


http://eyetools.com/research_google_eyetracking_heatmap.html

http://eyetools.com/research_google_eyetracking_heatmap.html

2. Differentiation: Adv- v. Adv+

Does the text-ad bear the protected sign?




No: “Adv-”

“Adv-” = sign booked as keyword & sign not shown in the text of the ad.




Yes: “Adv+”No: “Adv-”

“Adv-” = sign booked as keyword & sign not shown in the text of the ad.“Adv+” = sign booked as keyword & sign shown in the text of the ad.


liberal restrictive

3. Differentiation: Keyword Options

Keyword OptionsWein & Co

Flaschenwein

Spirituosen

billiger Wein

bei Wein & Co Wien


liberal restrictive


Keyword

Options

high tolerance

ads shown often

‘high’ costs

Wein & Co

Flaschenwein

Spirituosen

billiger Wein

bei Wein & Co Wien


liberal restrictive


Keyword Options

low tolerance

few ads shown

‘low’ costs

Wein & Co

Flaschenwein

Spirituosen

billiger Wein

bei Wein & Co Wien


Agenda 4. Differentiation: ‘Keyword Buying’ v. ‘Keyword Advertising’

Search Engine Marketing

(organic) Search Results

‣ Search Engine Marketing is the umbrella term, also including Search Engine Optimisation.




Top-Ad

Side- Ad


Keyword Advertising: Top- & Side Ads


‣ Search Engine Marketing is the umbrella term, also including Search Engine Optimisation.‣ Keyword Advertising is the display of ads besides the search results. [1]

1: Fain/Pedersen, Sponsored Search: a Brief Histroy, http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.92.987&rep=rep1&type=pdf (29.04.2010).


http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.92.987&rep=rep1&type=pdf




Top-Ad

Side- Ad


Keyword Advertising: Top- & Side Ads

Top-Ad

Side- Ad


Keyword Buying: Ads in the Search Results


‣ Search Engine Marketing is the umbrella term, also including Search Engine Optimisation.‣ Keyword Advertising is the display of ads besides the search results. [1] ‣ Keyword Buying is an artificial word-creation in German to distinguish advertising inside

the ‘organic’ search results from regular keyword advertising.

1: Fain/Pedersen, Sponsored Search: a Brief Histroy, http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.92.987&rep=rep1&type=pdf (29.04.2010).




Agenda ‘Keyword Advertising’ ≠ ‘Keyword META TAG’


Agenda ‘Keyword Advertising’ ≠ ‘Keyword META TAG’

‣ Because the aim for different effects.

‣ Because Google said so.

‣ Because evolution/development just keeps moving on.


Differentiations & terms

‘Top Ad’ v. ‘Side Ad’

‘Adv+’ v. ‘Adv-’

Keyword Options

‘Keyword Buying’ v. ‘Keyword Advertising’

‘Keyword Advertising’ ≠’Keyword META TAG’


Content

‣ Introduction




‣ The ECJ Rulings




2007 - 2010; Any Changes?

‣ Ongoing developments:

‣ Tailored Advertising (Location, Language, etc.)

‣ Personalised Search: Search results influenced by previous searches

‣ Advertising in an augmented reality environment (continuous flow of

information), advertising on mobile devices (smaller screens)

‣ Demise of the browser address line

‣ Google Suggest (‘Did you mean?’)

‣ Ongoing Changes of Google’s Trademark Policy (‘No Deceptive Implications’)

‣ Slight “Facelifts” to the design of the results page (SERP)


Agenda

‣ Users don’t type in the complete search query as Google already offers suggestions while the user is typing.

Change: e.g. ‘Google Suggest’


Agenda

‣ The “Google Suggest” function can lead to a significant shift in demand.

“Grunderwerbsteuer”: real estate transfer tax[Stefens, Google Suggest rulez the SERP, http://seo.de/2253/google-suggest-rulez-the-serps/ (22.02.2010)]

Change: e.g. “Google Suggest”


http://seo.de/2253/google-suggest-rulez-the-serps/

http://seo.de/2253/google-suggest-rulez-the-serps/

Agenda

‣ The “Google Suggest” ... a way of addressing customers even before they have fully articulated what they are actually searching for?

Change: e.g. “Google Suggest”

Example, not a real screen-shot!


“text and keyword”

9 countries e.g. China, N. Korea

Google AdWords Trademark Complaint

Google AdWords Trademark Policy as of 07/04/2011

Use as keyword to trigger the ad Use in text of the ad

Search Engines Result Page

“investigation if ad-text is

confusing”

EU & EFTA

investigation if reseller or

informative website

the rest ...


Agenda Change: e.g. Facelift of the Labelling of Top-Ads



- 2007



- 2007 2007 - 2010



- 2007 2007 - 2010 2010 - 2011



- 2007 2007 - 2010 2010 - 2011 2011 -


Content

‣ Introduction




‣ The ECJ Rulings

‣Trademark Issues ‣ Liability Exemption



Liability for ads on Google AdWords

Liability arising from trademark law


Liability arising from unfair competition?

...

Advertiser


Liability for ads on Google AdWords



Liability arising from unfair competition?

...

Liability for infrigements of its customers?

Advertiser


Key Questions of Trademark Law

1: Does the use of the trademark in the course of Keyword Advertising lead to any assumption of origin or quality? 2: Are the rights of a trademark owner infringed if a trademark or a sign similar to it is used in the course of Keyword Advertising to direct the attention of users at an (identical or similar) product of a third party?


Agenda SHOP EXAMPLE

Placing a “home brand” (here: CLEVER) right next to a “loss leader” (premium

brand; here: PRIL) is a common practice within retail business to monetize a third

party trade mark value.

[Goldman, Brand Spillovers, Santa Clara Univ. Legal Studies Research Paper No. 09-01; Harvard Journal of Law and Technology, Vol. 22, 2008. Available at SSRN: http://ssrn.com/abstract=1324822 (30.03.2009)]


http://ssrn.com/abstract=1324822


Agenda SHOP EXAMPLE

Even if the shop only makes a small profit from selling the “premium product” or

even a small loss, a certain proportion of the customers will decide to buy the

“home brand”, thereby creating considerable profit.





Agenda SHOP EXAMPLE




Shelf M01 Shelf M01





Agenda SHOP EXAMPLE




Shelf M01 Shelf M01Level 2 Level 2





Agenda SHOP EXAMPLE





Position No.:

..., 251, 301, ...

(steps of 50)





Agenda SHOP EXAMPLE


Position No.:

..., 251, 301, ...

(steps of 50)


Summary: Stores are regularly allowed to utilize the reputation of a trademark to

support the sale of their own products and thereby create profit.

For search engines it has long been questionable whether advertisements on the

same page as the search results should be seen as infringing.




Agenda SHOP EXAMPLE





Key Questions of the Law of Unfair Competition

Should the display of ads in the course of Keyword Advertising be seen as an unfair “interception of

customers” [Abfangen von Kunden]

Is there a likeliness of an image transfer and/or is Google riding on the coat-tails of the good reputation of the trade mark?


Agenda Interception of customers, exploitation of the repuation

‣ It is not per se “unfair” to address potential customers.

‣ It is only “unfair” to purposely address customers of a competitor in very close proximity to their shops. (“presumptive customer”)

‣ Austrian case law: ‣ Reklamezettel: Addressing a customer and a shop assistant ‣ Stiftsparkplatz: Payment of bribes to a bus driver

‣ Interception possible e.g. eCommerce-Websites (e.g. Amazon, eBay). ‣ Perceived as irritating by users

‣ Exploitation of a reputation: requirement of the transfer of the reputation

[OGH, 16.01.1996, 4 Ob 4/96 -Kärntnerring-Garage- ÖBl 1996, 180; OGH 13.10.1970, 4 Ob 343/70 -Reklamezettelverteilen- ÖBl 1971, 41; OGH, 10.05.1996, 4 Ob 2244/96w -Stiftsparkplatz- ÖBl 1997, 61; OGH, 12.07.2005, 4 Ob 131/05a -whirlpool- MMR 2005, 446. ]


Agenda “Doorway”-analogy

‣ Definition of a doorway: A (non-fitting) analogy? ‣ Popular analogies: “city centre”, “shopping mall” and “supermarket”?‣ Possibility to present similar goods in a alphabetical order?

http://wikimapia.org/10344546/Burlington-Square-Mall




Agenda “Doorway”-analogy

‣ Definition of a doorway: A (non-fitting) analogy? ‣ Popular analogies: “city centre”, “shopping mall” and “supermarket”?‣ Possibility to present similar goods in a alphabetical order?


TM 1 TM 2




Content

‣ Introduction




‣ The ECJ Rulings




Art 5 (1) Directive 89/104/EEC (‘Trademark Dir’) - Basics

The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:

(a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered;

(b) any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark.

Art 5 (1) Directive 89/104/EEC


The proprietor is entitled to prevent all third parties who do not have his/her consent from using any sign in the course of trade if:

identical identical

identical/similar

identical/similar

likeliness of confusion

+

+ + =

=lit a.

lit b.

!!

sign goods


Art 5 (1) Directive 89/104/EEC - Basics


The proprietor is entitled to prevent all third parties who do not have his/her consent from using any sign in the course of trade if:

identical identical

identical/similar

identical/similar


+

+ + =

=lit a.

lit b.

TM

infringed

sign goods


Art 5 (1) Directive 89/104/EEC - Basics

TM

infringed



...[T]he proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.

identical/similar different detrimental

use+ = !+sign product



Content

‣ Introduction




‣ The ECJ Rulings




Art 14 Directive 2000/31/EC - Liability Exemption

‘Hosting’ 1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, [...] the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:

(a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or

(b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.

Art 14 Directive 2000/31/EC


Art 14 Directive 2000/31/EC - Liability Exemption

The service provider is not liable for the information stored at the request of a recipient of the service if:

‣ No actual knowledge of illegal activity

‣ Illegal activity or information is not apparent

‣ Upon obtaining knowledge acts expeditiously to remove or to disable access.

Art 14 Directive 2000/31/EC


Content

‣ Introduction




‣ The ECJ Rulings




Keyword Advertising Decisions by the ECJ

Preliminary Rulings:‣ Joint cases C‑236/08, C‑237/08 and C‑238/08, Google France v Louis Vuitton

Malletier, Google France v Viaticum Luteciel, Google France v CNRRH Pierre‑Alexis Thonet Bruno Raboin Tiger, a franchisee of Unicis, 23.03.2010.‣ Case C-278/08, Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmüller

GmbH v Günter Guni and trekking.at Reisen GmbH, 25.03.2010.‣ Case C-C-91/09, Eis.de v BBY Vertriebsgesellschaft mbH, 26.03.2010.

‣ Case C‑558/08, Portakabin Ltd, Portakabin BV v Primakabin BV, 08.07.2010.

Opinion of the General Advocate:‣ Opinion of Advocate General Poiares Maduro delivered on 22 September 2009 on

the joint cases C‑236/08, C‑237/08 and C‑238/08, Google France v Louis Vuitton Malletier, Google France v Viaticum Luteciel, Google France v CNRRH Pierre‑Alexis Thonet Bruno Raboin Tiger, a franchisee of Unicis

‣ Opinion of Advocate General Jääskinen delivered on 24 March 2011 on the case Case C‑323/09, Interflora Inc Interflora British Unit v Marks & Spencer plc Flowers Direct Online Limited


Content

‣ Introduction




‣ The ECJ Rulings




Google France - Art 5 (1) (a)

By application of Article 5(1)(a) of Directive 89/104 [...] the proprietor of a trade mark is entitled to prohibit a third party from using [a sign identical with that trade mark]

- without the proprietor’s consent,

- when that use is in the course of trade,

- in relation to goods or services which are identical with, or similar to, those for which that trade mark is registered

- and affects, or is liable to affect, the functions of the trade mark.

identical + =lit a. !functions affected+

sign goods

identical

ECJ, 23.03.2010, joint cases C-236/08 - C 238/08, Google France, MarkenR 2010, 174, par 49


O2 - Art 5 (1) (b)

The proprietor of a registered mark may prevent the use of a sign by a third party which is identical with, or similar to, his mark under Article 5(1)(b) of Directive 89/104 only if the following four conditions are satisfied:- that use must be in the course of trade;- it must be without the consent of the proprietor of the mark;- it must be in respect of goods or services which are

identical with, or similar to, those for which the mark is registered, and

- it must affect or be liable to affect the essential function of the trade mark, which is to guarantee to consumers the origin of the goods or services, by reason of a likelihood of confusion on the part of the public.

ECJ, 12.06.2008, C‑533/06, O2 Holdings and O2, ECR I‑4231, par 57.

identical/similar

identical/similar

ess. func. affected+ + =lit b. !

sign goods


Comparison: Likeliness of Confusion - Essential Functions Affected


[39] Art 5 (1) lit. b: [...] whether there is a likelihood of confusion when internet users are shown, on the basis of a keyword similar to a mark, a third party’s ad which...

... does not enable normally informed and reasonably attentive 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 an undertaking economically connected to it or, on the contrary, originate from a third party.

ess. funct. affected

[35] Art 5 (1) lit a. The function of indicating the origin of the mark is adversely affected if the ad...


ECJ, 25.03.2010, C-278/08, Bergspechte, MarkenR 2010, 171.






ECJ, 25.03.2010, C-278/08, Bergspechte, MarkenR 2010, 171, par 39, 35.



[39] [...] whether there is a likelihood of confusion when internet users are shown, on the basis of a keyword similar to a mark, a third party’s ad which...










ess. funct. affected =




The criteria for adversely affecting the essential TM-function and the likeliness of confusion are identical.




ess. funct. affected =



Art 5 (1) Directive 89/104/EEC - Comparison

identical identical

identical/similar

identical/similar


+

+ + =

=lit a.

lit b.

!!

pre Google France


Art 5 (1) Directive 89/104/EEC - Comparison

identical identical

identical/similar

identical/similar


+

+ + =

=lit a.

lit b.

!!

pre Google France

sign goods

identical

identical/similar

identical/similar


+

+ + =

=lit a.

lit b.

!!

functions affected+

post Google France

identical"



functions affectedArt 5 (1) lit a.

Art 5 (1) lit b.

detrimental useArt 5 (2)

Art 5 Directive 89/104/EEC - Summary LE

VEL

OF

PRO

TEC

TIO

N

HIGH

LOW

‣ Function of Origin

‣ Advertising Function ‣ Function of Origin


Content

‣ Introduction




‣ The ECJ Rulings

‣ Trademark Issues ‣ Function of Indicating Origin ‣ Advertising Function

‣ Liability Exemption



ECJ Google France - Trademark Functions

According to Article 5(1)(a) of Directive 89/104 the proprietor of a trade mark is entitled to prohibit a third party from using, that sign if that use affects, or is liable to affect, the functions of the trade mark.

Those functions include not only the essential function of the trade mark, the function of indicating origin, but also its other functions, in particular that of guaranteeing the quality of the goods or services in question and those of communication, investment or advertising.

TM Functions

Function of Origin

Advertising Function

ECJ, 23.03.2010, joint cases C-236/08 - C 238/08, Google France, MarkenR 2010, 174, par 49, 77.


ECJ Google France - ‘Function of Indicating Origin’

The essential function of a trade mark is to guarantee the identity of the origin of the marked goods or service to the consumer or end user by enabling him to distinguish the goods or service from others which have another origin.

The question whether that function is adversely affected by keyword advertising depends in particular on the manner in which that ad is presented.

National courts have to assess, on a case-by-case basis, whether the facts of the dispute before them indicate adverse effects, or a risk thereof, on the function of indicating origin.

Function of Origin

ECJ, 23.03.2010, joint cases C-236/08 - C 238/08, Google France, MarkenR 2010, 174, par 82, 83, 88.



Function of Indicating Origin is adversely affected if:

‣ the ad suggests that there is an economic link between that third party and the proprietor of the trade mark.

‣ the ad, while not suggesting the existence of an economic link, is vague to such an extent on the origin of the goods or services at issue that normally informed and reasonably attentive internet users are unable to determine, on the basis of the advertising link and the commercial message attached thereto, whether the advertiser is a third party vis-à-vis the proprietor of the trade mark or, on the contrary, economically linked to that proprietor.

Function of Origin

ECJ, 23.03.2010, joint cases C-236/08 - C 238/08, Google France, MarkenR 2010, 174, par 89, 90.



What does an ad have to look like, so as not to impair the function of indicating origin?

‣ Is it enough for a third party just not to show the competitor’s TM in the ad? (“Adv-”)

‣Competitor obliged also to display the competing brand?

‣Different situation if TM-owner also displays text ads?

‣Why should a TM-owner sponsor all the ads shown?



Text Ads:

Up to 4 lines,Headline: max 25 signs Following lines: 35 signs each Display URL

Further content & formal restraints:

e.g. price, goods & service offered

What does an ad have to look like, so as not to adversely affect the function of origin?


Agenda ‣ The aspect of what is meant by ‘vague’ remains subject to interpretation

by national courts. Where to draw the line between being ‘vague’ and not causing any wrong assumptions remains the crucial issue.

Discretionary questions stemming from Google France

‘Suggesting a connection’

Being ‘vague’ No wrong assumptions

Infringement No InfringementInfringement








Infringement No Infringement









Not having done everything to rule out any chance of confusion

TM-owner friendly view

e.g. OGH, 21.06.2010, 17 Ob 3/10f, Bergspechte II;UK High Court of Justice [2010] EWHC 2599 (Ch)









Not having done everything to rule out any chance of confusion

Not having done anything to cause any kind of confusion

TM-owner friendly view Advertiser friendly view

e.g. OGH, 21.06.2010, 17 Ob 3/10f, Bergspechte II;UK High Court of Justice [2010] EWHC 2599 (Ch)

e.g. BGH, 16.01.2011, XXXX, Bananabay


Content

‣ Introduction




‣ The ECJ Rulings

‣ Trademark Issues ‣ Function of Indicating Origin ‣ Advertising Function

‣ Liability Exemption



ECJ Google France - Advertising Function


The trade mark owner may have not only the objective of indicating the origin of its goods or services, but also that of using its mark for advertising purposes designed to inform and persuade consumers.

The proprietor of a trade mark is entitled to prohibit a third party from using his trade mark if that use adversely affects the owner’s use as a factor in sales promotion or as an instrument of commercial strategy.

With regard to the use of that sign for keyword advertising, it is clear that that use is liable to have certain repercussions on the advertising use of that mark by its owner and on his/her commercial strategy.





Repercussions caused by the use of a sign identical with the trade mark by third parties do not of themselves constitute an adverse effect on the advertising function of the trade mark.

When internet users enter the name of a trade mark as a search term, the home and advertising page of the proprietor of that mark will appear in the list of the natural results, usually in one of the highest positions on that list. That display means that the visibility to internet users is guaranteed.

Thus it must be concluded that use of a sign identical with another person’s trade mark for keyword advertising is not liable to have an adverse effect on the advertising function of the trade mark.





‣What should happen in the unusual case that the TM-owner’s website is not included in the natural search results?

‣ In practise only the first couple of results count. Is it still enough for the TM-owner to be on the second page? (“Primacy Effect”)

‣ Is there a duty for competitors to check if the TM-holder’s website is (still) being displayed?


Content

‣ Introduction




‣ The ECJ Rulings




ECJ Google France - Liability Exemption

The liability of a referencing service may be limited under Article 14 of Directive 2000/31, if the role played by that service provider is neutral, in the sense that its conduct is merely technical, automatic and passive, pointing to a lack of knowledge or control of the data which it stores.

With regard to Google AdWords, it is apparent that, with the help of software which it has developed, Google processes the data entered by advertisers and the resulting display of the ads is made under conditions which Google controls. Thus, Google determines the order of display according to, inter alia, the remuneration paid by the advertisers.

ECJ, 23.03.2010, joint cases C-236/08 - C 238/08, Google France, MarkenR 2010, 174, par. 114, 115, 116.

The Directive never mentions the criteria of ‘neutrality’!



The mere facts that the referencing service is subject to payment, that Google sets the payment terms or that it provides general information to its clients cannot have the effect of depriving Google of the liability exemptions.The fact that Google matches keywords and search terms is also not sufficient of itself to justify the view that Google has knowledge of, or control over, the data entered into its system by advertisers and stored in memory on its server.

The role played by Google in the drafting of the commercial message which accompanies the advertising link or in the establishment or selection of keywords is however relevant.

The national court, which is best placed to be aware of the actual terms on which the service is supplied, must assess whether the role thus played by Google corresponds to that described in Art 14 of Directive 2000/31.

ECJ, 23.03.2010, joint cases C-236/08 - C 238/08, Google France, MarkenR 2010, 174, par 116, 117, 118, 119.



- Keyword Tool (neutral) - Price Setting Mechanism (neutral) - Broad Matching Function (neutral) - Display of Ads (neutral) .Every part considered on its own, appears neutral, thus the liability exemption might be applied.

But however, should the broader concept of selling ‘user attention’ really be deemed neutral?


Content

‣ Introduction




‣ The ECJ Rulings




Summary & Outlook

‣Change in the concept of trademark protection.

‣Keyword Advertising by itself does not infringe function of origin, only the content might.

‣Unclear scope of the protection of the advertising function.

‣Liability of referencing services (AdWords) still not clear.

‣No legal certainty ...yet.

Many questions remain...


Agenda Thank You For Your Attention

Mag. Maximilian Schubert LL.M. [email protected] www.austrotrabant.at

Ott/Schubert, ‘It’s the Ad text, stupid’ – Cryptic Answers by the ECJ won’t Help to establish Legal Certainty for Online Advertisers, Journal of Intellectual Property Law and Practice 2011, Vol. 6, No. 1.


mailto:[email protected]

mailto:[email protected]

http://www.cynicism.at

http://www.cynicism.at

Agenda BACKUP

BACK UP


FLYER / INVITATION!"#"$%&'()*+,$#*-%."/(0-%'1.'0"2*)#-*-(-,'1.'0"2'")3'-,/4)1015%

cordially invites you to attend a workshop:

Keynote:

Mag. Maximilian Schubert, LLMLegal o!cer at ISPA (Internet Service Providers Austria)

Worskhop will be led by:

Mgr. Mat j My⌃ka (Institute of Law and Technology)

Date and time: 7th April 2011, 14.00 - 16.00Venue: Room n. 109, Faculty of Law, Masaryk UniversityEntrance: FreeRegistration at: www.cyber.law.muni.cz

Making Money by Riding on the Coattails of the Reputation of the Trademarks of OthersOR an Inventive Business Model That Happens to Reveal the Flaws of the Traditional Perception of Trademark Use?


ADDITIONAL LINKS:

‣ Google Suggest: ‣ How Google Instant’s Autocomplete Suggestions Work (07/04/2011)‣ Google loses autocomplete defamation case in Italy (05/04/2011)

‣ Google Trademark Policy:‣ http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=6118


http://searchengineland.com/how-google-instant-autocomplete-suggestions-work-62592

http://searchengineland.com/how-google-instant-autocomplete-suggestions-work-62592

http://www.zdnet.co.uk/news/regulation/2011/04/05/google-loses-autocomplete-defamation-case-in-italy-40092392/

http://www.zdnet.co.uk/news/regulation/2011/04/05/google-loses-autocomplete-defamation-case-in-italy-40092392/

http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=6118

http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=6118

User perspective:

‣ Objectively most users’ usability stills are very poor.‣ Anyway, they don’t mind!

‣ Objectively users don’t really understand how search engines function and how they fund themselves. ‣ Actually, they don’t care!

‣ Only one out of six search engines users can differentiate between search results and paid advertisement.‣ But they just (subconsciously) ignore it most of the time!

‣ Enormous trust in search engines!

Fallows, Search Engine Users – Internet searchers are confident, satisfied and thrusting – but they are also unaware and naive (02.04.2009) 27;Fries, Suchverhalten im Internet VDM Müller Verlag (2007), Saarbrücken 72;

Pan/Hembrooke/Joachims/Lorigo/Gay/Granka, In Google We Trust: Users’ Decision on Rank, Position, and Relevance, Journal of Computer-Mediated Communication 2007, 12/3 (02.04.2009)


Agenda Online Dichotomy:

‣ Challenge:

“to find an adequate balance between the legitimate concerns of rightholders to be protected, and those of the public to access and use the information contained in these assets” [Gilliéron, ICC 2008/6 688]

‣ Consumer Search Costs:

“[T]rademark law, by preventing others from copying a source-identifying mark, reduce[s] the comsumers’ costs of shopping and making purchase decisions, for it quickly and easily assures a potential customer that this item - the item with the mark - is made by the same producer as other similarly marked imtems that he or she like (or disliked in the past” [United States Supreme Court, Qualitex, Co. v. Jacobson Products Co. Inc, 514 U.S. 159, 163 et seq. (1994) ]


Agenda Online Dichotomy:

‣ Shop Example:

“[S]uppose a customer walks into a store and asks for Playboy Magazine and is then directed to the adult magazine section, where he or she sees Penthouse or hustler up in front on the rack while Playboy is burried in back. One would not say that Penthouse or Hustler had violated Playboy’s trademark. this conclusion holds even true if Hustler paid the store owner to put its magazines in front of Playboy’s.”

[Judge Berzon in his dissenting opinion in Playboy Enterprises v. Netscape Communications, 354 F.3d 1020, 1025 (9th Cir. 2004) 1034-1035]


Agenda

‣ The content of text-ads; the future playground of law of unfair competition lawyers?

Law of Unfair Competition & text ads

Moringware Inc. v. Hearthware Home Products Inc.

Keyword used: TM of the competitor

Question: “False statement / derogatory speech”as the ad text implies somehow implies that the competitors’ goods are imitations?

OLG Hamm, 26.01.2010, 4 U 141/09

Question: “eye-catching ad” as the ad does explicitly not state that the price is only valid for one package per purchase.

For more information on these cases please see www.austrotrabant.at


http://www.austrotrabant.at

http://www.austrotrabant.at

!(113.)

Opinion Maduro, Google France

i) no consent by TM holder

ii) in the course of trade

iii) relates to goods/services

Only for TMwith a rep.

affects otherTM functions

iv) affects main TM function

trade mark

infringement

Booking of keyword by advertiser (147.) " !(151.)

NO(private, not in the course of trade)

Use of TM in the text of ads by advertiser (46.) (153.)"" " " MAYBE

(if ad or website creates confusion)

Contributory liability by Google/AdWords (114.) " " " (123.)" MAYBE

(under certain circumstances)

Liability Exception Art. 12-14 Directive 2000/31

Directive Applicable?

(136.)

AdWords

Google

Yes

Yes ""

Exception applicable?

(137.)

AdWords

Google

No

Maybe !" MAYBE

for AdWords (“not neutral”)

criteria fulfilled" criteria hypothetically fulfilled" ! criteria not fulfilled

Criteria for trademark infringement [54. & Fn 21.]Issues dealt with

in the GA’s opinion

Display of natural results by Google (72.) " " " NO

(no confusion)!(86.-92.)

Infringement of TMs with reputation (93.) " " " NO

(result of a balance of interests)

not required (94.)

Allowing advertisers to select keyword by Google

(60.) " " !(62.-67.)

NO(different goods &

no confusion)!(69.)

Display of advertiser’s ads by Google (70.)

(86.-92.)!" " NO

(no confusion)"(79.-81.)

“other side of the coin”

“no risk of confusion on

the side of the consumer”


Opinion Maduro, Google France

Google

SERP

Adwords

Keyword Selection Advertiser

Advertiser’sWebsite

Buying/booking of the keyword by the Advertiser is a private actand thus no use in commerce.

Thus the ii) criteria is not fulfilled. (151.)

The sale /allowing of selection of the keywords by Adwords is not a use for related to similar goods and service as Adwords sells keywords and NOT

good or services which are similar to the ones of the TM holder. Thus the iii) criteria is not fulfilled. (67.)

AdWord’s service establishes a linkbetween the keyword/TM and the

goods of the advertiser. (79.)Thus iii) criteria is fulfilled.

However there is no risk of confusion (86.-92.)

Thus the iv) criteria is not fulfilled.

Ads by the advertiser, might be infringing, (153.)

depending on the content of the ad and the website =if they create confusion.

Liability governed by

national law

Use 1

Use 2


OGH: Keyword Buying?

Top-Ad


Side- Ad

List of Hits:(organic) SR + Top Ads

List of Hits (“Trefferliste”)broad meaning

Top-Ad

Side- Ad

List of Hits: (organic) Search Results


List of Hits (“Trefferliste”)narrow meaning

Top-Ad

Side- Ad


Simplified layout of a SE result page


OGH: Keyword Buying?


[6] [...] 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 the natural results.

[43] [...] In those circumstances, examination of the protection conferred by a trade mark on its proprietor in the event of the display of advertisements of third parties which are not ‘sponsored links’ would not be useful in resolving the dispute in the main proceedings.

In the view of the ECJ, Google does not display advertisements inside their ‘organic’ search results.


google adwords: making money by riding on the coattails -or- an inventive business model

Education