Questions from around Europe, which should shed light on whether registering keywords or accepting registrations for keywords can be trade mark infringement, are currently pending in cases before the ECJ. If the ECJ give full answers, this could profoundly affect the law relating to online advertising Europe-wide including the UK.
What are keywords?
When users search the internet, they get the search results based on relevance of content. If the same term or keyword has been sold by a search engine or browser operator to an advertiser it may also bring up advertisements that may or may not be directly relevant to the search term. The most common use of keywords now is to sell them to advertisers, so that when a user puts a term into a search engine or browser, the advertiser’s designated advertisement appears on screen. Where an exact match cannot be found, the browser or search engine may ‘broad match’ or ‘phrase match’ to the closest advertisements it can provide.
First UK case
The main case in the UK in this area involved a dispute between Reed Executive Plc and Reed Business Information Ltd, over the use of the mark Reed on a job vacancy website including its metatags and in related banner ads (Reed Executive Plc v Reed Business Information Ltd [2003]).
Facts
The claimant, Reed Executive, originally a high-street business including Reed Employment, owned a registered trade mark, Reed, in class 35 for employment agency services. Its main business was the provision of temporary staff and the introduction of potential employers to potential employees. More recently the claimant had operated its business through the added medium of a website at www.reed.co.uk.
The defendants had been in the publishing business using the name Reed since 1983. They published approximately 50 magazines and ran approximately 30 websites. An important part of the publications were the recruitment advertisements they contained; indeed some consisted predominantly of job vacancy advertisements rather than editorial.
As the internet developed, publishers began to move into online publishing and websites were recognised as an important new area competing with print publications for job vacancy advertising businesses.
The defendants began to operate the website www.totaljobs.com for an online job vacancy service and initially used the mark Reed as part of their trading names Reed Elsevier and Reed Business Information on the website. ‘Reed Business Information’ was used in the metatags of their site, which it was acknowledged would have an effect in calling up the site in response to a search engine request for ‘Reed’ alone.
There was already evidence of general confusion amongst the public, who thought that the claimant and the defendants were related companies even before the defendants moved into the online job vacancy business. The claimant brought evidence that the move by the defendants into the online job vacancy business heralded a change of business for the defendants that caused increased confusion. Not only were the businesses thought to be related but also people were confused as to what each respective business did. The defendants application to register Total Jobs as a trade mark for ‘advertising and business information services, employment agency services and consulting services’, illustrated this change of direction from publishing to something much closer to the claimant’s area of business.
There was, unsurprisingly, evidence of confusion of the defendants’ website with the claimants. The defendants, wishing to avoid such confusion, removed all relevant references to Reed in relation to their site and metatags as far as possible before the trial. It was still possible that, due to the inertia of some search engines and web directories, some of the defendants’ old web pages would be brought up by a request for ‘Reed’, but these would have ranked well below the claimant’s site.
The defendants had made arrangements to have banner ads for their total jobs site pop up at the margins of web pages when terms like ‘job vacancies’ and ‘recruitment agencies’ were put into search engines. In the case of one search engine, Yahoo, such an arrangement was made for when the word ‘Reed’ was typed in.
It was accepted that the defendants did not want to trade off the claimant’s reputation for Reed, but wanted instead to build up their own goodwill for employment services through www.totaljobs.com. However, the claimant was unhappy at the defendants’ use of the name ‘Reed’ even as part of trading names like Reed Business Information in relation to www.totaljobs.com and thought the removal of references to Reed from the website had been too slow. They sued for trade mark infringement and passing off.
At first instance the defendants were found to have committed both trade mark infringement and passing off.
Trade mark infringement
Mr Justice Pumfrey (as he then was) noted that it had been a difficult question for him, but held that the defendants’ activities for an online jobs notice board were ‘employment agency services’ and therefore fell within the ambit of protection afforded to the claimant by its registered Reed mark.
The judge thought that the sign used by the defendants, eg Reed Business Information, was similar to the claimant’s registered Reed mark and was used in relation to similar services (if indeed not identical) for which the claimant’s trade mark was registered, in circumstances where confusion had been proven sufficient to constitute trade mark infringement.
Passing off
The defendants did not wish to cause confusion or deception, but were aware of its likelihood. Online job vacancy websites, such as www.totaljobs.com, were a natural development of the defendants’ job advertisement activities, but it was a different business from traditional publishing. By moving into the new area of website job vacancy services the defendants had become direct competitors of the claimant. There was evidence that members of the public were confused into thinking that the defendants’ website was associated with the claimant’s. The three elements of passing off, reputation, misrepresentation and damage had been proven.
Banner advertisements
The defendants’ specification of the use of ‘Reed’ to search engines to purchase a pop up ad for www.totaljobs.com was infringement.
Use of own name defence
Mr Justice Pumfrey considered the own name defence and confirmed that a defendant may not use its own name if this results in confusion. If it does there will be no defence to an action for passing off or trade mark infringement. If passing off is proved, the use of the own name cannot be ‘in accordance with honest practices in industrial or commercial matters’ as required by s11(2) of the Trade Marks Act 1994, so there will also be trade mark infringement.
Decision on metatags
The judge acknowledged that use of the word ‘Reed’ in ‘Reed Business Information’ was trade mark use, but said that if the only effect of use in the metatags was to allow the defendants’ website to appear in the list of search hits below the claimant’s site, and the trade mark was not used in the defendants’ website content this was not trade mark infringement.
The judge also suggested that if use of a metatag was trade mark use, there would be no own name defence to trade mark infringement, since metatag use is invisible and might not satisfy the ‘honest business practices’ requirement.
As for invisible metatag uses, the judge’s conclusion on passing off mirrored his conclusion on trade mark infringement.
Reed Appeal
The Court of Appeal allowed the defendants’ appeal.
The Court of Appeal was of the view that users knew that banner ads or irrelevant sites appeared when searches were made. There would be insufficient confusion to make use of only similar marks, a registered trade mark infringement, unless the content of the advertisement or site in the search results contained the registered mark (when the infringement would be due to the content on ordinary principles and not the keyword use). The lack of confusion also meant there was no misrepresentation and no passing off. Causing a site to appear in search results through keywords or through metatag use was not enough without more to suggest a connection with anyone.
Even where an identical mark was used for identical goods or services, meaning confusion was not necessary to establish trade mark infringement, the Court of Appeal doubted whether there had been use in the course of trade to found infringement but did not expressly make a finding on this point.
Since the full own name had not been used for banner ads and metatags the Court did not need to consider the defence in this context.
International Context
There are several authorities on metatags worldwide that acknowledge the use of another’s trade mark in metatags may be legitimate:
In the US case of Nissan Motors Co Ltd v Nissan Computer Corp [2000], the defendant was allowed to use Nissan in its metatags provided this was in relation to its own business called Nissan in the field of computers and not cars.
In Playboy v Terri Welles [1998], also in the US, the glamour model Terri Welles was permitted to use Playboy’s trade marks Playboy and Playmate in metatags to indicate that she had been a former Playboy Playmate of the year.
In Bihari v Gross [2000], again in the US, the defendant was permitted to use the plaintiff’s mark in its metatags to bring people interested in Bihari to its site where the defendant’s intent was to criticise the plaintiff; ie it was a free speech type case (see the similar ‘Bally Sucks’ case (Bally Total Fitness Holding Corp v Faber [1998]).
In the Canadian case of British Columbia Automobile Association v Office & Professional Employees International Union Local 378 [2001], a trade union was allowed to refer to the claimant in metatags to indicate a strike was to take place at the claimant’s premises.
In the Danish case of Melitta v Coffilter [2001] it was agreed that in principle it is permissible to use a trade mark to indicate that a product is compatible with another.
The American Trans Union case (Trans Union LLC v Credit Research Inc [2001]) the defendant had a contract with the claimant allowing some use of trade marks. Use of the claimant’s trade mark once in the metatags was allowed, given that the defendant offered credit reports from the claimant as a legitimate part of its business.
However, it is possible that overuse, ie repetitive use of a mark many times with the aim of coming higher than the official site in any search engine results, may not be considered merely descriptive use. For example, the American case of Paccar v Telescan Technologies [2000], where the defendant was ordered to remove metatags where it had made repeated use of the relevant trade mark in its wallpaper on the site and in its domain names.
So unfair competitive practices will be stopped but descriptive or other fair use may not.
In the author’s view such cases have struck the right note in finding that a country’s usual trade mark and unfair competition laws should apply to metatag usage, just as it applies to any other kind of usage of a trade mark in the course of trade. The Trade Marks Act 1994 contains various defences such as honest descriptive and own name use that, in the author’s view, should apply to metatag and keyword usage in the UK in the same way as to any other trade mark usage and there is no need for special rules in the context of metatags or keywords.
It may be that manipulation of search engine results by using a competitor’s distinctive trade mark to come above that competitor in any search results will itself constitute passing off or trade mark infringement, but the absence of manipulation should not absolve activities that otherwise constitute passing off or trade mark infringement. By the same token if a defence is available generally, there is no reason why it should not be available in the case of metatag or keyword use.
latest UK case
Much was made of Wilson v Yahoo & ors [2008] but it is in many ways a case on its own facts. The keyword registered with the defendant Yahoo to call forth sponsored link advertisements was the generic term ‘spicy’. As the claimant’s registered trade mark was ‘Mr Spicy’, the court rejected the infringement claim, granting summary judgment to Yahoo, primarily on the grounds that the registered trade mark had not been used.
The judge, Mr Justice Morgan, added fuel to the fire of the ‘no trade mark use’ argument by finding that there was no trade mark use by Yahoo as the search results suggested no connection with the trade mark owner. He said this would have been the case even if the keyword had been the registered trade mark. Such use did not affect the guarantee of the origin of the trade mark.
Although this suggests that claims against advertisers and claims involving identical mark/identical goods or identical or similar marks in relation to dissimilar services where there is an unfair advantage might also fail, strictly speaking these types of claims were not discussed. Nor did the case involve any issues relating to safe harbours afforded to internet service provider (ISPs) that take down material expeditiously, comparative advertising or authorised distribution.
There was no claim of joint infringement or authorisation of the advertiser’s infringement against Yahoo, so we can expect more to come even on the issue of liability of search engines. Such arguments might have been raised if Mr Wilson had been legally represented, but he was not and the case was not fully argued. Inconsistent decisions in European countries with the same trade mark law as the UK were not properly examined.
Finally, Wilson was only a summary judgment case and so is only of persuasive authority. The term registered was generic and the Court found it easy to find in Yahoo’s favour, but courts may look differently at use of a highly distinctive fanciful mark used in relation to counterfeit goods, or use that is so persuasive that it appears to unfairly interfere with the trade mark owner’s use of its own mark.
European References
In the US, France, Germany, the Netherlands and Italy, there are contradictory decisions on the legal position relating to keywords and, as we have seen above, the position in the UK is also murky. To clear up whether or not registration of a competitor’s trade mark as a keyword is trade mark infringement, the French courts have referred three cases to the ECJ involving Google. (Google v Viaticum Luteciel [2008]; Google France and Google Inc v Louis Vuitton Malletier [2008]; and Google v Cnrrh & ors [2008].)
Paraphrasing, the questions ask:
- whether a person providing identical or similar goods to those for which a trade mark is registered can reserve a keyword that reproduces or imitates the trade mark;
- whether a keyword service provider can sell keywords and then in response to those keywords display advertising links to sites offering infringing goods;
- whether, if a trade mark has a reputation, the trade mark owner can oppose such use on the basis that it takes unfair advantage or causes detriment; and
- whether the keyword provider is an ISP and can therefore take advantage of the safe harbour provisions of the E-Commerce Directive if upon notification they take down infringing material expeditiously.
Very recently, Germany, in Bananabay.de v eis.de GmbH [2009], has referred a similar question about the registrant’s position to the ECJ. The mark was used by a competitor as an adword in the field of adult entertainment.
An Austrian court has asked similar questions about the liability of the registrant of keywords (see Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmuller GmbH v Gunter Guni and trekking.at Reisen GmbH [2008]) but also asks if the appearance of the advertisement in a separate block marked as a sponsored link avoids confusion.
The Dutch Supreme Court has referred five questions to the ECJ in a case involving the mark Portakabin (Portakabin Ltd and Portakabin BV v Primakabin BV [2009]), where the use of the mark and variations of the mark as a keyword was in relation to genuine second-hand Portakabin goods. Like the Austrian court, the questions ask whether it makes a difference if the results come up in the ordinary search results or as a sponsored link, but also ask whether it makes a difference if the offer for sale of identical goods appears on the page generated by the search engine or only on the advertiser’s web page accessed through the link.
Relevant to the specific facts of the Portakabin case, the Dutch court also asks, if it is use as a trade mark, whether it is permissible to use the trade mark or variation of the trade mark on the grounds that it is descriptive or trade mark rights have been exhausted bearing in mind the use for genuine second-hand Portakabin goods.
Finally, if it is not use under European trade mark law, the Dutch court asks whether a member state can apply its own national trade mark law if the activity occurs without just cause and takes unfair advantage of or is detrimental to the distinctive character or repute of the relevant mark. (This is an odd question to ask the ECJ as it involves the application of national laws and not European law. It will not be surprising if the ECJ declines to answer this last question.)
Interflora has sued Marks & Spencer and Flowers Direct Online in the UK (Interflora Inc & ors v Marks and Spencer Plc & anor [2009]) for registering the Interflora mark and variations as keywords. The case involves s10(1) and 10(3) (Trademarks Act 1994) infringement, neither of which requires proof of confusion. Against the background of inconsistent European cases and multiple references to the ECJ, a UK court is likely to stay an action and/or ask further questions of the ECJ pending answers to the questions presently posed in the current references.
There have already been hearings in the Google cases before the ECJ and the first non-binding opinion is due in June. It will then probably be about another six months before we see a full judgment.
Many businesses around Europe are waiting to see the results of these cases, which will have an impact on online advertising on a daily basis in a direct and substantial way.
By Dawn Osborne, partner, Rouse.
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