mercredi, juin 23, 2010

United Kingdom: Unlocking keyword disputes?

Unlocking keyword disputes?

Contributed by Reynolds Porter Chamberlain LLP


Summary

Those who thought that the decision by the European Court of Justice (ECJ) in Louis Vuitton v Google,(1) as interpreted in Die BergSpechte v Günter,(2) had resolved the trademark infringement issues of AdWord or keyword advertising will be disappointed by the High Court's recent consideration of the issues. This consideration took place in the long-running battle between Interflora and Marks & Spencer over the latter's purchase of 'Interflora' as a Google AdWord.

The ECJ had asked the High Court to confirm whether it wanted to maintain its reference in the Interflora AdWords dispute and, if so, to clarify the questions being referred. Interflora argued that there was no need to maintain the reference, since the Louis Vuitton decision was sufficient to enable the court to deal with the current case. However, the High Court accepted Marks & Spencer's submission that further guidance was needed on the scope of the exclusive rights of the trademark proprietor insofar as they are protected under Articles 5(1)(a) and 5(2) of the EU Trademarks Directive (2008/95/EC). The judge also clarified that in relation to Article 5(2), the High Court was asking the ECJ to provide guidance on the circumstances in which advertisers using keywords that are identical to well-known marks can be said to be diluting or 'free riding' on those marks.

Facts

Interflora sued Marks & Spencer for trademark infringement in relation to Marks & Spencer's purchase of Google AdWords that were identical to its UK and Community trademark registrations of INTERFLORA.

Interflora ran two cases, arguing first that Marks & Spencer was a primary infringer (as purchaser and user of the Interflora keyword), and second that Marks & Spencer was a joint tortfeasor with Google (which was not sued) by virtue of agreeing with Google to use the keyword 'Interflora'. In a judgment of May 22 2009 the High Court referred 10 questions to the ECJ on whether the sale and purchase of keywords that are identical to third-party trademarks constitute 'use' within the meaning of Articles 5(1)(a) and 5(2) and the equivalent provisions under the Community Trademark Regulation (40/94).

Decision

As a result of the ruling in Louis Vuitton, the High Court and the parties accepted that much of the existing reference fell away. It was clear from Louis Vuitton that a search engine operator selling keywords to advertisers of similar goods or services to the goods or services of the trademark proprietor for these purposes is not using a sign in the course of trade. Therefore, there could be no primary liability on Google's part for trademark infringement in the present case. It followed that Marks & Spencer could not be jointly liable with Google for the latter's trademark infringement. Therefore, the questions relating to that issue should be withdrawn.

However, the judge agreed with Marks & Spencer that further clarification was needed on (i) the activities of the advertiser that could constitute 'use' within Articles 5(1)(a) and 5(2), and (ii) the scope of protection for the trademark proprietor under those provisions - specifically, the scope of the exclusive rights of the trademark proprietor. The reference would be maintained insofar as it sought guidance on these issues.

In answer to the ECJ's request for clarification, Justice Arnold confirmed that the surviving reference sought to establish the circumstances in which an advertiser that uses a keyword which is identical to a competitor's well-known trademark must be regarded as acting in a manner detrimental to the distinctive character of that mark (ie, dilution) or as taking unfair advantage of the distinctive character or repute of that trademark (ie, free riding).

Comment

Significantly, the High Court emphasized the European Commission's observation in the present reference. The commission considers that Article 5(1)(a) is restricted to use which affects or is liable to affect the essential function of the trademark (ie, that of indicating origin), and that use which affects or is liable to affect only other functions (eg, the advertising function) may be prohibited only under Article 5(2). The court wanted those observations aired before the ECJ. However, in Louis Vuitton the ECJ proceeded on the basis that Article 5(1)(a) is not restricted in this way. It then decided that the non-essential advertising function was not affected by competitors buying trademarks as keywords. Furthermore, in L'Oréal v Bellure(3) the ECJ has already held that an effect on any of the functions of the trademark, not just the origin function, is sufficient to sustain a claim under Article 5(1)(a).

The commission has apparently suggested that the ECJ reconsider that judgment - a suggestion made, perhaps, more in hope than expectation. The ECJ's invitation in Louis Vuitton to national courts to resolve keyword trademark disputes on a case-by-case basis was bound to generate further references.

For further information on this topic please contact David Cran or Paul Joseph at Reynolds Porter Chamberlain LLP by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email (david.cran@rpc.co.uk or paul.joseph@rpc.co.uk).

Endnotes

(1) Joined cases C-236/08 and C-238/08.

(2) Case 278/08.

(3) Case C-487/07