Tuesday, September 22, 2009

Google 1: Luxury Brands 0!

Pangloss is pretty bushed after the excellent SCL Policy Forum (thanks to co-chairs Chris Reed, Judith Rauhofer, and gracious hosts Herbert Smith) but just has to bring this breaking news; the Advocate General's opinion has come out (via Joris Hoboken), in the hotly awaited ECJ reference in Luxury Brands plc (OK, see real parties below) vs Google, on whether Google is liable for trademark infringement as a result of its keyword based "AdWords" service. The meat of the opinion is that Google is not liable for selling keywords to advertisers which correspond to trade marks owned by others, since the use of the TM, such as it is, is restricted to the relationship between Google and the advertiser, and is not aimed "outwards" at the user, thus not causing customer confusion.

TM lawyers will have plenty to say on that part but for Pangloss, the real excitement is what this says about search engines as immune or liable intermediaries under the EC Electronic Commerce Directive. The AG opinion (available in full now, since I started writing!) is not binding on the court but often predicts the likely result :

Advocate General’s Opinion in Joined Cases C-236/08, C-237/08 and C-238/08
Google France & Google Inc. v Louis Vuitton Malletier, Google France v Viaticum & Luteciel and Google France v CNRRH, Pierre-Alexis Thonet, Bruno Raboin & Tiger, franchisée Unicis

"..Mr. Poiares Maduro also rejects the notion that Google's actual or potential contribution to a trade mark infringement by a third party should constitute an infringement in itself. He opines that instead of being able to prevent, through trade mark protection, any possible use – including many lawful and even desirable uses –, trade mark owners would have to point to specific instances giving rise to Google’s liability in the context of illegal damage to their trade marks. [bold added]

In this context, the Advocate General finds that both Google's search engine and AdWords constitute information society services. He adds that service providers seeking to benefit from a liability exemption under the E-Commerce Directive should remain neutral as regards the information they carry or host.[bold added]

However, whilst the search engine is a neutral information vehicle applying objective criteria in order to generate the most relevant sites to the keywords entered, that is not the case with Adwords where Google has a direct pecuniary interest in internet users clicking on the ads' links.

Accordingly, the liability exemption for hosts provided for in the E-Commerce Directive should not apply to the content featured in AdWords."

Pangloss Sez: Wow that is interesting. So, it seems we have a clear and defiant rejection of the content industry-lead idea that IP holders can command online intermediaries - or just search engines? - to undertake prior blanket filtering to prevent alleged infringement of their rights. The context of AdWords is very different from that of Viacom v YouTube (for example) of course, but does this point to how we may see an upcoming ECJ reference panning out on liability of web 2.0 sites, like eBay, and in particular, whether they can be compelled by the likes of LVM to proactively filter out content, rather than run, as now, on a post factum notice and take down paradigm? See discusion of conflicting cases in US, Continental Europe and recently England on this controversial point, here.

On the other hand we also have a clear steer from the AG that where ISSPs like Google make money out of their "neutral" activities in hosting or linking to content by monetising them via connected advertising, they remain ISSPs but nonetheless become fair game for liability, and are no longer "neutral intermediaries". Would this mean that YouTube, who perhaps occasionally host IP infringing user generated content :-) and monetise this hosting via ads, could be commandedby a court to filter proactively, as opposed to simply wait for NTD; while, par contraire, eBay, who also sometimes host infringing content, but make their money from unconnected user commissions, not ads, would not be so susceptible and could continue to depend on expedient NTD to retain immunity?

Oh this is going to be fun :-)

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