Thursday, March 25, 2010

Google Wins on Adwords in ECJ

Google is not in principle breaking EU law by selling AdWords to competitors of those who own associated trade marks in those keywords - official! World's Biggest Search Engine, not facing bankruptcy after all, sighs with relief..

Advertisers who buy AdWords themselves, however, basically receive a stern warning from the ECJ not to try and dupe searchers by buying deceptive adwords and using them in a confusing way in the ads served next to search queries - so expect lots of litigation against fake-goods advertisers, not Google, to follow?

Google itself however also gets a warning that if it had basically drafted the served advert text for the competitor - and so must have known it was essentially part of a deceptive practice - then things might be very different (see para 118 below).

Although IP lawyers will mainly be interested in the findings specifically on trade mark law, this is going long term, I think, to be a more important, indeed crucial decision, on intermediary liability and the ECD, arts 12-15; a clear signal from the ECJ that it is unwilling to let the intermediary status of both search engines and other hosts and conduits such as ISPs be compromised- along with the public interest in a functioning Internet - in the interests of ever more maximal exercise of IP rights.

Particular attention should be paid to this para of the judgment, on Google's liability and immunities under the ECD as a "service provider";

114 Accordingly, in order to establish whether the liability of a referencing service provider may be limited under Article 14 of Directive 2000/31, it is necessary to examine whether 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. "
Thebig question will be if this is taken as merely restating what arts 12-15 already in essence say - no liability without actual or constructive knowledge if host, or at all if mere conduit, or if merely caching - or whether the word "neutral" - not found in the ECD and invented by the AG in his pre-match opinion - imports more-than-statutory qualifications. I guess we will find out when the eBay cases come along.

For these, these paras will also be crucial, and (so excited am I)! I have emboldened the most important parts:

115 With regard to the referencing service at issue in the cases in the main proceedings, it is apparent from the files and from the description in paragraph 23 et seq. of the present judgment 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.
116 It must be pointed out that 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 exemptions from liability provided for in Directive 2000/31.
117 Likewise, concordance between the keyword selected and the search term entered by an internet user is 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.
118 By contrast, in the context of the examination referred to in paragraph 114 of the present judgment, 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 relevant.
119 It is in the light of the foregoing considerations that the national court, which is best placed to be aware of the actual terms on which the service in the cases in the main proceedings is supplied, must assess whether the role thus played by Google corresponds to that described in paragraph 114 of the present judgment.
120 It follows that the answer to the third question in Case C‑236/08, the second question in Case C‑237/08 and the third question in Case C‑238/08 is that Article 14 of Directive 2000/31 must be interpreted as meaning that the rule laid down therein applies to an internet referencing service provider in the case where that service provider has not played an active role of such a kind as to give it knowledge of, or control over, the data stored. If it has not played such a role, that service provider cannot be held liable for the data which it has stored at the request of an advertiser, unless, having obtained knowledge of the unlawful nature of those data or of that advertiser’s activities, it failed to act expeditiously to remove or to disable access to the data concerned."
So:

(1) just getting paid for a service somehow associated with the potential for IP infringement does not seem to automatically remove arts 12-14 protection. eBay will be pleased to hear this one.

(2) liability does however depend on whether the service provider "has not played an active role of such a kind as to give it knowledge of, or control over, the data stored." "Active" = non neutral, it seems? Again this adds a new qualification to what was already in art 14. Does this - or is it meant to - describe (in order it sems to me of descending likelihood) eBay's listing service? You Tube's upload service? Tiscali's provision of access to P2P clients to its subscribers as disputed by SABAM (see below)? We shall see.

If a service is not taking an "active role", all rights holders can ask for is traditional post factum notice and takedown. Art 14 is clearly restated in para 120. If it is.. then filtering and prior monitoring may be legal to ask for, if national law so allows, is the obvious implication. Although of course that too would be mediated by other instruments such as the Data Protection Directive and the ECHR arts 6, 8 and 10, as well as national laws.

I hope eventually to do a fuller analysis (for my views on the AG's opinion which preceded this see here) but in the meantime I'll merely note that this probably points the way forward for the equally important cases on who should be primarily responsible on the Internet for IP protection - the rights holder or the conduit - queuing for the EC - including the cases against eBay from luxury brand holders, as well as the Belgian P2P filtering case of SABAM (which we have just heard is scheduled for 2012!! given the crucial EU importance of this case, which willl in essence determine if 3 strikes legislation is legal in the EU, could it not be fast tracked?). On the other hand there is still (of course) a degree of ambiguity here in what the ECJ has said: in particular, re neutrality in para 114 above.

Anyway from ZedNet, a useful summary:

"In 2003, Vuitton, Viaticum and CNRRH sued Google because their competitors had bought AdWords for trademarks owned by the plaintiffs. In the case of Vuitton, the AdWords sent users to sites selling imitation Louis Vuitton goods, while the trademarks corresponding to Viaticum and Eurochallenges trademarks sent users to competitors' sites.

A French court found in the plaintiffs' favour, ordering Google to stop providing the AdWords in question and pay a fine. The case made its way to the French Court of Cassation — France's highest court for final appeals — which asked the ECJ for its opinion.

The ECJ said on Tuesday that an advertiser purchasing an AdWord that corresponds to someone else's trademark was using that word "in relation to its own goods or services".

However, the ECJ said, trademark holders can take action in national courts against advertisers who "arrange for Google to display ads which make it impossible, or possible only with difficulty, for average internet users to establish from what undertaking the goods or services covered by the ad originate".

The court added that the provider of an automated referencing service such as AdWords cannot be held liable for advertiser data stored on its systems — unless it is made aware that the data is unlawful, in which case it becomes liable if it does not take the data down."

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