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Keyword Ads and Trademark Infringement
in 2009
Update on the latest case-law in the US and Europe which could make or break the search engine industry
Alexander Tsoutsanis
Stanford Law School – April 23rd 2009
Topics
Introduction
Keyword Advertising
Overview 2008/2009
Infringement
by Advertisers
by Search Engines
Evaluation
Portakabin v. Primakabin (NL)
Dispute between TM owner and Advertiser: Google not directly involved
2008: Supreme Court refers to ECJ
Extensive questions:
Infringement
Fair use
First sale doctrine
Unfair competition
7 Questions pending before ECJ
1(a) TM Use. Does the use of a third party TM as a keyword for advertising identical products constitute TM use by the advertiser?
1(b) Presentation. Does it make a difference whether the ‘sponsored result’ is displayed in the ‘ordinary list of webpages found’ or ‘in an advertising section identified as such’?
1(c) Actual offer. Does it make a difference whether the identical products are offered in the ‘sponsored result’ or in the linked webpage?
2. Fair use defense. Can an advertiser escape TM infringement by relying on fair use?
3. First sale doctrine. Can an advertiser escape TM infringement by relying on the first sale doctrine?
4.“Typo keywords”. Do the answers to the foregoing questions also apply for keywords in which the trade mark is deliberately reproduced with minor spelling mistakes ?
5. Unfair competition. If there’s no TM use, can a TM owner invoke unfair competition pursuant to § 5-5 of the Directive?
Keyword Advertising: possible TM use
Selling/ suggesting keyword
Purchase of keyword
Display TM in ad on website SE
Display TM on advertiser’s website
Search engine
Advertiser SE / Advertiser
Advertiser +SE?
Overview 08/09: selected key cases EU + US
Europe3 June 08: Google v LouisVuitton (C-
236/08)
Google v Viaticum (C-237/08)
Google v CNRRH (C-238/08)26 June 08: BergSpechte v G. Guni (C-
278/08)17 Dec 08: Portakabin v Primakabin (C-
558/08)22 Jan 09: Bananabay (I ZR 125/07)
Overview 08/09: selected key cases EU + US
United States18 June 08: Finance Express v Nowcom
(C.D.Cal, 07-01225)1 Aug 08: Hysitron v MTS
(D. Minn., 07-01533)27 March 09: Hearts on Fire v Blue Nile
(D. Mass, 08-11053)3 April 09:Rescuecom v Google
(2nd Cir, 06-4881)
Overview (2): relevance re. defendants
Re. infringement by advertisers:
Google v CNRRH
BergSpechte v G. Guni
Portakabin v Primakabin
Bananabay
***
Fin. Express v Nowcom
Hysitron v MTS
Hearts on Fire v Blue Nile
Re. infringement by search engines:
Google v Louis Vuitton
Google v Viaticum
Google v CNRRH
***
Rescuecom v Google
TM Infringement
Three issues:
1. Use in commerce
2.A Likelihood of confusion
2.B Dilution
3. Defenses
(1) Establishing ‘use’
EU US
Use in commerce “for the purpose of distinguishing goods or services”
“in connection with (offering for) sale, distribution or advertising of any goods or services”
Use as a Trademark?
ECJ: no, as long as use affects function(s) of TM
Key: what function?
McCarthy: No
Barrett: Yes
Score-card keywords
BX: mostly - Portakabin
DE: split +/- Bananabay
AT: + Bergspechte
FR: + Google
Trend towards TM use:
Fin. Express v Nowcom
Hysitron v MTS
Hearts on Fire
Rescuecom v Google
(2a) “Likelihood of confusion”
EU US
Basics Identical sign for identical products (!): presumption
Otherwise: evidence, multi-factor test
Indirect confusion is also sufficient
association = factor.
No presumption
Multi-factor test
‘substantial’ evidence
Initial interest Confusion
Less of an issue, because of presumption
Often invoked
Actual Source confusion
Often invoked in case TM is displayed in ad or website
Keyword context
factors:
Presentation; lay-out Evidence ?
Average consumer
(3) Defenses - selection
EU US
Fair use Now pending in Portakabin
“Honest” use
“Necessary to use TM”
Trend: often denied
“Fair” use
First sale Now pending in Portakabin
Can never apply to ‘typo’ keywords.
?
Keyword context
factors:
Use of TM in Ad
Presentation of advertiser’s website
Link to advertiser’s website
Evaluation
Towards ‘sustainable’ (and profitable) keyword advertising
More clear lay-out
Drop “Suggestion Tool” for third party TM’s
Consistent uniform complaint policies
“Towards best practices” ?