EU’s Google verdict may not quash complaints

LEWIS SILKIN

FOR most businesses, it is vital that prospective customers can find them on the internet. And the “ranking” that a business can achieve in search engine results – how high up it is on a search page – is a big part of that.

Recognising this, a number of years ago search engines developed “sponsored results,” which allowed advertisers to bid on keywords that the advertiser anticipated its potential customers would type into the search engine. So a computer retailer might bid for its ad to appear at the top of the page when somebody searches for “laptops”, for example.

This is a lucrative business for search engines. Google’s keyword programme, AdWords, was responsible for 97 per cent of its $23bn revenues in 2009.

But the use and sale of keywords has been far from plain sailing. Brand owners have frequently complained to the search engines that their brands have been hijacked by competitors. There has been nothing preventing you buying your competitor’s name as a keyword, and then putting your ad at the top of the page.

The stand-off between the search engine companies and the brand owners was uneasy. While the search engines were prepared to put in place policies which prevented advertisers using registered trade marks, they were not prepared to prevent advertisers bidding on keywords, even if they were registered trade marks. Some brand owners were unhappy with this. Not only were they losing customers, but they were also being drawn into an expensive bidding war for control of their own brands in search engine results.

There were various court actions, often with differing outcomes, which ultimately led to a number of cases being referred to the European Court of Justice. The ECJ gave judgment earlier this year in one case, Louis Vuitton v Google, which concerned the lawfulness of the sale and use of keywords, and last month in Portakabin v Primakabin, which also covered the use of a keyword by a reseller.

The result is that the sale of keywords consisting of third party trade marks by Google was not an infringement. However, the use of a keyword in conjunction with misleading advert text could be an infringement on the part of the advertiser. A refusal by Google to remove an infringing advertisement could incur liability for Google.

Google has since announced that it is changing its AdWord trade mark policy from 14 September. The new regime will, in certain circumstances, allow advertisers for the first time in the UK to use third party trade marks in advertisements that appear on Google’s search results. They will also allow trade mark owners to demand that Google investigate and, where appropriate, take down advertisements which are misleading.

Google has been keen to spin these changes as a good thing for users of its AdWords programme, saying in the new policy that “Google’s goal is to provide our users with the most relevant information... and we believe that users benefit from having more choice”. This change in policy clearly shows Google taking a backward step from its previous approach, where its position was that no use of third party trade marks as keywords in the AdWords programme was objectionable.

The result of all this is that in the short term at least, brand owners may now have more to complain about. It is up to them to monitor search engine listings, and complain to Google where appropriate. There seems great scope for further disagreement between brand owners and Google over whether the use of third party trade marks both as keywords and in the text of the sponsored result is misleading. It will be interesting to see whether this leads to more misleading advertising or less.