Google win in French LV AdWords case?

That’s the way the Times describes it, which I found somewhat surprising.  I’ll have to read the opinion, but it sounds like the ruling provides Google with something like a DMTA-ish notice-and-takedown regime without absolving those who purchase trademarked terms from direct liability.  I’d welcome any insights by those more familiar with the French ECJ proceedings.

Update: This version of events sounds more grim for Google — actually, it sounds like it was written by LVMH.  The full ruling can be found here.

Update 2: Okay, so now having read the ECJ ruling, I’m pretty sure this is not a win for Google — more below the fold…

Problem one for Google’s position is the current conception of trademark law in the ECJ.  The ECJ’s Arsenal ruling extended infringement liability to cases involving defendant use that impairs trademark value, even in the absence of consumer confusion over source.  Sir Hugh Laddie once fought valiantly for common sense trademark law in that case, but the ECJ’s expanded notions of trademark rights won the day.  The end result is that keyword advertising, in the ECJ’s view, is not simply about protecting consumers against confusion, but about protecting something more like a property right.  (In U.S. law, this translates to dilution or initial interest infringement.)

Paragraph 99 of the ECJ decision holds that direct competitors purchasing paid placement ad links can be enjoined “in the case where that ad does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party.”

The burden here feels backward to me.  According to the ECJ, use of a competitor’s keyword for advertising purposes is allowable only when the competitor uses the mark in a way that dispels the possibility of users believing the advertisement is associated with the trademark owner.  (Note that we’re talking about advertising and a hyperlink here, not an actual sale.)

The dilution-like character of the ECJ standard is made more clear in paragraph 102:

The Court has already held.. that, where a third party attempts, through the use of a sign which is identical with, or similar to, a reputable mark, to ride on the coat-tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of its own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark, the advantage resulting from such use must be considered to be an advantage that has been unfairly taken of the distinctive character or the repute of that mark.

So this does look to me like an invitation to trademark lawsuits over AdWords, and it looks like trademark owners have pretty good chances of winning some of those lawsuits, based on the infringement standard.

While the ruling doesn’t pin direct liability on Google for its own “use” of trademarked keywords, it also does not allow Google (at this point) to escape secondary liability under any of the statutory safe harbors.  Instead, we get a standard from paragraph 114 that the French court will apply to Google on remand:

[T]o 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.

So, presumably, once knowledge is established by notice, a take-down is required.  This is a “win” insofar as it allows Google to have the benefit of the same harbor, but only if it qualifies for that safe harbor by acting in a role that is “merely technical, automatic, and passive” with a “lack of knowledge or control of the data.”  Is that the case with AdWords?

All in all, I’d say, certainly not a win for Google, even if Google spins it that way. (And just to be clear about my own opinions, I think Google should win in the final analysis.)

Hmm — looks like the Times has changed their headline!  Well, at least FT is still claiming victory for Google.

Update 3: Here’s Eric Goldman’s take, which is basically congruent.  Interesting to note that Tech Crunch was also apparently faked out by the conflicting press releases about the ruling, as was Search Engine Land.  Regarding the strange language in the English version of the ruling, I think that’s attributable to the fact that all of these ECJ rulings are translated into many languages.  The result of ECJ multi-lingualism isn’t as bad as GoogleTube’s auto-captioning, but there are certain issues.