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8. Sponsored Ads and Trademark Law - Search University 3

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Sponsored Ads and Trademark Law: Legal Challenges and Opportunities: Benjamin Docquir is a partner lawyer at Simont Braun, which has one of the largest intellectual property practice in Belgium. He will explain the new legal framework around the use of branded/trademarked keywords in Google AdWords. His scope will be to explain this new legal framework, understand the legal risks involved for advertisers as well as give a business view on the opportunities available.

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8. Sponsored Ads and Trademark Law - Search University 3

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  2. 2. Sponsored Ads and Trademark Law: Legal Challenges and Opportunities 14h00 – 14h20
  3. 3. A word of introduction … <ul><li>Independent law firm in Brussels </li></ul><ul><li>Strong practice in Intellectual Property, ICT and Trade Practices Law (5 partners, 13 lawyers) </li></ul><ul><li>Closely monitoring how the evolution of the internet affects intellectual property rights </li></ul><ul><li>Focus on litigation, including ADR methods (arbitration, on-line dispute resolution, mediation, etc.) </li></ul>Benjamin Docquir Avenue Louise 149/20 1050 Bruxelles T +32 2 533 17 71 E [email_address] F +32 2 533 17 94 www.simontbraun.eu
  4. 4. Section 1. The law as it stands today <ul><li>Statutory protection of trademarks </li></ul><ul><li>Rights of the trademark holder </li></ul><ul><li>Functions of the trademark and rationale of the protection </li></ul><ul><li>Exceptions and limitations to trademark rights </li></ul><ul><li>Position of search engines and other intermediaries </li></ul>
  5. 5. 1. Statutory protection of trademarks <ul><li>Directive 2008/95/EC of 22 October 2008 to approximate the laws of the Member States relating to trademarks: articles 5,6 and 7 </li></ul><ul><li>Council regulation n° 2007/2009 of 26 February 2009 on the community trademark: articles 9,12 and13 </li></ul><ul><li>Benelux convention on intellectual property (trademarks & design): articles 2.20 and 2.23 </li></ul>
  6. 6. 2. Rights of the trademark holder <ul><li>Distinction according to the type of registration (Benelux, Community, etc.) </li></ul><ul><li>Distinction between “regular” trademarks and trademarks with a reputation </li></ul><ul><li>Common protection for all trademarks: </li></ul><ul><li>Identical sign + identical goods or services </li></ul><ul><li>Identical or similar sign + identical or similar goods or services + likelihood of confusion on the part of the public </li></ul><ul><li>Extended protection for trademarks with a reputation: identical or similar sign + dissimilar goods or services + usage taking unfair advantage of, or being detrimental to, the distinctive character or the repute of the trademark </li></ul>
  7. 7. 2. Rights of the trademark holder (b) <ul><li>Additional protection under Benelux trademark law: usage of a sign “ for other purposes ” than distinguishing the goods or services, provided that such usage takes unfair advantage of, or is detrimental to the distinctive character or the repute of the trademark </li></ul><ul><li>Examples of prohibited acts: </li></ul><ul><li>affixing the signs to the goods or to the packages </li></ul><ul><li>Offering the goods or putting them on the market </li></ul><ul><li>Importing or exporting the goods under the sign </li></ul><ul><li>Using the sign on business papers and in advertising </li></ul>
  8. 8. 3. Functions of the trademark and rationale of the protection <ul><li>The essential function: the identification of origin </li></ul><ul><li>The quality or guarantee function </li></ul><ul><li>The so-called economic functions of the trademark: communication, investment and advertising </li></ul><ul><li>The protection conferred on the trademark holder depends upon the following conditions: </li></ul><ul><li>Usage without consent </li></ul><ul><li>Usage in the course of trade (as opposed to purely private purpose) </li></ul><ul><li>Usage for goods or services </li></ul><ul><li>Usage that harms or is likely to harm the essential functions of the trademark </li></ul>
  9. 9. 4. Exceptions and limitations to trademark rights <ul><li>Exhaustion of the rights when the goods have been put on the market by the owner or with his consent, unless there are legitimate reasons </li></ul><ul><li>Different types of usage in the course of trade in accordance with honest practices in industrial or commercial matters: </li></ul><ul><ul><li>Indication of name or address </li></ul></ul><ul><ul><li>Indications regarding kind, quality, quantity, intended purpose, value, geographical origin, time or product or other characteristics of goods or services </li></ul></ul><ul><ul><li>Indication of the intended purpose (destination) of a product or service, in particular as accessories or spare parts </li></ul></ul>
  10. 10. 5. Position of search engines and other intermediaries <ul><li>The statutory limitation of liability for some intermediaries (mere conduit, caching and hosting): Directive 2000/31 on electronic commerce and its implementation in the Belgian law of 11 March 2003 </li></ul><ul><li>Tensions created by the new rules on enforcement of intellectual property rights: possibility of obtaining injunctions against intermediaries whose services are used for infringing intellectual property rights </li></ul><ul><li>Example 1: access and content providers, such as Belgacom/Telenet or YouTube, DailyMotion, etc. </li></ul><ul><li>Example 2: search engines </li></ul><ul><li>Example 3: market places </li></ul>
  11. 11. Section 2. The Google case and its implications <ul><li>The outcome of the Google v. Louis Vuitton et al. Litigation </li></ul><ul><li>The Revised Google Adwords Policy </li></ul>
  12. 12. 1. The outcome of the Google v. Louis Vuitton et al. Litigation <ul><li>Mere storage of a keyword and display of advertisements on the basis of that keyword does not amount to usage of a sign under EC trademark law </li></ul><ul><li>An internet referencing service provider is not liable for the data it stores, as long as it does not play an active role of such a kind as to get knowledge of/or control over the data, and it acts expeditiously to remove or disable access to the data after having obtained knowledge of the unlawful nature of such data or/of the advertiser ’s activity </li></ul><ul><li>An advertiser may oppose the use of a keyword by a competitor if the add “ 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 trademark or an undertaking economically connected to its or, on the contrary, originate from a third party ” </li></ul>
  13. 13. 2. The Revised Google Adwords Policy <ul><li>Liberalization of the use of trademarks in adwords: keywords that were restricted as result of a trademark investigation will no longer be restricted </li></ul><ul><li>Google will remove the ad, subject to a complaint by the trademark owner and a limited investigation as to the creation of a likelihood of confusion </li></ul>
  14. 14. Section 3. A new battlefield for advertisers ? <ul><li>Different situations … </li></ul><ul><ul><ul><ul><li>Reseller </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Marketplace </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Competitors </li></ul></ul></ul></ul><ul><li>How to shape (or reshape) campaigns ? </li></ul><ul><ul><ul><ul><li>How to assess whether there is an infringement on the trademark ? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Allocate risks with the advertising or SEO or communication agency </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Mind the terms and conditions of the search engine / marketplace / social networking site </li></ul></ul></ul></ul><ul><li>How to react to a competitor ’ s campaign ? </li></ul><ul><ul><ul><ul><li>General </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Practical steps </li></ul></ul></ul></ul><ul><li>… Unless it turns out to be more complex ! </li></ul>
  15. 15. 1. Different situations <ul><li>Resellers or distributors may to some extent have legitimate grounds if the rights are exhausted </li></ul><ul><li>The liability of market places and of search engines must not be assessed in the same way: </li></ul><ul><ul><ul><li>L ’Oréal vs. Ebay (still pending before the European Court of Justice, but opinion of 9 December 2010) </li></ul></ul></ul><ul><ul><ul><li>Statutory obligation of intermediaries to act expeditiously after having knowledge of trademark infringement </li></ul></ul></ul><ul><li>Between competitors </li></ul>
  16. 16. 2. How to shape or reshape campaigns ? <ul><li>General discussion on the protection of the economic functions of the trademark </li></ul><ul><li>Trademarks (without a reputation): criteria proposed by the ECJ advisor on 24 March 2011: </li></ul><ul><li>Selecting a keyword and displaying the ad on the basis of that keyword amounts to usage of the trademark in relation to goods or services </li></ul><ul><li>Infringement is established if the ad does not enable an average internet user, or enables the latter only with difficulty, to ascertain whether the goods or services referred to in the ad originate from the proprietor of the trademark or an undertaking economically connected to it, or from a third party </li></ul><ul><li>If the sponsored link is liable to lead some members of the public to believe that the competitor is a member of the trademark owners ’ commercial network while it is not </li></ul>
  17. 17. 2. How to shape or reshape campaigns ? (b) <ul><li>Trademarks with a reputation: other criteria proposed by the ECJ ’s adviser </li></ul><ul><li>Both displaying the trademark and displaying an ad based on the trademark may be prohibited </li></ul><ul><li>The trademark is used as a generic term covering a new class or category of goods or services </li></ul><ul><li>The trademark use is an attempt by the advertiser to benefit from its power of attraction, its reputation or its prestige, and to exploit the marketing efforts expended by the proprietor of that mark in order to create and maintain the image of that mark </li></ul>
  18. 18. 2. How to shape or reshape campaigns ? (c) <ul><li>Allocate the risks between advertiser and communication agency </li></ul><ul><ul><ul><li>Professionals own a duty of information </li></ul></ul></ul><ul><ul><ul><li>A written contract is always better </li></ul></ul></ul><ul><li>Terms and conditions of the service providers </li></ul><ul><ul><ul><li>Search engines, marketplaces or social networking sites let you use their services for displaying ads and for marketing purposes </li></ul></ul></ul><ul><ul><ul><li>Mind the terms and conditions as to the liability in respect of usage of trademarks of third parties </li></ul></ul></ul>
  19. 19. 3. How to react to competitor ’ s campaign? <ul><li>General view </li></ul><ul><ul><ul><li>Possibility of a proceeding on the merits in the form of summary proceedings, before the president of the court of commerce </li></ul></ul></ul><ul><ul><ul><li>(Possibility of descriptive seizure) </li></ul></ul></ul><ul><ul><ul><li>Damages ? </li></ul></ul></ul><ul><ul><ul><li>Attorney fees ? </li></ul></ul></ul><ul><li>Practical steps: </li></ul><ul><ul><ul><li>Bailiff ( “ huissier/deurwaarder ”) to write down a description of the process and of the ad </li></ul></ul></ul><ul><ul><ul><li>Cease-and-desist letter </li></ul></ul></ul><ul><ul><ul><li>Set out and disclose the global context to your advisor beforehand ! </li></ul></ul></ul>
  20. 20. 4. When it turns out to be more complex … Benjamin Docquir Avenue Louise 149/20 1050 Bruxelles T +32 2 533 17 71 E [email_address] F +32 2 533 17 94 www.simontbraun.eu
  21. 21. Thank you for your attention !
  22. 22. Sponsored Ads and Trademark Law: Legal Challenges and Opportunities Oral Presentation 14h00 – 14h20
  23. 23. 1. In search of some balance in trademark law… <ul><li>The rights of the trademark holder: </li></ul><ul><ul><ul><ul><ul><li>Absolute protection: identical sign + identical product </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Likelihood of confusion: similar sign + similar product </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Reputation: similar sign + similar or dissimilar product + usage taking unfair advantage of, or being detrimental to, the distinctive character or the repute of the trademark (dilution, tarnishment or free-riding) </li></ul></ul></ul></ul></ul><ul><ul><li>The statutory limitations: </li></ul></ul><ul><ul><ul><ul><ul><li>Exhaustion (products already put on the market) </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Indication of name or address </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Indications regarding kind, quality, quantity, intended purpose, … or other characteristics of goods or services </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Necessary to indicate the intended purpose («  destination/bestemming  ») of a product or service (e.g. spare parts & accessories) </li></ul></ul></ul></ul></ul>
  24. 24. 2. The position of search engines <ul><ul><li>The limited liability of some intermediaries of the internet (e-commerce directive 2000/31) </li></ul></ul><ul><ul><ul><ul><ul><li>Access providing, Caching & Hosting operators have no general obligation of monitoring the data they store </li></ul></ul></ul></ul></ul><ul><li>ECJ, March 23, 2010, joined cases C-236/08, C-237/08, C-238/08, Google France v. Louis Vuitton et al. </li></ul><ul><li>Mere storage of a keyword and display of advertisements on the basis of that keyword does not amount to usage of a sign under trademark law </li></ul><ul><li>An internet referencing service provider is not liable for the data it stores, as long as it does not play an active role of such a kind as to get knowledge of/or control over the data, and it acts expeditiously to remove or disable access to the data after having obtained knowledge of the unlawful nature of such data or/of the advertiser ’s activity. </li></ul>
  25. 25. 2. The position of search engines (b) <ul><li>Google ’ s change in policy: </li></ul><ul><li>Liberalization of the use of trademarks in adwords: keywords that were restricted as result of a trademark investigation will no longer be restricted; </li></ul><ul><li>Google will remove the ad, subject to a complaint by the trademark owner and a limited investigation as to the creation of a likelihood of confusion; </li></ul><ul><li>… opening the battlefield for advertisers ? </li></ul>
  26. 26. <ul><li>An advertiser may oppose the use of a keyword (identical sign + identical product) by a competitor if either: </li></ul><ul><ul><ul><li>the ad suggests the existence of an economic link between the undertaking of the competitor and of the trademark holder, or is so vague on the origin of goods that normally informed user are unable to determine whether the advertiser is a third party or is linked to the trademark proprietor, or </li></ul></ul></ul><ul><ul><ul><li>The sponsored link is liable to lead the public to believe that the competitor is a member of the trademark holder ’s commercial network while it is not (even though the ad itself does not display the trademark) ( o pinion A.G., March 24, 2011, C-323/09, Interflora v. Marks & Spencer ) ; </li></ul></ul></ul><ul><li>When the ad mentions or displays the trademark, there may, in addition, be harm to the reputation of the trademark (according to opinion A.G. in Interflora ) if either : </li></ul><ul><ul><ul><li>The trademark is used as a generic term covering a class or category of goods or services </li></ul></ul></ul><ul><ul><ul><li>Or the advertiser attemps to benefit from its power of attraction, its reputation or its prestige, and to exploit the marketing effort expended by the trademark holder in order to create and maintain the image of that mark. </li></ul></ul></ul><ul><ul><li>Need to reconcile with prior case-law in more « traditional » cases… </li></ul></ul>3. The position of advertisers
  27. 27. <ul><li>Rules on comparative advertising </li></ul><ul><ul><ul><ul><li>Directive 2006/114 of Dec. 12, 2006, art. 4 d), f) et g) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>ECJ, June 12, 2008, O2 , C-533/06 (price comparison using a sign similar to the competitor ’ s trademark) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>CJUE, 18 juin 2009, L ’ Oréal v. Bellure , C-487/07 (imitation of perfumes and comparison lists with the originals and the « matching » perfumes) </li></ul></ul></ul></ul><ul><li>Rules on comparative advertising prevail: </li></ul><ul><ul><ul><ul><li>The use of a sign in comparative adverstising amounts to « usage in relation with goods in the course of trade » under trademark law </li></ul></ul></ul></ul><ul><ul><ul><ul><li>But, if all conditions on comparative advertising are complied with, the trademark holder is not entitled to prohibit the use of that sign </li></ul></ul></ul></ul><ul><li>Caveat (1): likelihood of confusion </li></ul><ul><ul><ul><ul><li>Same notion in trademark law and comparative advertising law: risk that the consumer believes that the products come from the same undertaking or economically linked undertakings </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Comparative advertising will be prohibited if it creates such a likelihood of confusion </li></ul></ul></ul></ul>3. The position of advertisers (b)
  28. 28. <ul><li>Caveat (2): protection of the other functions of trademarks: </li></ul><ul><ul><ul><li>Comparative advertising will also be prohibited when it takes « unfair advantage » of the reputation of the trademark or is detrimental thereto </li></ul></ul></ul><ul><ul><ul><li> Even if it is not misleading to consumers as to the origin of the products (i.e. even when it is clear that the products do not come from the same undertaking) </li></ul></ul></ul><ul><ul><ul><li>Provided that it affects the other functions of the trademark: </li></ul></ul></ul><ul><ul><ul><li> E.g. weakening the distinctiveness of the trademark (dilution), reducing of the power of attraction of the trademark or the products (tarnishment), or taking unfair advantage of the prestige and the investments made by the trademark proprietor (free-riding) </li></ul></ul></ul><ul><ul><ul><li>« Identical sign + identical product » may also affect these functions, if the use of the sign is not purely descriptive … </li></ul></ul></ul><ul><ul><ul><li>Taking into account all circumtances of the case : </li></ul></ul></ul><ul><ul><ul><ul><li>The trademark ’ s strength or reputation </li></ul></ul></ul></ul><ul><ul><ul><ul><li>The degree of similarity of the signs and of the products </li></ul></ul></ul></ul><ul><ul><ul><ul><li>The intention to take unfair advantage of the repute of a trademark without any personal investment </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Etc. </li></ul></ul></ul></ul>3. The position of advertisers (c)
  29. 29. 4. In a nutshell … <ul><li>The protection conferred on the trademark holder depends upon the following conditions: </li></ul><ul><li>Usage without consent </li></ul><ul><li>Usage in the course of trade (as opposed to purely private purpose) </li></ul><ul><li>Usage for goods or services </li></ul><ul><li>Usage that harms or is likely to harm the essential functions of the trademark (identification of origin, guarantee of quality, communication, investment and advertising) </li></ul>
  30. 30. 4. In a nutshell … (b) <ul><ul><li>When the ad does not display/mention the trademark: </li></ul></ul><ul><ul><ul><li>If it creates a likelihood of confusion, the mere selection of a keyword might be prohibited (though the ad does not display the competitor ’ s mark) </li></ul></ul></ul><ul><ul><ul><li>In most cases, the internet user may perceive the sponsored links as offering alternative, wihout confusing the origin of the products </li></ul></ul></ul><ul><ul><ul><li>But in some circumstances, the meaning of the trademark, a.o., may result in a likelihood of confusion </li></ul></ul></ul><ul><ul><ul><li>… It remains to be seen if merely selecting a keyword identical to a trademark, will be thought of as an infringement to the other functions of the trademark (A.G. ’ s last opinion is skeptical in respect of most practical situations) </li></ul></ul></ul><ul><li>When the ad does display/mention the trademark: </li></ul><ul><ul><ul><li>Absolute protection (identical sign + identical product) </li></ul></ul></ul><ul><ul><ul><li>Likelihood of confusion </li></ul></ul></ul><ul><ul><ul><li>Attempt to other functions </li></ul></ul></ul><ul><ul><ul><li>Comparative advertising </li></ul></ul></ul>
  31. 31. 5. Examples… <ul><li>Pres. Comm. Court, Brussels, Feb. 3, 2011 </li></ul><ul><ul><ul><li>Use of « VOO » as keyword by a reseller of Belgacom products </li></ul></ul></ul><ul><ul><ul><li>With mentions « VOO ou Belgacom TV Gratuit » and « Pack Internet et TV » as links, without any further reference to VOO in the text of the ad </li></ul></ul></ul><ul><ul><ul><li>No infringement of the advertising function of the trademark </li></ul></ul></ul><ul><ul><ul><li>Consumers are well aware of the fierce competition between telco’s and cable companies and could not be misled as to the origin of the product </li></ul></ul></ul><ul><ul><ul><li>Appeal is pending … </li></ul></ul></ul><ul><ul><li>Pres. Comm. Court, Brussels, Jan. 12, 2011 </li></ul></ul><ul><ul><ul><li>Use of « brainbox » as keyword by Selfmatic </li></ul></ul></ul><ul><ul><ul><li>Ads display « Brainbox www.selfmatic.be Epargnez sur la main d’œuvre, faites le vous-même et épargnez » </li></ul></ul></ul><ul><ul><ul><li>Infringement of both the indication of origin and the advertising function of the trademark </li></ul></ul></ul>
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  36. 38. 6. How to react to competitor ’ s campaign? <ul><li>General view </li></ul><ul><ul><ul><li>Possibility of a proceeding on the merits in the form of summary proceedings, before the president of the court of commerce </li></ul></ul></ul><ul><ul><ul><li>(Possibility of descriptive seizure) </li></ul></ul></ul><ul><ul><ul><li>Damages ? </li></ul></ul></ul><ul><ul><ul><li>Attorney fees ? </li></ul></ul></ul><ul><li>Practical steps: </li></ul><ul><ul><ul><li>Bailiff ( “ huissier/deurwaarder ”) to write down a precise and relevant description of the process and of the ad </li></ul></ul></ul><ul><ul><ul><li>The burden of proof lies on the shoulders of the complainant ! </li></ul></ul></ul><ul><ul><ul><li>Cease-and-desist letter </li></ul></ul></ul><ul><ul><ul><li>Set out and disclose the global context to your advisor beforehand ! </li></ul></ul></ul>
  37. 39. Thank you for your attention !

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