Trying to Make Sense of Internet Keyword Policies

Recent court decisions around the world have attempted to make sense of the conditions under which advertising service providers can sell 'keywords' to third parties. While the courts aim was to clarify the legal framework, they have also created some controversy among brand owners. Christopher Coulter and Deirdre Moynihan, of Morrison & Foerster, analyse recent 'adword' evolutions, with particular focus on the EU.

'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'1.

The tension between keywords and trade mark owner rights

As is now well-known, some online keyword advertising service providers sell certain words to advertisers ('keywords'). Generally, these keywords prompt the display of a 'sponsored link' or sponsored advertisement when the words are typed into a search engine. In this way, advertisers can enhance traffic flow to their goods and services, and advertising service providers and search engines can derive advertising revenues. So, for example, in Google's Adwords service, a 'sponsored link' is displayed when the keyword is typed into Google's search box. The sponsored link is accompanied by a short message promoting the advertiser's business. A number of advertisers can reserve the same keyword and if a number of advertisers have reserved the same keyword, the order in which the sponsored links are displayed is determined according to the maximum price per click, the number of previous clicks on those sponsored links and the quality of the ad as assessed by Google2.

However, it is also possible for a keyword to be the subject of a registered trade mark. Pursuant to the Trade Marks Directive3, a trade mark owner is granted exclusive rights in the registered trade mark.

This means that the owner can prevent third parties from using, without the trade mark owner's consent, in the course of trade:

any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered; and any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public. Confusion includes the likelihood of association between the sign and the trade mark4 Perhaps inevitably therefore, the courts in a number of EU jurisdictions have been called upon to consider the liability of service providers which provide online keyword advertising services5.

Questions centred on the liability of the online keyword...