Googles sponsored links infringe trade marks

13 November 2003

Isabelle Leroux

In Luteciel v Google France, the Nanterre Court of First Instance has held that the use of trade marked terms through Google's AdWords program amounted to trade mark infringement.

Online travel agents Luteciel and Viaticum operate the websites Bourse des vols ('flights market') and Bourse des voyages ('travel market'), for which they own registered trade marks. Upon discovering that Google had sold the use of the words 'vols' ('flights') and 'voyages' ('travel') to competitors such as easyJet through the AdWords program, they brought a trade mark infringement action.

Google's AdWords program allows individuals and companies to place advertisements (i.e. sponsored links) related to specific keywords on the Google home page. The broad match system used by Google displays all the results matching at least one of the words in a search query. As a consequence, links sponsored by online travel agents other than Luteciel and Viaticum appeared on the search results page each time a search query included these words, even when the trademarks BOURSE DES VOLS or BOURSE DES VOYAGES were specifically entered as a search query.

The Nanterre Court of First Instance held that Google was liable for trade mark infringement pursuant to article L713-2 of the French Intellectual Property Code. This provision prohibits "the reproduction, use or affixing of a mark, even with the addition of words such as: 'formula', 'manner', 'system', 'imitation', 'type', 'method', or the use of a reproduced mark for goods or services that are identical to those designated in the registration", unless authorised by the owner.

The court rejected Google's argument that the words 'bourse' (market) and 'vol' (flight) are commonly-used terms and thus the marks lacked distinctiveness. The court noted that both trade marks were protected because they were validly registered in France at the National Intellectual Property Institute.

The court also dismissed Google's argument that it was technically impossible to prevent competitors' sponsored links appearing when the trade marked words are entered in the search query. Google explained that the broad match system cannot distinguish between a query based on the term 'vol' and another query based on the phrase 'bourse des vols'. The court (i) held that this alleged technical limitation was not established, and (ii) noted that Google has an "interest in the broad match system, which allows the display of the maximum number of advertisements and increases the chances of attracting a potential client on to the advertiser's site [...] thereby increasing the company's revenue".

Lastly, the court held that Google's "commercial strategy could not infringe on legitimately protected rights". Accordingly, the court required Google to pay €70,000 in damages and ordered it to remove the disputed sponsored links. Although Google is expected to appeal the court's decision, it must for now comply with the judgment.

It is worth noting that prior to litigation, and unlike similar search engines such as Espotting and Overture, Google had rejected Luteciel's and Viaticum's requests to prevent competitors' advertisements appearing when a search was made for their trade marks. In August 2003 Google accepted without any litigation a similar trade mark protection request in the United States from eBay.

First published in World eBusiness Law Report on 13 November 2003.