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Trademark Licensing in Keyword Advertising by Maciej Zejda*

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Trademark Licensing in Keyword Advertising by Maciej Zejda* Maciej Zejda Trademark Licensing in Keyword Advertising by Maciej Zejda* Abstract: This article examines the use of in the case of the double-identity rule. Thirdly, the trademarks as keywords in sponsored links cam- article discusses the negative aspects of broaden- paigns - in particular the impact of such usage on ing the concept of taking advantage and isolates this consumer confusion. It is thus important to highlight concept from the possibilities of confusion, detriment that there are a number of reasons why a consumer to the distinctive character, or the reputation of the uses search engines. For example, it may be that a trademark. Lastly, the article proposes possible rem- consumer searches for a type of product or service edies to the current situation – in particular the intro- that appeals to them; the consumer may engage in duction of licensing models for the use of trademarks comparison-shopping; or the consumer may already in keyword advertising and the application of the law know the specific brand that he or she intends to on comparative advertising regarding the way the li- purchase. Secondly, this article explores the possibil- censee uses those trademarks. ity of infringement on other functions of trademarks Keywords: Trademark; Keyword Advertising; Licensing; Sponsored Links Campaigns © 2016 Maciej Zejda Everybody may disseminate this article by electronic means and make it available for download under the terms and conditions of the Digital Peer Publishing Licence (DPPL). A copy of the license text may be obtained at http://nbn-resolving. de/urn:nbn:de:0009-dppl-v3-en8. Recommended citation: Maciej Zejda, Trademark Licensing in Keyword Advertising, 7 (2016) JIPITEC 18, para 1. A. Introduction which also takes up the most space on the website are links to websites, which are “natural” results of the search, i.e. websites indexed by web browsers as 1 Internet advertising can lead to a number of complex the most closely connected with the keyword (the problems related to trademark infringements, in so-called “organic” results). The order in which particular concerning consumer confusion. The aim links are displayed is subject to complex algorithms, of this paper is to analyse the view taken by the Court which takes into account a number of factors; of Justice of the European Union (CJEU) regarding in particular the number of views and amount of the likelihood of consumers’ confusion in respect of websites referring to specific keyword. The more online advertising campaigns. The paper additionally frequently the website is visited, the higher it will discusses the negative consequences of broadening be displayed within the organic results of the search, the concept of taking unfair advantage and separation thus it would mimic an Internet user’s natural search of this concept from likelihood of confusion or a behaviour.1 It is worth noting that usually web likelihood of detriment to the distinctive character browsers strictly protect the structure of algorithms or the reputation of the trademark. Finally, it focuses and modify them to prevent the algorithm from on the possibility of introducing licensing models, potential manipulations by advertisers. It should which would potentially strike the right balance also be emphasised that advertisers have no legal between conflicting interests of the trademark way to affect the order of the organic results of the holders, advertisers and consumers. search.2 2 Everyone who uses search engines knows that after 1 Tan A. 2010. Google Adwords: Trademark infringer or trade typing a particular word the web browser engine liberalizer, 16 Mich. Telecomm. & Tech. L. rev., p. 477. displays two types of results. The first of them, 2 Dupont J.S. 2013. Uncharted territories of trade mark use, 1 18 2016 Trademark Licensing in Keyword Advertising 3 The other results displayed by web browsers’ goods when there exists a likelihood of confusion on engines are those which are generated by paid the part of the public, which in particular includes search services. Despite the fact that nearly every the likelihood of association between the sign and search engine has such a service, this article will the trademark. Secondly, art. 10(2)(c) allows the refer only to the Google AdWords service as the proprietor of the registered trademark to prevent key example of contextual advertising.3 Links all third parties who have not obtained consent displayed in Google AdWords are displayed above from using in the course of trade any sign which organic results or next to them and are distinctly is identical with, or similar to, the trademark in marked as “Ad”, “Sponsored” or “Sponsored links”. relation to goods or services which are not similar to The advertiser may choose between a variety of those for which the trademark is registered, where formats – most commonly advertisements show the latter has a reputation in the Member State and text consisting of descriptive sentences, a link to where use of that sign without due cause takes unfair the advertiser’s website, and the website’s URL advantage of, or is detrimental to, the distinctive address. The order of sponsored links is determined character or the repute of the trademark. by: keywords chosen by advertiser; the amount the advertiser is willing to pay for every “click” on the 5 Despite strict limitations on the protection of link to his or her webpage; and the number of views trademarks included in art. 10(2)(a) and art. 10(2) of an advertisement.4 More than one advertiser (b) of the TMD, the CJEU pointed to the functions may reserve particular keywords. This enables the of the trademark when determining the scope and creation of “sponsored links campaigns”, which limits of trademark protection.6 However, unlike allow displaying links to the advertiser’s webpage the statutory limitations, these functions, which are in positions visible for web users regardless of described as “functional equivalent to limitations”,7 webpage position in organic search results. The are not mentioned or defined in the Directive. revenue generated by the sponsored ads makes up Instead they should be “conceptualized as being a large part of Google’s revenues. Most importantly, inherent to the exclusive right and have to be carved the advertisers may also choose words, which are out by case law”.8 registered trademarks as keywords, consequently leading to potential trademark litigations. 6 By virtue of art. 10(2)(a) and (b) of the TMD, trademark owners are given control over communication concerning their marks, which B. Legal Framework of covers the identification and distinction of the goods Trademarks’ Protection or services offered in the marketplace. Consequently, protection afforded under art. 10(2)(a) and 10(2)(b) is to be granted only if use of a conflicting sign is likely 4 The protection of trademarks afforded by5 the to cause confusion to the consumers. In case of the Directive 2015/2436 of the European Parliament double identity rule (when an identical sign is used and of the Council of 16 December 2015 (hereinafter for identical product) embodied in art. 10(2)(a), the referred to as “TMD”) is twofold. Firstly, art. 10(2) risk of confusion may be deemed so obvious that it (a) states, that the proprietor of a trademark may can be presumed. Nevertheless, as highlighted in prevent other parties from using this mark without Senftelben,9 existence of such a factual presumption his or her consent when the third party uses a sign should not encourage the court to deviate from the identical to the trademark in relation to the goods general requirement of evidence that the likelihood or services which are identical with those for which of confusion may arise from the use at issue. As it has the trademark was registered. Additionally, art. 10(2) turned out in case law of the CJEU, the fact that the (b) entitles the owner of a trademark to restrain a third party merely used a registered trademark does third party from using an identical or similar sign not necessarily lead to consumers’ confusion. This to the trademark in relation to identical or similar occurred in the Arsenal case,10 where the defendant Intellectual Property Quarterly. pp. 139-165. 6 CJEU, Arsenal Football Club plc v. Matthew Reed (2002) Case C-206/01; CJEU, L’Oreal SA v. Bellure NV (2009) Case 3 Strzelecki M. 2012. Reklama kontekstowa w wyszukiwark- C-487/07. ach internetowych w orzecznictwie Trybunału Sprawiedli- wości Unii Europejskiej - wybrane zagadnienia. In: Namys- 7 Ramsey L. P. and Schovsbo J. 2013. Mechanisms for limiting łowska Monika ed. 2012. Reklama. Aspekty prawne, Warsaw, trade mark rights to further competition and free speech. Wolters Kluwer S.A. pp. 485 – 503. International Review of Intellectual Property and Competition Law. Volume 44. pp. 671-700. 4 information available at: https://www.google.pl/adwords/ how-it-works/, https://support.google.com/adwords/an- 8 Ibid. swer/2497836?hl=pl. 9 Senftleben M. 2011. Keyword advertising in Europe 5 Directive 2008/95/EC of The European Parliament and of - How the internet challenges recent expansion of the Council of 22 October 2008 to approximate the laws EU trade mark protection. Connecticut Journal of International of the Member States relating to trade marks, OJ L 299, Law. Volume 27. p. 42. 8.11.2008, pp. 25–33. 10 CJEU, Arsenal Football Club plc v. Matthew Reed (2002) Case 1 19 2016 Maciej Zejda offered identical goods to those of the trademark 8 Finally, the CJEU established that: holder using a mark, which was identical to the registered trademark of the claimant. Nevertheless, where the ad, while not suggesting the existence of an the defendant displayed signs which informed clients economic link, is vague to such an extent on the origin of that its products were unofficial.
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