Sponsored Links and Trademark Infringement

Table of Contents

Abstract

Part 1. Introduction

Part 2. Sponsored Links
A. Overview
B. Keyword Advertising

Part 3. Need for Liability
A. Creating a Risk
B. Gaining Profit
C. Legal Certainty
D. Finding a Balance
E. Developing Laws

Part 4. Determination Liability
A. Lack of Harmonization
B. Definitions
1. Direct and indirect Infringement
2. Single and joint Liability
3. Tortfeasor and joint Tortfeasor
4. Activities and Failure to Act
5. Primary and Secondary Liability

Part 5. Primary Liability
A. Initial Considerations
B. Storing Keywords and Displaying Ads
1. Art. 5.1 and 5.2 TMD
1.1. Court’s Decision
1.2. Attribution
1.3. Distinction between Attribution and Causality
1.4. Comparison with other Marketing Concepts
1.5. Interim Conclusion
2. Art. 5.5 TMD
2.1. Background and Scope of Application
2.1.1 Adoption
2.1.2 Scope of Application
2.1.3 Request for a mandatory Provision
2.1.4 Additional Form of Use
2.2. Requirements
2.2.1 Attribution
2.2.2 Structure
2.2.3 Wording
2.2.4 Nature of Actions
2.2.5 Orbiter Dictum of ECJ
2.3. Interim Conclusion
C. Other Actions of ISP
1. Initial Consideration
2. Link between TMD and ECD
2.1. Objectives
2.2. Adoption
2.3. Application
2.3.1 Areas of Law
2.3.2 Attribution
2.3.3 Jurisprudence
2.4. Interim Conclusion
3. Minimum Requirements
3.1. Impact on Selection of Keywords
3.2. Control of Data
3.3. Knowledge
3.4. Interim Conclusion
4. Tortfeasor
4.1. Initial Reflection
4.1.1 No Trademark Use
4.1.2 Gap of Actions
4.2. Sufficient Contribution
4.2.1 Keyword Tool, Training and other Tools
4.2.2 Approval Process
4.2.3 Keyword Trademark Policy
4.2.4 Control of Data
4.2.5 Knowledge
4.3. Interim Conclusion
5. Joint Tortfeasor
5.1. Requirements
5.2. Assessment
6. Interim Conclusion
D. Failure to act
1. Definitions and Distinctions
1.1. First, ongoing and further Infringements
1.2. Stop or prevent Infringements
2. Requirements
3. Obligation to Act
3.1. Proactive and reactive Obligation
3.2. Establishing a legal Obligation
3.2.1 Law
3.2.2 Status, Contract or close Relationship
3.2.3 Prior Acts
3.2.4 Stricter Elements
4. Knowledge of the Infringement
4.1. Degree of Knowledge
4.1.1 Type of Knowledge
4.1.2 Extend of Knowledge
4.2. Moment of actual Knowledge
4.3. Interim Conclusion
5. Possible and reasonable Obligation
5.1. Initial Considerations
5.2. Criteria
5.3. Proactive Obligation
5.3.1 Required Acts
5.3.2 Assessment
5.4. Reactive Obligation
5.4.1 Required Acts
5.4.2 Assessment
5.5. Interim Conclusion
6. Refrain to Act
6.1. Refrain to stop Infringements
6.1.1 Remove Ads and disable Keywords
6.1.2 Refusal to Investigation
6.2. Refrain to prevent further Infringement
E. Conclusion

Part 6. Limitation of Liability
A. Positive Activities
1. Application
2. Keyword Storage
B. Failure to act
1. Application
2. Primary Liability
3. Secondary Liability
C. Conclusion

Part 7. Summary and Comments

II. Abstract

ISP’s legal liability under trademark law with regards to Keyword Advertising is not well developed in literature and jurisdiction. Despite some few judgments in this field, it is obvious that also in other areas of law national courts do mainly focus on ISP’s secondary liability without any clear distinction from primary liability. There seems to be also some hesitation to base a primary liability on a failure to act. For that reasons this paper analyses primary liability of an internet reference provider like Google¹ for Keyword Advertising under Art. 5 EU Trademark Directive taking into account not only positive activities but also a failure to act. Apart from storing Keywords and displaying ads also other contributions of Google like its Keyword Tool and approval process for ads or the ISP’s knowledge of infringements are contemplated. Starting point of the investigation is the recent decision of the ECJ to Google Adwords from 23.3.2010 where the court held that the provider can not be liable for a trademark infringement as the ISP did not use a sign itself in own commercial communication. The author goes beyond this judgment and suggests to apply this new criterion of attribution to all forms of trademark uses within the entire Art. 5 EU Trademark Directive including an omission of the provider. By establishing a link between Ecommerce Directive and Trademark Directive the writer defines the scope of trademark protection and examines some minimum requirements to identify a trademark infringement of the ISP. This is absolutely a new method as no literature exists. As a first main result it was found that Google is not directly engaged in a trademark infringement by its positive actions. By contrast, the research made clear that actual knowledge of ongoing infringements is the core element to establish a primary liability for a failure to stop or prevent trademark infringements and makes the ISP use a trademark itself in its own communication. This paper shall contribute to define a clear distinction between direct and indirect infringements and it also wants to sensitize the reader for the legal importance and consequences of actual knowledge of the ISP.

Keywords: primary liability, secondary liability, Keyword Advertising, Keywords, Adwords, Google, Article 5.5 Trademark Directive, Directive 2008/95/EC, TMD, failure to act, omission, trademark infringement, direct infringement, indirect infringement, attribution, own communication, C-236/08, joint liability, single liability, contributory liability, individual liability, joint tortfeasor, E-Commerce Directive, ECD, Directive 2000/31/EC, Article 14 E-Commerce Directive, Enforcement Directive, EFD, Directive 2004/48/EC, proactive obligation, reactive obligation, obligation to act, reference service provider, willful blindness

IV. Abbreviations

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Part 1. Introduction

With regards to the world’s economy crises it is now more important then before to stabilizes the bottom line of company’s financial structure and acquire new business relations. Increasing the revenue, building up business connections and catching customer’s attention on sold goods and services are the most important aims to be successful on the market. By achieving those goals companies are using different marketing concepts in terms of advertising to explore the world market and to extend their business. Therefore, platforms for advertising provided by different companies which have specialized in the field of online advertising have become an important part of the advertising market. A common method is Sponsored Links. Advertising Companies like Google, Yahoo or MSN² have brought up this new constantly growing industry³. In this context, Keyword Advertising is an interesting area of law in the light of trademark protection and has been very much debated during the last five years. In several new decisions in 2010 the European Court of Justice (ECJ) confirmed very precisely that the advertiser infringes third party’s trademark rights by creating ads in a search engine based on Keywords⁴. The interpretation of EU trademark law in these judgments seems to be accepted and is applied by national courts now⁵ which causes a higher degree of harmonization and legal certainty. By contrast, unclear and still far from being harmonized is the liability of the Internet Service Provider (ISP) whose advertising program is simply used by his advertisers to infringe trademark rights. The ECJ made clear that the ISP is not liable for a trademark infringement under Art. 5.1 and 5.2 Trademark Directive (TMD)⁶ by storing Keywords and displaying ads⁷. Apart from that, the court hasn’t got the opportunity to examine whether Art. 5.5 TMD could have been applied in this specific case. It did also not consider other activities of the ISP being part of its service. Moreover, no word is said with regards to provider’s liability for a failure to act. Therefore, the primary liability of the provider has not been completely clarified yet. When courts determine the liability of ISPs they do not - or not clear enough - distinguish between direct and indirect infringements. It ]is also obvious that national courts are more reluctant to apply a primary liability to intermediaries⁸. In the case of online market operators such as eBay courts focus mainly on secondary liability⁹. The same applies to peer-to-peer providers like for example Grokster¹⁰. Only a few judgments exist where the intermediaries were held directly liable for an infringement¹¹. But even in these cases there is no clear bottom line for distinguishing primary from secondary liability or positive acts from a failure to act. Also the law seems to be outdated as conditions to tackle these issues are vague. However, it should not be argued that contributory liability is the ‘ natural ground ’ for a liability of the ISP as this will always depend on the role the ISP plays and on the legal principles of national law¹². Thus, for a unified application the law and legal principles need to be developed with respect to trademark protection while using ‘Sponsored Links’ in search engines. For these various grounds the author wants to examine in more detail the primary liability of ISPs with regards to Keywords Advertising. After a short insight to Sponsored Links and Keyword Advertising (Part 2) this paper will address the main reasons why there is a need for ISP’s liability (Part 3). In a next step some definitions are given to distinguish primary from secondary liability for the purpose of this paper (Part 4). The main part of this thesis examines primary liability of the ISP beginning with an analysis of ECJ’s judgment¹³ to Google Adwords (Part 5). The result will be used further on to analyze what acts of the ISP constitute a trademark infringement taking into account positive activities and a failure act. The next chapter looks at exemption from a liability (Part. 6). Finally a summary reviews all results found in this research (Part 7).

Part 2. Sponsored Links

A. Overview

Sponsored Links in search engines are means of online advertising. Known ISPs such as Google, Yahoo or MSN create their revenue with them by providing virtual infrastructure and communication network for this kind of marketing. They get paid for the appearance of Sponsored Links in their search engines. Sponsored Links are in general based on a similar business practice of those ISPs and have the same elements in common. The commercials appear on the top or alongside the natural search results¹⁴ in search engines when internet users perform a search¹⁵. If the user clicks on that specific link he will be directed to the advertisers own webpage. The Sponsored Links are labeled as such in the search engine. Google uses the label ‘ads’, Yahoo ‘sponsored results’ and MSN uses ‘sponsored sites’. Sponsored Links contain headline, commercial message and a web link (Ad Text). The content of the ads is created by the advertisers themselves who use programs provided by the ISP.

This thesis will mainly focus on Google¹⁶ as this company was and is part of judicial proceeding in Europe with important decisions of the ECJ which have an impact on Sponsored Link advertising industry.

B. Keyword Advertising

Google’s advertising program is called Adwords. The program works in the background of the Google search engine. Economic operators and companies use this program to display a commercial text message. In the program advertisers can determine and save a list of so called ‘ Keywords ’ which help to trigger their ads when internet users perform a search on Google. Advertisers pay for the appearance of those ads on Google and also for the Keywords. The payment for the Keywords works like an auction.

It happens that trademarks are used in the Ad Text itself or as a Keyword. The latter use is part of the discussion of this thesis. When using a trademark in the Ad Text it will be visible for the user in the search engine. If the Advertiser uses the trademark just as a Keyword and not in the Ad Text then it will not be seen in the Sponsored Link. The trademark is not visible then and, so to speak, being used in the background. The ad in the search engine gets triggered alone by the fact that the search term which was used by the internet user matches the Keywords in the list of the advertiser’s campaign in Adwords.

But nevertheless, Keywords can still become visible in the Ad Text. There is a special and interesting feature of Google called Keyword Insertion ¹⁷. With that feature it is possible to make terms, saved in the Keyword list, visible in the displayed Ad Text. This Keyword Insertion creates a connection between the Ad Text and the Keyword list of the advertiser. Advertisers can create general Ad Text campaigns like ‘Buy {Keyword Insertion} shoes at Ebay’ as headline or commercial message¹⁸. If the internet user would search the term ‘Nike’ a Sponsored Link would appear with ‘Buy Nike shoes at Ebay’ of that specific Ad Text. In this way the Keyword Insertion works like a placeholder for Keywords and gets replaced by that term.

Part 3. Need for Liability

The question, whether the liability of ISPs is needed, must be answered with ‘yes’. The reasons for establishing that liability are a matter of facts and a matter of law which we will consider in this thesis.

A. Creating a Risk

‘We created a monster that’s out of control’¹⁹. This is what should not happen. Whoever creates a monster should also take care of it and should neither be allowed to lean back nor be exempted in that way. Online Advertising is a result of technological development on the internet. ISPs have successfully gained power and economical growth²⁰. That status helps advertising companies to reach consumers in a more efficient way than ever before. But by providing the service the ISP enables also advertiser to infringe other trademark rights. Willful trademark infringement and trademark counterfeiting²¹ through advertisers is a huge problem for proprietors. The ISP knows and controls the whole system and can easily stop infringements. Hence, with providing the advertising service ISPs create and increase the inherent²² risk for trademark infringements²³.

B. Gaining Profit

Moreover, the ISP in its role as a service provider gains profit from Adwords with each addressed Keyword infringing trademark rights²⁴. Without an efficient trademark protection the advertiser could infringe and the ISP would bear no legal consequences. This seems to be wrong.

C. Legal Certainty

Defining liability of the ISP brings also legal certainty for advertisers, ISPs and trademark owners who are facing practical difficulties. Trademark owners can not enforce their rights against unknown advertisers. Advertisers can not promote products if their ads were blocked because of alleged trademark infringement. The ISP has high costs in implementing filter tools and measures to maintain lawful practice and to defend before courts²⁵. Hence, everybody including the ISP should know the boundaries of his rights and the extent of his obligations. The provider should know when he has to cooperate with the trademark owner by means of preventions on own costs, particularly filter software, manual review or notice and take down procedures (NTD procedure).

D. Finding a Balance

Trademark protection ‘ afforded to innovation and investment, it is never absolute. It must always be balanced against other interests [like] freedom of expression and freedom of commerce. … Those freedoms are particularly important in this context because the promotion of innovation and investment also requires competition and open access to ideas, words and signs. … That balance is at the heart of trade mark protection ’ ²⁶ as Adwords ‘ can be used for both good and bad purposes ’ ²⁷.

ISPs are standing between the infringer and the trademark owner. It should not be left to them to force proprietor’s trademark rights. They have no interest and intention to infringe trademark rights. The ISP focuses more on gaining profit through their advertisers. They just want to provide information as much as possible and increase revenue with each additional Keyword.

It is also important to recognize the social, economical and cultural benefit worldwide. Adwords is welcome and not legally forbidden. It benefits the general public, companies and their businesses. Also trademark owners profit from Adwords as they can commercialize their products by reaching a huge group of potential consumers.

Proprietors are generally entitled to claim both advertiser and ISP²⁸. There is no subsidiary²⁹. It is the burden of the trademark owner to ensure protection and not of the ISP³⁰. Thus, the proprietors should focus on the advertiser in the first place. Of course it seems to be much cheaper, faster and more convenient to cut the line than going to the source. But an absolute overall protection should not be sought with the ISP³¹. The provider is not a shortcut or a replacement for regular ways of litigation.

In this context the ISP should be immune or be protected to some extent against proprietor’s lawsuits³². This can facilitate the objective to integrate ISPs in an E-commerce market without internal frontiers ‘ in which the free movements of goods, services and the freedom of establishment are ensured ³³ ’

Thus, interests of ISP, internet user, proprietor and economical society must be weighed and balanced against the liability of the provider³⁴.

E. Developing Laws

Neither EU trademark law nor national law distinguishes between primary or secondary liability³⁵. New criteria have to be developed for that distinction, particularly when defining the term ‘ use ’ of a trademark³⁶. Since the adoption of Art. 14 E-Commerce Directive (ECD)³⁷ and Art. 9 Enforcement Directive (EFD)³⁸ it is clear that the ISP has a duty to act and to cooperate in identifying, stopping and preventing trademark infringement³⁹. Only the conditions for such a liability are unclear and not harmonized.

Part 4. Determination Liability

A. Lack of Harmonization

This paper focuses on the primary liability which must be distinguished from the secondary liability. Those terms are not defined by law neither on national level nor in EU law. A uniform application in countries does not exist. Looking at the legal practice in various MS secondary liability for example has different names. In the UK one will find synonyms like ‘ joint liability ’ , ‘ accessory liability ’ , ‘ joint tortfeasorship ’, or expressions like, ‘ conspiring ’ , ‘ joining in the common design ’ , ‘ acting in concert ’ or ‘ making the primary infringer ’ s act its own ’ whereas in France they talk about ‘ facilitate the infringement ’ ⁴⁰ or in Australia or New Zealand it is a matter of ‘ authorize ’ ⁴¹. Some other countries categorized this liability as ‘ inducement, ’ contributory or vicarious infringement ’ ⁴². Germany focuses mainly on aiding and abetting ⁴³ or on the regime called ‘ Stoererhaftung ’ ⁴⁴ meaning interferer. All these examples show that the distinction between primary and secondary liability and the idea or notion behind this is to some extent noticed in case law of view countries⁴⁵. On the other site some countries do consider those indirect acts simply as primary infringements⁴⁶.

Hence, a few definitions are necessary for this paper to differentiate primary liability from secondary liability.

B. Definitions

1. Direct and indirect Infringement

Direct infringement constitutes an individual liability whereby a direct offender (ISP, advertiser) actually engages ⁴⁷ in the trademark infringement by own means of performance. These means must qualify all legal requirements for a trademark infringement under TMD.

Indirect infringement shall be determined by the fact that the ISP does not directly engage ⁴⁸ in the infringement but would act more in the background and is somehow connected ⁴⁹ with it. The main infringement is committed by another direct infringer - here, the advertiser. The ISP is then a third party. Included are contributing acts to a trademark infringement like inciting, abetting or interfering⁵⁰. Hence, an indirect infringement is characterized by accessoriness from the existence of a main infringement (Accessority).

2. Single and joint Liability

Single liability of the ISP describes his responsibility legally independent from the liability of the advertiser.

Joint liability would occur when the ISP is involved in the trademark infringement of the advertiser. According to the degree of the involvement but also depending on legal practice national courts classify the joint contribution as a direct⁵¹ or indirect infringement⁵².

3. Tortfeasor and joint Tortfeasor

The ISP’s role in this paper shall be qualified as a tortfeasor if being engaged in a direct infringement which establishes his single liability. An ISP who directly contributes to the trademark infringement together with the advertiser shall be a joint tortfeasor within a joint liability.

4. Activities and Failure to Act

These various forms of liabilities can be realized through positive acts (activities) which cause actively a trademark infringement. A different way of infringement would be a refrain to act which leads to an infringement by passivity and establishes a failure to act.

5. Primary and Secondary Liability

Having these prior definitions, also the scope of primary and secondary liability can be determined for this paper.

Primary liability shall be a civil liability of the ISP which is based on direct infringement including tortfeasor or joint tortfeasor.

Secondary liability is subject to all indirect infringements⁵³ of the ISP as third party taking into account any joint contribution without being a tortfeasor or joint tortfeasor.

In this constellation primary and secondary liability of the ISP may be subject to activities and a failure to act.

Another logic point is that both forms of liability exclude each other. An ISP which is already primarily liable shall not be subject to secondary liability for the same act⁵⁴. However, with that distinction the approach for example of some French, Australian or UK courts to establish a primary liability for indirect infringements⁵⁵ is confusing and must be declined.

Part 5. Primary Liability

A. Initial Considerations

In terms of activities the ECJ⁵⁶ had the possibility to take position with regards to the liability for storing Keywords and displaying ads on request of the advertiser under Art. 5.1 and 5.2 TMD. This reasoning shall be analyzed first to look for new criteria. The ECJ did not mention a liability under Art. 5.5 TMD for these specific acts which is the next point to discuss. Moreover, there is a range of other activities of the ISP which might constitute direct infringement under Art. 5 TMD. Finally a failure to act shall be part of the discussion.

B. Storing Keywords and Displaying Ads

1. Art. 5.1 and 5.2 TMD

1.1. Court’s Decision

With regards to a direct infringement of Google as an internet service provider the ECJ analyzed the wording of Art. 5.1 and 5.2 TMD which requires a ‘ using in the course of trade ’ . Answering the referred questions from the French court the ECJ held that the ISP is not involved in a use within the meaning of these provisions. No matter the fact that Google gets paid for its service which constitutes a ‘ commercial activity with a view to economic advantage ’ the provider does not use the trademark sign ‘ itself ’ ⁵⁷ in its ‘ own commercial communication ’ ⁵⁸ when enabling advertisers to select trademark signs as Keywords, creating the technical conditions therefor, accepting and storing of this information or organizing the display of ads on advertiser’s request . Consequently, the ECJ did not investigate all the other requirements such as in relation to goods and services ⁵⁹, adverse effect or likelihood of confusion with respect to the liability of the service provider. This decision was very straight forward and clear. The Advocate General in another pending case has confirmed that decision⁶⁰.

1.2. Attribution

As shown above, the court made very clear that Google has to use the sign itself in its own commercial communication under Art. 5.1 and 5.2 TMD⁶¹. Thus, in terms of provider’s primary liability the ECJ introduced a new criterion which is a form of attribution ⁶². This conclusion is also underpinned by the court’s decision with regards to the exemptions from the liability on information society service provider like Google based on Art. 14 ECD. The ECJ held that it is necessary to examine ‘ what role played by Google in the drafting of the commercial message ’ or in ‘ selection of Keywords ’ and ‘ 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. Furthermore, the court said ‘ where the provider has not played an active role of such a kind as to give it knowledge of, or control over, the data stored … [Google] cannot be held liable for the data which it has stored at the request of an advertiser.’ The application of Art. 14 ECD depends on an attribution of the infringement to the ISP and it is a logic consequence that the service provider can only be liable if he uses the trademark itself. Also under German law the same requirement applies when analyzing the liability of a direct tortfeasor⁶³. According to the degree of contribution and involvement of the infringer German attribution distinguishes between tortfeasor and participator (abettor and inciter) and interferer⁶⁴. While a tortfeasor is a form of primary liability are participators or interferers subject to secondary liability. Acting as a tortfeasor with regards to the primary liability the ISP would have to use the trademark itself ⁶⁵. Also US courts use this element to determine a direct infringement when it says the provider ‘ does not itself sell ’ or ‘ possess the items available on the webpage ’ ‘ instead it facilitates a transaction between two independent parties ’ ⁶⁶. Hence, this element is used to distinguish direct infringements from indirect infringements or primary liability from secondary liability.

1.3. Distinction between Attribution and Causality

For a better understanding a distinction between attribution and causality might be useful and even necessary.

With providing the technology for Keyword Advertising and displaying ads the ISP makes the infringement by the advertiser possible and is connected somehow to the infringement. Without the provided service a trademark violation would not exist. Hence, he sets a causer link in a wide sense.

This does not change the fact that only the advertiser enters a trademark sign in the system. Only he gives the Keyword a name of a trademark and chooses it for some reasons in good or bad faith. The advertiser expresses his will, creativity and uses his knowledge when submitting Keywords to the provider. The Advertiser infringes the trademark right by selection and submission of the Keyword which is the main infringement⁶⁷. The ISP is an intermediary whose service is just ‘ being used by a third party to infringe the rightholder's industrial property right ’ ⁶⁸. Acting in bad faith and selecting a trademark sign intentionally as Keyword could even be considered as an abuse of the provided service. In other words, without the choice of the advertiser a liability of Google will never be an issue. This makes clear that the ISP can not be liable unless he has an impact on that choice, meaning an editorial contribution. But simply storing Keywords which were already selected by the advertiser and displaying ads on request can not affect that selection. Moreover, this shows also that the ISP creates a different risk than the advertiser in terms of that positive act. The advertiser creates a risk to infringe a trademark right. The ISP risks that third parties use its system to infringe trademark rights. The fact that advertiser’s choice is indispensable for an infringement illustrates that the display and infringement is a realization of the risk which the advertiser created. Moreover, the advertiser acts in his own responsibility independent from the ISP. Under these circumstances Google does not use the Trademark sign itself in own communication.

1.4. Comparison with other Marketing Concepts

A comparison with other marketing concepts existing in the real world shall also help to understand the thinking of the ECJ in Google v. Vuitton.

The Relationship between the ISP and its contracting advertisers can be compared for example to the owner of a newspaper that publishes ads of companies⁶⁹. Only these companies are responsible for the content of the ads, particularly for the trademarks they use in it and not the owner of the newspaper. The latter only provides the infrastructure for advertising, categorizes the ads and gets paid for it by the advertisers. He might only give some guidance with regards to the amount of letters, size and layout of the ads, but in general he does not determine the content of the ads and what words are used. Against this background it ‘ would be absurd to argue that, because of such possibilities, newspapers, for example, ought to be prohibited or, at the very least, that their advertising or classified sections ought to be prohibited ’.⁷⁰

Also the management of a shopping center or an o wner of a market ⁷¹ which consists of different small and bigger shops is comparable to an ISP⁷². The management might determine the place of ads to be published, like windows, doors, sanitary objects and walls but it does not design and create the ads.

Moreover, a train station owned, managed and maintained by a city has normally different train companies under contract. Those train companies run their own service and marketing concept without any influence of the city. Another example would be all public transport companies which run ads on and in busses, trains, cars and planes.

All those examples have a managing entity in common that provides the infrastructure, business facilities and communication network for advertising. This entity contracts with different private companies that want to run their own commercial. Those companies do independently advertise their products by using the facilities and premises of the entity. The entity gives only some guidelines and general rules for advertising like places, size and organizes the publication of the company’s ads. It also stores the information at what time, for how long which ads were published and gets paid for it. The consumer would not attribute or link such ads to the managing entity but to the owner of the advertisement. In all these cases it is clear and understood that merely organizing the publication of other’s ads and storing related information would not be considered as a trademark use based on a direct infringement by the entity without any other indications for an attribution.

1.5. Interim Conclusion

The ECJ introduced a new element of attribution when it held that the ISP has to use the sign itself in its own communication to be engaged in a direct trademark infringement. This fact leads to the conclusion that this requirement distinguishes direct infringements from indirect infringement, meaning it determines a primary liability and does not apply to secondary liability. Considering this element there is no space for a primary liability of the ISP as a tortfeasor under Art. 5.1 and 5.2 TMD when just storing Keywords and arranging the display of ads. However, unclear is still whether these specific acts of Google can constitute a liability under Art. 5.5 TMD.

2. Art. 5.5 TMD

According to Art. 5.5 TMD Member States may have provisions for the protection against the use of a sign ‘ other than for the purposes of distinguishing ’ goods or services. Storing Keywords and arranging the display of ads could be a form of other use pursuant that provision.

However, considering the legal background and application of Art. 5.5 TMD and having ECJ’s case law make it difficult to find a basis for an infringement by the ISP under this provision.

2.1. Background and Scope of Application

2.1.1 Adoption

First of all, the European legislator left the implementation of Art. 5.5 TMD to the choice of the MS as it obviously did not affect the internal market⁷³. Without being mandatory most of the Member States have not transferred this provision into national law and a harmonization of that provision has not been taken place⁷⁴.

Art. 5.5 TMD was included at the strong insistence of the Benelux countries according to their practice⁷⁵ and based on their old Art. 13 A2 BTA⁷⁶. During the negotiation process for the European Trademark Directive in 1971 to 1987 other Member States and the European Commission disagreed initially with its incorporation into the directive and the negotiations clashed⁷⁷. For the other MS that Benelux provision went a bit to far beyond the scope of common traditional trademark protection concepts. However a compromise could be reached under Art. 5.5 TMD which saves the broad standard of the Benelux and its trademark doctrine. According to the ECJ it is the Member States that may determine the conditions for a protection against other uses ⁷⁸. The Benelux countries are still the only⁷⁹ Member States that have implemented Art. 5.5 TMD⁸⁰ literally.

Thus, only in those countries Art. 5.5 TMD can be used which already limits the scope of application geographically.

[...]

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¹ Trademark protected term

² Trademark protected terms

³ European Commission, DG Internal Market and Services Unit E2, ‘Study on The Economic Impact of the Electronic Commerce Directive’, Final Report 7/10/2007, page 40

⁴ Joined Cases C-236/08 to C-238/08, Google v. Vuitton, ECR²⁰¹⁰ I-0000; Case

C-278/08, BergSpechte, ²⁰¹⁰ ECR I-0000; Case C-558/08, Portakabin,²⁰¹⁰ ECR I-0000; AG Opinion in C-323 /09, Interflora, 24/03/2011, pending

⁵ German Higher Regional Court Duesseldorf, I-20 W 136/10, 21/12/2010

⁶ Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks (codified version 1989)

⁷ Joined Cases C-236/08 to C-238/08, Google v. Vuitton, ECR²⁰¹⁰ I-0000

⁸ United State Court of Appeals, 354 F.3d 1020 (9th Cir. 2004), Playboy Enterprise v. Netscape Communications, 14/01/2004

⁹ US Southern District Court of New York , No. 04 Civ. 4607 , Tiffany Inc v. eBay, 14/07/2008; German Federal Supreme Court, I ZR 304/01, Internet Auction I, 11/03/2004

¹⁰ Supreme Court of the United States, Metro v. Grokster, No. 04-480, 545 U.S. 913, 125 S.Ct. 2764, U.S., 27/06/2005

¹¹ Song Seagull Haiyan, ‘A comparative copyright analysis of ISP liability in China versus the United States and Europe’, The Computer & Internet Lawyer, July 2010, Vol.27(7), page. 7; Federal Court of Australia, FCA 1242 , Universal Music v. Sharman, 05/09/ 2005, Kazaa P2P; Sophie Stalla-Bourdillon, ‘Should Search Engines Begin to Worry?’, Journal of Internet Law, November 2010, page 3

¹² Sophie Stalla-Bourdillon, ‘Should Search Engines Begin to Worry?’, Journal of Internet Law, November 2010, page 3

¹³ Joined Cases C-236/08 to C-238/08, Google v. Vuitton, ECR[2010] I-0000

¹⁵ Search engines www.google.com, www.yahoo.com, www.msn.com

14 Distinction between natural search results and Sponsored Links results see: Paul Przemysław Polanski,

‘Technical, Automatic and Passive: Liability of Search Engines for Hosting Infringing Content in the Light of the Google ruling’, JICLT - Journal of International Commercial Law and Technology Vol. 6, Issue 1[2011]

¹⁶ all information given about this company were found on the internet page www.google.com

¹⁷ ‘ Keyword insertion is an advanced feature used to dynamically update your ad text with your chosen

Keywords. You insert a special modification tag into your ad text to enable this feature for your ads. Depending on a user's searched keyword, AdWords automatically places your triggered ad group keyword into the ad text. ’ Google Adwords Help, 07/03/2011, ‘Keyword Insertion’,

http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=74992

¹⁸ Google Adwords Help, 07/03/2011, ‘How do I use Keyword Insertion?’, http://adwords.google.com/support/aw/bin/answer.py?hl=en&answer=74996

¹⁹ Alain Strowel, ‘Peer-to-Peer File Sharing and Secondary Liability in Copyright Law’, Edition 2009, page 40

²⁰ Katja Weckström,’Liability for Trademark Infringement for Internet Service Provider’, 01/07/2010, University of Turku Faculty of Law, SSRN Network on Internet, 14/04/2011

²¹ Mark Hachman, ‘Google takes aim at counterfeit Adwords Ads’, 15/05/2011 visit at http://www.pcmag.com/article2/0,2817,2382054,00.asp

²² AG Opinion in joined Cases C-236/08 to C-238/08, Google v. Vuitton, 22/09/2009, para. 119; Andreas

Rühmkorf, ‘Liability of Online Auction Portals: Toward a Uniform Approach?’, Journal of Internet Law, Oct, 2010, Vol.14(4), p.3(8) ;

²³ German Federal Supreme Court (BGH), Kinderhochstuhl Tripp Trapp, 01/02/2011, I ZR 139/08, para. 35 f.

²⁴ AG Opinion in joined Cases C-236/08 to C-238/08, Google v. Vuitton, 22/09/2009, para. 61, 77

²⁵ Katja Weckström,’Liability for Trademark Infringement for Internet Service Provider’, 01/07/2010, University of Turku Faculty of Law, SSRN Network on Internet, 14/04/2011

²⁶ AG Opinion in joined Cases C-236/08 to C-238/08, Google v. Vuitton, 22/09/2009, para. 101-103.

²⁷ Ibid., para. 119

²⁸ Daniel Holznagel, ‘Die Urteile in Tiffany v. Ebay (USA) - zugleich zu aktuellen Problemen der europaeischen Providerhaftung’, GRUR Int 2010, 654, 662

²⁹ German Federal High Court, VI ZR 101/06, Meinungsforum, 27/03/2007

³⁰ US Southern District Court of New York , No. 04 Civ. 4607 , Tiffany Inc v. eBay, 14/07/2008; Daniel Holznagel, ‘Die Urteile in Tiffany v. Ebay (USA) - zugleich zu aktuellen Problemen der europaeischen Providerhaftung’, GRUR Int 2010, 654, 662

³¹ Katja Weckström, ’Liability for Trademark Infringement for Internet Service Provider’, 01/07/2010, University of Turku Faculty of Law, SSRN Network on Internet, 14/04/2011

³² Ibid.

³³ Art. 1.1 ECD, recital 1 of ECD; Katja Weckström, ’Liability for Trademark Infringement for Internet Service Provider’, 01/07/2010, University of Turku Faculty of Law, SSRN Network on Internet, 14/04/2011

³⁴ similar in Katja Weckström, ’Liability for Trademark Infringement for Internet Service Provider’, 01/07/2010, University of Turku Faculty of Law, SSRN Network on Internet, 14/04/2011

³⁵ Ibid.

³⁶ Ibid.

³⁷ Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market ('Directive on electronic commerce'), OJ 2000 L 178/1

³⁸ Corrigendum to Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights (OJ L 157, 30.4.2004)

³⁹ Ibid.

⁴⁰ cited cases in: Anneka Bain, ‘Is it an infringement of trademark law fort he operator of an online marketplace (such as eBay) to allow counterfeit goods to be sold? As a matter of policy, should it be?’, E.I.P.R ²⁰¹¹, 33(3), 162-168; also cases in Alain Strowel, ‘Peer-to-Peer File Sharing and Secondary Liability in Copyright Law’, Edition 2009, page 16 f.

⁴¹ Alain Strowel, ‘Peer-to-Peer File Sharing and Secondary Liability in Copyright Law’, Edition 2009, page 36 f.

⁴² US Southern District Court of New York , No. 04 Civ. 4607 , Tiffany Inc v. eBay, 14/07/2008; Indonesia, ‘IP Komodo Dragon prowls the islands of Indonesia looking for succulent morsels of intellectual property news’, 10/04/2011 visit at http://ipkomododragon.blogspot.com/2011/03/isp-liability.html; Alain Strowel, ‘Peer-to-Peer File Sharing and Secondary Liability in Copyright Law’, Edition 2009, page 14 f.

⁴³ German Federal Supreme Court, I ZR 139/08, Kinderhochstuhl Tripp Trapp, 01/02/2011, para. 30, 31

⁴⁴ AG Opinion in C-324/09, L ’ Oreal SA v. eBay, 09/12/2010, pending, para. 56

⁴⁵ AG Opinion in C-323/09, Interflora, 24/03/2011, pending, para. 54; Supreme Court of the United States, Metro

v. Grokster, No. 04-480, 545 U.S. 913, 125 S.Ct. 2764, U.S., 27/06/2005; UK House of Lords, 1988 WL

624207, CBS Songs v. Amstrad, 12/05/1988; United States Court of Appeals , 955 F.2d 1143, 1148 (7th

Cir.1992), Hard Rock Caf é Licensing Corp. v. Concession Servs., 04/02/1992 ; Sophie Stalla-Bourdillon, ‘Should Search Engines Begin to Worry?’, Journal of Internet Law, November 2010, page 3; United State Court of Appeals, 354 F.3d 1020 (9th Cir. 2004), Playboy Enterprise v. Netscape Communications, 14/01/2004

⁴⁶ Federal Court of Australia, FCA 1242 , Universal Music v. Sharman, 05/09/ 2005, Kazaa P2P; French Tribunal de Grande Instance de Troyes, Hermes v. Ebay, 04/06/2008, 06/06/2011 visit at http://afp.google.com/article/ALeqM5ieVhlM9xNEzcmDtrdw6ToFLtkRAg

⁴⁷ Alain Strowel, ‘Peer-to-Peer File Sharing and Secondary Liability in Copyright Law’, Edition 2009, page 14

⁴⁸ Ibid.

⁴⁹ AG Opinion in joined Cases C-236/08 to C-238/08, Google v. Vuitton, 22/09/2009, para. 47; Alain Strowel, ‘Peer-to-Peer File Sharing and Secondary Liability in Copyright Law’, Edition 2009, page 14

⁵⁰ AG Opinion in joined Cases C-236/08 to C-238/08, Google v. Vuitton, 22/09/2009, para. 119

⁵¹ French Tribunal de Grande Instance de Troyes, Hermes v. Ebay, 04/06/2008, 06/06/2011 at

http://afp.google.com/article/ALeqM5ieVhlM9xNEzcmDtrdw6ToFLtkRAg ; Federal Court of Australia, FCA 1242 , Universal Music v. Sharman, 05/09/ 2005; French Tribunal de Grande Instance de Troyes, Hermes v.

⁵² United States District Court, Case No. 1: 09cv736 (GBL/TCB), Rosetta Stone v. Google Inc, 03/08/2010 Ebay, 04/06/2008, 06/06/2011 visit at

http://afp.google.com/article/ALeqM5ieVhlM9xNEzcmDtrdw6ToFLtkRAg

⁵³ similar in Katja Weckström, ’Liability for Trademark Infringement for Internet Service Provider’, 01/07/2010, University of Turku Faculty of Law, SSRN Network on Internet, 14/04/2011

⁵⁴ Ibid.

⁵⁵ French Tribunal de Grande Instance de Troyes, Hermes v. Ebay, 04/06/2008, 06/06/2011 visit at http://afp.google.com/article/ALeqM5ieVhlM9xNEzcmDtrdw6ToFLtkRAg

⁵⁶ Joined Cases C-236/08 to C-238/08, Google v. Vuitton, ECR 2010 I-0000

⁵⁷ Ibid., para. 55

⁵⁸ Ibid., para. 56; Althaf Marsoof, ‘Keywords Advertising: Issues of Trademark Infringement’, JICLT - Journal of International Commercial Law and Technology Vol. 5, Issue 4 (2010) 240; Sophie Stalla-Bourdillon, ‘Should Search Engines Begin to Worry?’, Journal of Internet Law, November 2010, page 3

⁵⁹ same interpretation by Althaf Marsoof, ‘Keywords Advertising: Issues of Trademark Infringement’, JICLT - Journal of International Commercial Law and Technology Vol. 5, Issue 4 (2010) 240

⁶⁰ AG Opinion in C-323/09, Interflora, 24/03/2011, pending, para. 39

⁶¹ Joined Cases C-236/08 to C-238/08, Google v. Vuitton, ECR I-0000 2010 ; see also: Althaf Marsoof,

‘Keywords Advertising: Issues of Trademark Infringement’, JICLT - Journal of International Commercial Law and Technology Vol. 5, Issue 4 (2010) 240

⁶² This conclusion is underlined by AG Opinion in C-324/09, L ’ Oreal SA v. eBay, 09/12/2010, pending, para. 119

⁶³ German Federal Supreme Court, I ZR 139/08, Kinderhochstuhl Tripp Trapp, 01/02/2011, para. 30, 31

⁶⁴ Ibid., para. 30

⁶⁵ Ibid., para. 30

⁶⁶ US Southern District Court of New York , No. 04 Civ. 4607 , Tiffany Inc v. eBay, 14/07/2008

⁶⁷ Joined Cases C-236/08 to C-238/08, Google v. Vuitton, ECR 2010 I-0000

⁶⁸ Recital 23 and Art. 9, 11 EFD

⁶⁹ German Federal Supreme Court, I ZR 304/01, Internet Auction I, 11/03/2004, para. II.2.bb.2; Ingerl/Rohnke, Markengesetz, 3.Edition 2010, ‘Vorbemerkungen zu §§ 14-19 Ansprüche bei Kennzeichenverletzung (Marken und geschäftliche Bezeichnungen)’, No. 62

⁷⁰ AG Opinion in joined Cases C-236/08 to C-238/08, Google v. Vuitton, 22/09/2009, para. 119 f.

⁷¹ United States Court of Appeals , 955 F.2d 1143, 1148 (7th Cir.1992), Hard Rock Caf é Licensing Corp. v. Concession Servs., 04/02/1992

⁷² AG Opinion in C-324/09, L ’ Oreal SA v. eBay, 09/12/2010, pending, para. 117

⁷³ Henning Bodewig, ‘Nichtmarkenmäßiger Gebrauch und Art. 5 Abs. 5 Markenrichtlinie’, GRUR Int 2008 301

⁷⁴ Case C-23/01, Robelco v. Robeco,2002 ECR I-10913; Max Planck Institute for Intellectual Property and Competition Law, ‘Study on the Overall Functioning of the European Trade Mark System’ , Munich, 15/02/2011, para. 2.152

⁷⁵ Tobias Cohen Jehoram, European Trademark Law, 2. Edition, Nr.8.9, page 320

⁷⁶ The Benelux Trademark Act: after first revision in 1996 Art. 13 A1 BTA, second revision 2005 Art. 2.20 (1) A BCIP (Benelux Convention on Intellectual Property), now Art. 2.20 (1) (d) BCIP

⁷⁷ Alexander Tsoutsanis, ‘The biggest mistake of the European Trademark Directive and why the Benelux is wrong again - between the European Constitution an European conscience’ , E.I.P.R 2006, 28 (2), 74-82

⁷⁸ Case C-23/01, Robelco v. Robeco,2002 ECR I-10913

⁷⁹ Tobias Cohen Jehoram, European Trademark Law, 2. Edition., Nr.8.9, page 320

⁸⁰ now Art. 2.20 (1) (d) BCIP