Google France SARL and Google Inc. v Louis Vuitton Malletier SA (C-236/08), Google France SARL v Viaticum SA and Luteciel SARL (C-237/08) and Google France SARL v Centre national de recherche en relations humaines (CNRRH) SARL and Others (C-238/08).
Date: 2010-03-23
48. Following that examination, it will be appropriate to answer the second question in Case C‑236/08, by which the Court is asked to examine the same problem from the angle of Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94, which concern the rights conferred by reputable trade marks. Subject to verification by the Cour de cassation, it appears from the reference for a preliminary ruling that the legislation applicable in France includes the rule referred to in Article 5(2) of Directive 89/104. Furthermore, the Court has stated that that provision of the directive must be interpreted not solely on the basis of its wording, but also in the light of the overall scheme and objectives of the system of which it is a part. Accordingly, the rule referred to in Article 5(2) of Directive 89/104 concerns not only situations in which a third party uses a sign identical with, or similar to, a sign which has a reputation for goods or services which are not similar to those for which that trade mark is registered, but also situations in which such use is made for goods or services which are identical with, or similar to, those for which that trade mark is registered (Case C‑292/00 Davidoff  [2003] ECR I‑389, paragraphs 24 to 30, and Case C‑102/07 adidas and adidas Benelux  [2008] ECR I‑2439, paragraph 37).
2. The interpretation of Article 5(1)(a) of Directive 89/104 and Article 9(1)(a) of Regulation No 40/94
49. By application of Article 5(1)(a) of Directive 89/104 or, in the case of Community trade marks, of Article 9(1)(a) of Regulation No 40/94, the proprietor of a trade mark is entitled to prohibit a third party from using, without the proprietor’s consent, a sign identical with that trade mark when that use is in the course of trade, is in relation to goods or services which are identical with, or similar to, those for which that trade mark is registered, and affects, or is liable to affect, the functions of the trade mark (see, inter alia, Case C‑17/06 Céline  [2007] ECR I‑7041, paragraph 16; order in Case C‑62/08 UDV North America  [2009] ECR I‑0000, paragraph 42; and Case C‑487/07 L’Oréal and Others  [2009] ECR I‑0000, paragraph 58).
a) Use in the course of trade
50. The use of a sign identical with a trade mark constitutes use in the course of trade where it occurs in the context of commercial activity with a view to economic advantage and not as a private matter (Case C‑206/01 Arsenal Football Club  [2002] ECR I‑10273, paragraph 40; Céline , paragraph 17; and UDV North America , paragraph 44).
51. With regard, firstly, to the advertiser purchasing the referencing service and choosing as a keyword a sign identical with another’s trade mark, it must be held that that advertiser is using that sign within the meaning of that case-law.
52. From the advertiser’s point of view, the selection of a keyword identical with a trade mark has the object and effect of displaying an advertising link to the site on which he offers his goods or services for sale. Since the sign selected as a keyword is the means used to trigger that ad display, it cannot be disputed that the advertiser indeed uses it in the context of commercial activity and not as a private matter.
55. Although it is clear from those factors that the referencing service provider operates ‘in the course of trade’ when it permits advertisers to select, as keywords, signs identical with trade marks, stores those signs and displays its clients’ ads on the basis thereof, it does not follow, however, from those factors that that service provider itself ‘uses’ those signs within the terms of Article 5 of Directive 89/104 and Article 9 of Regulation No 40/94.
56. In that regard, suffice it to note that the use, by a third party, of a sign identical with, or similar to, the proprietor’s trade mark implies, at the very least, that that third party uses the sign in its own commercial communication. A referencing service provider allows its clients to use signs which are identical with, or similar to, trade marks, without itself using those signs.
57. That conclusion is not called into question by the fact that that service provider is paid by its clients for the use of those signs. The fact of creating the technical conditions necessary for the use of a sign and being paid for that service does not mean that the party offering the service itself uses the sign. To the extent to which it has permitted its client to make such a use of the sign, its role must, as necessary, be examined from the angle of rules of law other than Article 5 of Directive 89/104 and Article 9 of Regulation No 40/94, such as those referred to in paragraph 107 of the present judgment.
58. It follows from the foregoing that a referencing service provider is not involved in use in the course of trade within the meaning of the abovementioned provisions of Directive 89/104 and of Regulation No 40/94.
60. The expression ‘in relation to goods or services’ identical with those for which the trade mark is registered, which features in Article 5(1)(a) of Directive 89/104 and Article 9(1)(a) of Regulation No 40/94, relates, in principle, to goods or services of third parties who use a sign identical with the mark (see Case C‑48/05 Adam Opel  [2007] ECR I‑1017, paragraphs 28 and 29, and Case C‑533/06 O2 Holdings and O2 (UK)  [2008] ECR I‑4231, paragraph 34). As appropriate, it can also refer to goods or services of another person on whose behalf the third party is acting (order in UDV North America , paragraphs 43 to 51).
61. As the Court has already held, the types of conduct listed in Article 5(3) of Directive 89/104 and Article 9(2) of Regulation No 40/94, namely, the affixing of a sign identical to the trade mark onto goods and the offering of the goods, the importing or exporting of the goods under the sign and the use of the sign on business papers and in advertising, constitute use in relation to the goods or services (see Arsenal Football Club , paragraph 41, and Adam Opel , paragraph 20).
65. In this connection, it should be borne in mind that Article 5(3) of Directive 89/104 and Article 9(2) of Regulation No 40/94 provide only a non-exhaustive list of the kinds of use which the proprietor may prohibit ( Arsenal Football Club , paragraph 38; Case C‑228/03 Gillette Company and Gillette Group Finland  [2005] ECR I‑2337, paragraph 28; and Adam Opel , paragraph 16). Accordingly, the fact that the sign used by the third party for advertising purposes does not appear in the ad itself cannot of itself mean that that use falls outside the concept of ‘[use] … in relation to goods or services’ within the terms of Article 5 of Directive 89/104.
67. In the case of the referencing service, it is common ground that the advertiser, having chosen as a keyword a sign identical with another person’s trade mark, intends that internet users who enter that word as a search term should click not only on the links displayed which come from the proprietor of the trade mark, but also on the advertising link of that advertiser.
68. It is also clear that in most cases an internet user entering the name of a trade mark as a search term is looking for information or offers on the goods or services covered by that trade mark. Accordingly, when advertising links to sites offering goods or services of competitors of the proprietor of that mark are displayed beside or above the natural results of the search, the internet user may, if he does not immediately disregard those links as being irrelevant and does not confuse them with those of the proprietor of the mark, perceive those advertising links as offering an alternative to the goods or services of the trade mark proprietor.
69. In that situation, characterised by the fact that a sign identical with a trade mark is selected as a keyword by a competitor of the proprietor of the mark with the aim of offering internet users an alternative to the goods or services of that proprietor, there is a use of that sign in relation to the goods or services of that competitor.
70. It must be borne in mind, in that regard, that the Court has already held that the use by an advertiser, in a comparative advertisement, of a sign identical with, or similar to, the mark of a competitor for the purposes of identifying the goods and services offered by the latter and to compare its own goods or services therewith, is use ‘in relation to goods or services’ for the purposes of Article 5(1) of Directive 89/104 (see O2 Holdings and O2 (UK) , paragraphs 35, 36 and 42, and L’Oréal and Others , paragraphs 52 and 53).
71. Without its being necessary to examine whether or not advertising on the internet on the basis of keywords which are identical with competitors’ trade marks constitutes a form of comparative advertising, it is clear in any event that, as has been held in the case-law cited in the preceding paragraph, the use made by the advertiser of a sign identical with the trade mark of a competitor in order that internet users become aware not only of the goods or services offered by that competitor but also of those of the advertiser constitutes a use in relation to the goods or services of that advertiser.
72. In addition, even in cases in which the advertiser does not seek, by its use, as a keyword, of a sign identical with the trade mark, to present its goods or services to internet users as an alternative to the goods or services of the proprietor of the trade mark but, on the contrary, seeks to mislead internet users as to the origin of its goods or services by making them believe that they originate from the proprietor of the trade mark or from an undertaking economically connected to it, there is use ‘in relation to goods or services’. As the Court has previously held, such use exists in any event where the third party uses the sign identical with the trade mark in such a way that a link is established between that sign and the goods marketed or the services provided by the third party ( Céline , paragraph 23, and order in UDV North America , paragraph 47).
73. It follows from all of the foregoing that use by an advertiser of a sign identical with a trade mark as a keyword in the context of an internet referencing service falls within the concept of use ‘in relation to goods or services’ within the meaning of Article 5(1)(a) of Directive 89/104.
75. The exclusive right under Article 5(1)(a) of Directive 89/104 and Article 9(1)(a) of Regulation No 40/94 was conferred in order to enable the trade mark proprietor to protect his specific interests as proprietor, that is, to ensure that the trade mark can fulfil its function. The exercise of that right must therefore be reserved to cases in which a third party’s use of the sign affects or is liable to affect the functions of the trade mark (see, inter alia, Arsenal Football Club , paragraph 51; Adam Opel , paragraphs 21 and 22; and L’Oréal and Others , paragraph 58).
76. It follows from that case-law that the proprietor of the mark cannot oppose the use of a sign identical with the mark if that use is not liable to cause detriment to any of the functions of that mark ( Arsenal Football Club , paragraph 54, and L’Oréal and Others , paragraph 60).
77. Those functions include not only the essential function of the trade mark, which is to guarantee to consumers the origin of the goods or services (‘the function of indicating origin’), but also its other functions, in particular that of guaranteeing the quality of the goods or services in question and those of communication, investment or advertising ( L’Oréal and Others , paragraph 58).
78. The protection conferred by Article 5(1)(a) of Directive 89/104 and Article 9(1)(a) of Regulation No 40/94 is, in this regard, more extensive than that provided for in the respective paragraphs (1)(b) of those articles, the application of which requires that there be a likelihood of confusion (see, to that effect, Davidoff , paragraph 28, and L’Oréal and Others , paragraph 59).
79. It is apparent from the case-law cited above that in the situation envisaged in Article 5(1)(a) of Directive 89/104 and Article 9(1)(a) of Regulation No 40/94, in which a third party uses a sign identical with a trade mark in relation to goods or services which are identical with those for which that mark is registered, the proprietor of the mark is entitled to prohibit that use if it is liable to have an adverse effect on one of the functions of the mark, whether that be the function of indicating origin or one of the other functions.
81. In the present context, the relevant functions to be examined are the function of indicating origin and the function of advertising.
i) Adverse effect on the function of indicating origin
82. The essential function of a trade mark is to guarantee the identity of the origin of the marked goods or service to the consumer or end user by enabling him to distinguish the goods or service from others which have another origin (see, to that effect, Case C-39/97 Canon  [1998] ECR I‑5507, paragraph 28, and Case C‑120/04 Medion  [2005] ECR I‑8551, paragraph 23).
83. The question whether that function of the trade mark is adversely affected when internet users are shown, on the basis of a keyword identical with a mark, a third party’s ad, such as that of a competitor of the proprietor of that mark, depends in particular on the manner in which that ad is presented.
84. The function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party (see, to that effect, Céline , paragraph 27 and the case-law cited).
85. In such a situation, which is, moreover, characterised by the fact that the ad in question appears immediately after entry of the trade mark as a search term by the internet user concerned and is displayed at a point when the trade mark is, in its capacity as a search term, also displayed on the screen, the internet user may err as to the origin of the goods or services in question. In those circumstances, the use by the third party of the sign identical with the mark as a keyword triggering the display of that ad is liable to create the impression that there is a material link in the course of trade between the goods or services in question and the proprietor of the trade mark (see, by way of analogy, Arsenal Football Club , paragraph 56, and Case C‑245/02 Anheuser-Busch  [2004] ECR I-10989, paragraph 60).
86. Still with regard to adverse effect on the function of indicating origin, it is worthwhile noting that the need for transparency in the display of advertisements on the internet is emphasised in the European Union legislation on electronic commerce. Having regard to the interests of fair trading and consumer protection, referred to in recital 29 in the preamble to Directive 2000/31, Article 6 of that directive lays down the rule that the natural or legal person on whose behalf a commercial communication which is part of an information society service is made must be clearly identifiable.
88. It is for the national court to assess, on a case-by-case basis, whether the facts of the dispute before it indicate adverse effects, or a risk thereof, on the function of indicating origin as described in paragraph 84 of the present judgment.
89. In the case where a third party’s ad suggests that there is an economic link between that third party and the proprietor of the trade mark, the conclusion must be that there is an adverse effect on the function of indicating origin.
90. In the case where the ad, while not suggesting the existence of an economic link, is vague to such an extent on the origin of the goods or services at issue that normally informed and reasonably attentive internet users are unable to determine, on the basis of the advertising link and the commercial message attached thereto, whether the advertiser is a third party vis-à-vis the proprietor of the trade mark or, on the contrary, economically linked to that proprietor, the conclusion must also be that there is an adverse effect on that function of the trade mark.
ii) Adverse effect on the advertising function
91. Since the course of trade provides a varied offer of goods and services, the proprietor of a trade mark may have not only the objective of indicating, by means of that mark, the origin of its goods or services, but also that of using its mark for advertising purposes designed to inform and persuade consumers.
92. Accordingly, the proprietor of a trade mark is entitled to prohibit a third party from using, without the proprietor’s consent, a sign identical with its trade mark in relation to goods or services which are identical with those for which that trade mark is registered, in the case where that use adversely affects the proprietor’s use of its mark as a factor in sales promotion or as an instrument of commercial strategy.
94. Having regard to the important position which internet advertising occupies in trade and commerce, it is plausible that the proprietor of a trade mark may register its own trade mark as a keyword with a referencing service provider in order to have an ad appear under the heading ‘sponsored links’. Where that is the case, the proprietor of the mark must, as necessary, agree to pay a higher price per click than certain other economic operators if it wishes to ensure that its ad appears before those of those operators which have also selected its mark as a keyword. Furthermore, even if the proprietor of the mark is prepared to pay a higher price per click than that offered by third parties which have also selected that trade mark, the proprietor cannot be certain that its ad will appear before those of those third parties, given that other factors are also taken into account in determining the order in which the ads are displayed.
96. In accordance with the Cour de cassation’s own findings, the situation covered in the questions referred is that of the display of advertising links following the entry by internet users of a search term corresponding to the trade mark selected as a keyword. It is also common ground, in these cases, that those advertising links are displayed beside or above the list of the natural results of the search. Finally, it is not in dispute that the order in which the natural results are set out results from the relevance of the respective sites to the search term entered by the internet user and that the search engine operator does not claim any remuneration for displaying those results.
97. It follows from those factors that, when internet users enter the name of a trade mark as a search term, the home and advertising page of the proprietor of that mark will appear in the list of the natural results, usually in one of the highest positions on that list. That display, which is, moreover, free of charge, means that the visibility to internet users of the goods or services of the proprietor of the trade mark is guaranteed, irrespective of whether or not that proprietor is successful in also securing the display, in one of the highest positions, of an ad under the heading ‘sponsored links’.
98. Having regard to those facts, it must be concluded that use of a sign identical with another person’s trade mark in a referencing service such as that at issue in the cases in the main proceedings is not liable to have an adverse effect on the advertising function of the trade mark.
d) Conclusion
99. In the light of the foregoing, the answer to the first question in Case C‑236/08, the first question in Case C‑237/08 and the first and second questions in Case C‑238/08 is that:
– Article 5(1)(a) of Directive 89/104 and Article 9(1)(a) of Regulation No 40/94 must be interpreted as meaning that the proprietor of a trade mark is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with that trade mark which that advertiser has, without the consent of the proprietor, selected in connection with an internet referencing service, goods or services identical with those for which that mark is registered, in the case where that ad 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 trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party;
– an internet referencing service provider which stores, as a keyword, a sign identical with a trade mark and organises the display of ads on the basis of that keyword does not use that sign within the meaning of Article 5(1) of Directive 89/104 or of Article 9(1)(a) and (b) of Regulation No 40/94.
3. The interpretation of Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94
102. The Court has already held, in the case of offers of imitations for sale, that, where a third party attempts, through the use of a sign which is identical with, or similar to, a reputable mark, to ride on the coat-tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of its own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark, the advantage resulting from such use must be considered to be an advantage that has been unfairly taken of the distinctive character or the repute of that mark ( L’Oréal and Others , paragraph 49).
103. That case-law is relevant in cases where advertisers on the internet offer for sale, through the use of signs identical with reputable trade marks such as ‘Louis Vuitton’ or ‘Vuitton’, goods which are imitations of the goods of the proprietor of those marks.
107. Section 4 of Directive 2000/31, comprising Articles 12 to 15 and entitled ‘Liability of intermediary service providers’, seeks to restrict the situations in which intermediary service providers may be held liable pursuant to the applicable national law. It is therefore in the context of that national law that the conditions under which such liability arises must be sought, it being understood, however, that, by virtue of Section 4 of that directive, certain situations cannot give rise to liability on the part of intermediary service providers. Since the expiry of the period within which that directive had to be transposed, the rules of national law on the liability of such service providers must include the restrictions set out in those articles.
110. As has been stated in paragraphs 14 and 15 of the present judgment, the legislature defined the concept of ‘information society service’ as covering services which are provided at a distance, by means of electronic equipment for the processing and storage of data, at the individual request of a recipient of services, and normally in return for remuneration. Regard being had to the characteristics, summarised in paragraph 23 of this judgment, of the referencing service at issue in the cases in the main proceedings, the conclusion must be that that service features all of the elements of that definition.
112. In order for the storage by a referencing service provider to come within the scope of Article 14 of Directive 2000/31, it is further necessary that the conduct of that service provider should be limited to that of an ‘intermediary service provider’ within the meaning intended by the legislature in the context of Section 4 of that directive.
113. In that regard, it follows from recital 42 in the preamble to Directive 2000/31 that the exemptions from liability established in that directive cover only cases in which the activity of the information society service provider is ‘of a mere technical, au tomatic and passive nature’, which implies that that service provider ‘has neither knowledge of nor control over the information which is transmitted or stored’.
114. Accordingly, in order to establish whether the liability of a referencing service provider may be limited under Article 14 of Directive 2000/31, it is necessary to examine 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.
116. It must be pointed out that the mere facts that the referencing service is subject to payment, that Google sets the payment terms or that it provides general information to its clients cannot have the effect of depriving Google of the exemptions from liability provided for in Directive 2000/31.
118. By contrast, in the context of the examination referred to in paragraph 114 of the present judgment, the role played by Google in the drafting of the commercial message which accompanies the advertising link or in the establishment or selection of keywords is relevant.
120. It follows that the answer to the third question in Case C‑236/08, the second question in Case C‑237/08 and the third question in Case C‑238/08 is that Article 14 of Directive 2000/31 must be interpreted as meaning that the rule laid down therein applies to an internet referencing service provider in the case where that service provider has not played an active role of such a kind as to give it knowledge of, or control over, the data stored. 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.
IV – Costs