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European IP Bulletin, Issue 33, July 2006 - Trade Marks

TRADEMARKS

9. Louis Vuitton Defeats Google in France

Louis Vuitton Malletier is the owner of two French trademarks, “Louis Vuitton” and “LV” and of one community trademark, “Vuitton”, all used to commercialise, substantially, leather products.

Google Inc. used to provide its customers with two advertising services, one called Premium Sponsorship Advertising and the other called ADWORDS. The first system allowed customers to buy some keywords which, if contained in a search carried out with Google’s search engine, would make some ads appear on top of Google search results. ADWORDS is a similar system based on cost-per-click (CPC) pricing, with dynamic placement at the side of Google search results. The customer can set a maximum CPC and only pay when a customer clicks on his advertisement. 

Louis Vuitton, in 2003, found out that “Google.com” and “Google.fr” search engines made adverts for the unofficial websites of merchants selling counterfeit Vuitton goods appear, as Google suggested the trademarks in question as keywords for third parties’ ads. Louis Vuitton, therefore, decided to sue Google and its French subsidiary for alleged trademark counterfeiting, unfair competition and misleading advertising.

Google claimed that its advertising system was completely automatic and therefore the choices made by the customers were unknown and that in the search results there was no mention as to any possible linkage among the websites of third parties selling counterfeit goods and the one legitimately owned by Louis Vuitton.

On 4 February 2005 the Paris District Court found that:

• Google used to help its customers find the most suitable keywords for their adverts through a keywords generator and if the word Vuitton was inserted in the system suggested keywords such as “Louis Vuitton replicas” or “Imitations Louis Vuitton” appeared
• Google, through its advertising systems and selling the contested keywords to its customers, facilitated the promotion of counterfeit Vuitton products
• Google offered advertising services which, for the aforementioned reasons, could be deemed as misleading advertising since the services were offered upon consideration.

In light of the above findings, the Paris District Court ruled against Google and its French subsidiary, restraining them from suggesting through their advertising systems the contested trademarks as keywords and charged them for trademark counterfeiting, unfair competition and misleading advertising. Google was also ordered to pay damages for € 200,000.

Google appealed the decision of the District Court and on 28 June 2006 the Paris Court of Appeals, in SARL Google, Sté Google Inc c/ SA Louis Vuitton Malletier, upheld the lower court decision, raising the amount due by Google to € 300,000 plus € 60,000 for legal expenses and ordered Google to publish at its own expense details of the judgement in four news magazines.

Subsequently, Google stated that the decision has little relevance to its advertising policy. Since 2003 Google has barred internet advertisers from buying search listings under registered trademarks held by others and banned the advertising of counterfeit products.

10. Easynet Group PLC V Eastygroup IP Licensing LTD

In a recent decision (17 July 2006 UKCA), the respondent company applied to register easy.com as a trade mark for a wide range of goods and services. The Trade Marks Registry had allowed the application despite opposition to the application by the appellants, Easynet Group, under the provisions of the Trade Marks Act 1994 s.3(1)(b) and s.3(1)(c). Opposition was based on the mark being devoid of any distinctive character and of consisting exclusively of signs or indications that might serve to designate the kind, quality, intended purpose, value or other characteristics of the goods and services.

The hearing officer dismissed both grounds of opposition and held that the mark was neither descriptive or non-distinctive. On appeal, the High Court held that:

• it was assumed that the two elements of the mark (easy and .com) would, on their own, be treated as descriptive and would fall foul of s.3(1)(c)
• the hearing officer had not erred, as authorities indicated that a broader approach should be taken, which involved looking at the mark as a whole to see if it was descriptive within s.3(1)(c) and whether the mark as a whole added something more than its parts (See SAT.1 SatellitenFernsehen GmbH v OHIM (C-329/02), and BioID AD v OHIM (C-37/03))
• the test was one of overall impression and was not qualified by concepts such as unusualness or out-of-the-ordinary, which in any event would be difficult to measure
• the references to unusualness in the authorities were attempts to show how a combined expression might become more than the sum of its parts.

Thus, the registration was allowed to stand.

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