Website Law

When you search the internet using Google, you get two types of results: “organic” results determined by the Google algorithm to be relevant to your query, and paid advertisements.

The paid advertisements appear where an advertiser has bid on keywords relating to the search terms - i.e. has agreed to pay Google in respect of user clicks resulting from the appearance of the advertisement in search engine results pages relating to those keywords.  This is a form of “pay-per-click” advertising.

Where an advertiser uses keywords that are identical or similar to another company’s trade marks, there is an obvious risk of conflict.  The question is: can a trade mark owner use its trade marks to prevent this (arguably unfair) form of competition?

European national courts

There have been a number of cases in Europe dealing with the issue of trade marks being used as keywords without authorisation, but the national courts have not yet arrived at a clear  position.

In the words of Mr Justice Arnold, “given that both European trade mark law, and European law with regard to the liability of internet service providers are substantially harmonised … there ought to be a common set of European answers to the issues that arise in such cases.” (Interflora Inc. Interflora British Unit v Marks and Spencer Plc Flowers Direct Online Limited ([2009] EWHC 1095 (Ch)).  Accordingly, several cases have resulted in references to the ECJ.

In the German Bananabay case (I ZR 125/07), both the claimant and defendant were sellers of adult entertainment products. The claimant was the owner of the registered trade mark BANANABAY, and wanted to stop the defendant from using the mark as an AdWords keyword. The German Federal Supreme Court (the Bundesgerichtshof) decided that it needed to be clarified whether “use as a trade mark” includes the use by a Google (not a party to the proceedings) of the trade mark as an Adwords keyword.  Accordingly, the question was referred to the ECJ.

In the UK, Interflora is attempting to stop Marks and Spencer using “Interflora” as a keyword. M&S argues that its use of the keyword is not “use in trade”, and that there is no confusion between the two flower services.  As part of his decision to refer this case to the ECJ, Justice Arnold noted that Google’s policy (and presumably its legal advice) in the UK and Ireland is different to its policy elsewhere in Europe.

In France, three companies are seeking to prevent Google from selling their trade marks as AdWords (C-236/08 Google France, Google Inc. v Louis Vuitton Malletier,  C237/08 Viaticum Luteciel, and C-238/08 CNRRH Pierre Alexis Thonet, Bruno Raboin, Tiger, a franchisee of Unicis). These cases are different from Bananabay and Interflora, in that the defendant is Google, not the advertiser.  In the reference to the ECJ, the three French cases have been combined.

European Court of Justice: the Advocate General’s Opinion

Where questions are referred to the ECJ, the Advocate General provides an opinion on those questions, which the ECJ will consider before its ruling. The Advocate General’s opinion on the questions referred by the French court is the first to become available.

The three references from the French court before the ECJ all pose, in the Advocate General’s  words, the same question: “does the use by Google, in its AdWords advertising system, of keywords corresponding to trade marks constitute an infringement of those trade marks? Although the references are formulated somewhat differently, they all ask for an interpretation of Article 5(1) of Directive 89/104 and therefore concern that basic question of whether Google has committed a trade mark infringement”.

The Advocate General states that Google should not be held liable for infringement when allowing advertisers to use another party’s trade mark as an AdWord, because no product is actually being sold to the general public at the time when the keyword is selected.  He argues that “the use is limited to a selection procedure which is internal to AdWords and concerns only Google and the advertisers.” Accordingly, the Advocate General suggests that trade mark owners should not be allowed to prevent the use by Google of their trade marks as keywords.

In answering the question whether the use of a trade mark as a key word affects the essential function of the mark, because of a likelihood of confusion on the part of the public, the Advocate General finds that Google is a tool that establishes a link between keywords corresponding to trade marks and natural results, but this link alone is not sufficient to establish confusion, because “internet users only decide on the origin of the goods or services offered on the sites by reading their description and, ultimately, by leaving Google and entering those sites”. He states that “neither the display of ads nor the display of natural results in response to keywords which correspond to trade marks leads to a risk of confusion as to the origin of goods and services”, and that “neither AdWords nor Google’s search engine affects or is in danger of affecting the essential function of the trade mark”.

The Advocate General also does not think that Google’s use of keywords takes an unfair advantage of, or is detrimental to the distinctive character of a trade mark; because, while trade marks enjoy various types of protection, which are “linked to the promotion and innovation of investment”, this protection is never absolute, and must be balanced against other interests, such as freedom of expression and freedom of commerce. He continues by stating that Google’s uses of key words which correspond to trade marks are “independent of the use of the trade mark in the ads displayed and on the sites advertised in AdWords; they are limited to conveying that information to the consumer”.

He concludes by saying that “if trade mark proprietors were to be allowed to prevent those uses on the basis of trade mark protection, they would establish an absolute right of control over the use of their trade marks as keywords. Such an absolute right of control would cover, de facto, whatever could be shown and said in cyberspace with respect to the good or service associated with the trade mark”.

The Advocate General’s opinion is followed in approximately 80% of cases.

Trade mark infringement is a trump card when it comes to domain name choice. No matter how many good reasons you have for choosing a particular domain name, if the domain name infringes someone else’s trade mark, you should steer well clear.

Why?

First and perhaps foremost, trade mark infringement proceedings can swallow an immense amount of time and money. Hundreds, sometimes thousands, of hours of management time are invested in a trade mark dispute fought all the way to a decision. And proceedings can drag on for years. If you want a reasonably experienced legal team fighting your corner in the High Court, then your costs for a full trial may run into hundreds of thousands of pounds. Even an exchange of solicitors’ letters can cost thousands for each party.

Second, if you lose in court, you’ll be faced with paying damages, handing over the domain name, possibly changing your business’s name and paying the lion’s share of the winning party’s legal costs (as well as your own).

Third, if a trade mark does infringe, it’s likely that your domain name won’t adequately distinguish your website from the website and business of the trade mark owner.

Generic domain names

The risk is greatly lessened if your domain name is “generic”, although that word is not used in the legislation. In point of fact, there are no less than four distinct ways in which a trade mark may be considered to be “generic” - and therefore not registrable - under the Trade Marks Act 1994 (the keystone of the UK trade mark regime) .

First, a trade mark will not be registrable if it is not capable of distinguishing the goods and services of a business from those of other businesses.

Second, a trade mark will not be registrable if it is devoid of any distinctive character. (E.g. a mark consisting of the word TREAT in respect of dessert sauces and syrups was refused registration on this ground.)

Third, a trade mark will not be registrable if it consists exclusively of exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services. (E.g. EXCELLENT FRENCH WINES would not be registrable in relation to wine, whether or not French, and whether or not excellent.)

Fourth, a trade mark will not be registrable if it consists exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade. (E.g. ESCALATOR and LINOLEUM, which started life as brand names.)

However, there is one important caveat to points two, three and four: a trade mark which has acquired a distinctive character as a result of the use made of it may by virtue of that fact be registered.

This caveat aside, if your domain name is generic then you can be reasonably sure that there is little risk of trade mark infringement, because the mark will not be registrable under the trade mark legislation, and its use will not be of the sort liable to give rise to unregistered trade mark rights (as to which, see below).

For the purpose of considering whether a domain name is generic, you need to strip away the non-distinctive elements such as the http://, the www and the domain extension (.com etc). For example, the domain name www.website-law.co.uk is generic when used on a website about the law relating to websites. For this reason, I did not bother with a trade mark search before choosing this domain.

Trade marks searches?

Unless the domain name you have chosen is clearly generic in respect of the use you plan to make of it, you should conduct some trade mark searches before building a business around it.

The first stage in any trade mark search is usually a little amateur sleuthing. Start by searching the UK trade mark registry and OHIM for any identical marks, or marks beginning with the same word.

Obviously, if you plan to do business outside the UK, you should conduct similar searches in reach relevant jurisdiction.

If you are investing a lot of money in the business, you should consider asking a professional search company such as Thomson Compumark to conduct detailed searches. These would usually be done through a professional intermediary (typically, a solicitor specialising in intellectual property or a trade mark attorney) who would interpret the results.

Unregistered trade marks

Unfortunately, just because a person doesn’t have a trade mark registration, that doesn’t mean they don’t have any rights. Under English law you cannot be sued for unregistered trade mark infringement, but you can be sued in the tort of “passing off”

The definition of this tort can easily fill a chapter, so I’ll keep it simple to the extent of being a little misleading: the tort arises where a person makes a misrepresentation which damages the goodwill (i.e. the value inhering in a commercial reputation) of another person. For example, if I used the domain name www.chanceclifford.com for legal services, I could be sued by Clifford Chance LLP in passing off even if they didn’t have any relevant registered trade marks (which they do). The basis of their claim might be that I was misrepresenting to buyers of legal services that I was in some way associated with Clifford Chance LLP and thereby taking advantage of their goodwill, which would inevitably lead to a loss of business.

So, what does all this mean for your choice of domain name?

It means that, before setting up shop, you should do some “common law” searches as well as registry searches before. That means searching on Google, Yahoo and MSN, in the BT Directory and the Yellow Pages, and in all relevant WHOIS databases for unregistered trade marks which are identical or similar to your chosen domain name. You should also search in other relevant local and specialist directories.

Again, a professional search should be commissioned if a lot of money is being invested in the business and/or site associated with the domain name.

Does it infringe?

If you have found some registered or unregistered trade marks which are identical or similar to your proposed domain name, you will need to decide whether there is a real risk of infringement. I focus here upon registered trade mark infringement.

A registered trade mark may be infringed by the use in the course of trade:

(i) of a domain name which is identical to the trade mark, in relation to goods or services which are identical to those in respect of which the trade mark is registered; or

(ii) of a domain name which is similar or identical to the trade mark, in relation to goods or services which are similar or identical to those in respect of which the trade mark is registered, where as a result of such use there exists a likelihood of confusion on the part of the public; or

(iii) of a domain name which is similar or identical to the trade mark, where the trade mark has a reputation in the UK and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.

So, unless your chosen domain name and the registered trade mark in question are identical to one another, and you plan to use the domain name in relation to goods or services which are identical to those for which the trade mark is registered, you are going to have to make a difficult judgement.

Usually, you have to decide whether the domain name is really “similar” to the mark, and whether there is any likelihood of confusion on the part of the relevant public. As you might expect, there is a mountain of case law on these questions.

In the case of a mark which “has a reputation in the UK”, you will have to decide whether you use is without due cause, whether it takes unfair advantage of the mark, and whether detrimental to the mark.

Before making any of these judgments, you should carefully study the relevant law, and carefully consider whether the risk of a trade mark infringement claim is worth taking.

Domain name disputes

Before finishing, you will also of course have to think about the chances of losing the domain name in domain name arbitration proceedings. But that is a matter for another post…

Health warning: this post contains some pretty crude summaries of some subtle areas of law, and if you are in any doubt about whether a chosen domain name infringes another’s mark you should really seek professional advice.