Google’s AdWords faces further scrutiny in the Paris Court of Appeal

Both LVMH Moet Hennessy Louis Vuitton and the internet search giant Google claimed victory last week in the latest of a series of challenges to Google’s AdWords business. On Tuesday 13 July the French Supreme Court (Cour de Cassation) referred a ruling in favour of the French luxury goods company back to the Court of Appeal.

The dispute involves Google’s paid referencing service, ‘AdWords’, which allows advertisers to bid for keywords- many of which are protected trademarks- used in Google’s search engine. When an internet user enters a keyword, advertisements known as “sponsored links” are shown in the top of the screen. Consequently, a search on a trademarked word could bring up a competitor’s product or - in theory – even direct the consumer to counterfeit products.

The Cour de Cassation’s judgment affirmed an earlier ruling by the European Court of Justice, which held that the practice of selling keywords associated with registered trademarks does not infringe trademark rights per se. Despite using its official blog to herald that ruling as a triumph for the free flow of information over the shackles of an overly coercive IP regime, the court made it clear that such advertising could constitute an infringement where it “does not enable an average internet user... to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark... or on the contrary, originate from a third party.” LVMH said that the Supreme Court’s recent decision “will enable the Paris Court of Appeals to rule on Google’s civil liability when using trademarks without the trademark owner's authorization." No date has been set for the forthcoming hearing.


Sources

http://googleblog.blogspot.com/2010/03/european-court-of-justice-rules-in.html

http://www.mediaweek.co.uk/news/1015878/Google-AdWords-held-liable-sale-trademarks/

http://sanfrancisco.bizjournals.com/sanfrancisco/stories/2010/07/12/daily10.html

ISPs take on the Digital Economy Act

BT and TalkTalk bosses call for judicial review of Digital Economy Act in High Court.

BT and TalkTalk, two of the leading UK Internet Service Providers (ISPs) stated that they will be “seeking clarity" from the High Court on the legality of the Digital Economy Bill’s provisions before spending tens of millions on implementing the system.

The current code of practice set out in the Digital Economy Act only applies to the larger ISPs, i.e. those with more than 400,000 subscribers, putting larger ISP’s at a disadvantage according to Andrew Heaney, the Executive Director at TalkTalk. Mr. Heaney stated

“It means we could have huge swathes of customers moving to smaller ISPs to avoid detection”.

TalkTalk chairman Charles Dunstone says

"The Digital Economy Act's measures will cost the UK hundreds of millions and many people believe they are unfair, unwarranted and won't work," "It’s no surprise that in Nick Clegg’s call for laws to repeal, this Act is top of the public’s ‘wish list’."

Digital Economy Act vs EU Law


BT and TalkTalk’s main argument lies with the European e-commerce directive, which states that ISPs are “mere conduits” of content and shouldn’t be held responsible for the traffic on their networks. The two companies will seek clarification if this European law conflicts with the newly introduced Act. In a statement to the BBC, the Coalition Government said

"We believe measures are consistent with EU legislation and that there are enough safeguards in place to protect the rights of consumers and ISPs and will continue to work on implementing them."

Privacy Rights Infringed?


Mr. Heaney (TalkTalk) also expressed concerns over users privacy rights claiming that the act may also be in contravention of the privacy and electronic communications directive. Charles Dunstone, TalkTalk Chariman, told the Times

'The Digital Economy Act's measures will cost the UK hundreds of millions, and many believe they are unfair, unwarranted and won't work'

he said.

"That’s why we need a judicial review by the High Court as quickly as possible before lots of money is spent on implementation."

ISPs vs the Creative Industries


The Digital Economy Bill has already been subjected to much criticism after being “rushed through” parliament earlier on in the year. Among its most controversial measures were proposals to disconnect persistent illegal file-sharers from the web and give copyright holders the power to block access to websites hosting illegal content. The BPI, which represents the UK's recorded music industry, has campaigned hard for the Digital Economy Act to act against file sharers. The Coalition Government have stated

"The Digital Economy Act sets out to protect our creative economy from the continued threat of online copyright infringement, which industry estimates costs the creative industries, including creators, £400m per year,".

Mr Heaney says

"It is outrageous that they are coming begging at our door but are not helping themselves,".

Ofcom have said that plans to disconnect users would not be implemented until 2011 at the earliest.

More Reading:

BBC News
The Times
The Guardian


Watch this space for updates.