AdWords dock in a French safe harbour

If you thought that the Google AdWords saga ended when the Court of Justice of the European Union (‘CJEU’) ruled that hosting keywords corresponding to trade marks does not amount to a “use in the course of trade” that the right owner can prevent [Google France v Louis Vuitton Mattelier, Joined Cases C-236/08 to C-238/08], then you may want to think twice. This is also because of a tasty decision of the Paris Court of Appeal rendered last week [decision of 9 April 2014, available here in French]. Letting (almost) aside the issue of the “use in the course of trade”, the Court of Appeal considered whether Google’s activities with AdWords would qualify it as an “active provider” and, if so, whether this would exclude applicability of the safe harbour provided by Article 14 of the E-Commerce Directive. Here’s how it went.

So they say. 

The claimants were two French companies providing tourist services: Voyageurs du Monde [‘World Travellers’] and Terres d’Aventures [‘Adventure Lands’]. Between 2004 and 2005, they discovered that some competitors were using AdWords to provide advertising popups when users searched on Google words identical or similar to their trademarks. Consequently, they sent Google a number of notices, seeking the take down of the allegedly infringing contents. Google promptly took down the contested ads and, upon request from the claimants, included some terms [like “voyageur du monde”, “vdm”, “terres d’aventures”, “terredav”, “terre d’aventure” and “voyage terre d’aventure”, just to mention a few] in the AdWords’ filtering list. Later on, however, the claimants found out that other competitors’ advertisements still appeared when users searched their trade marks on Google. Thus, in 2006 Voyageurs du Monde and Terres d’Aventures brought proceedings before the District Court of Paris, claiming that Google itself had infringed their own trade marks and that it was also liable for acts of unfair competition and misleading advertising.

Whilst dismissing the trade mark infringement claims, the District Court of Paris found Google liable of unfair competition and misleading advertising [the decision is available here, in French]. In particular, the District Court ruled that, in providing the AdWords service, Google “directs, suggests and supports” users’ advertising activity. Accordingly, the Court considered that the Big G could not benefit from the liability exemption pursuant to the E-Commerce Directive and that, instead, it had to comply with the liability rules applicable to “traditional” publishers.

The Paris Court of Appeal, however, took a different view.

Firstly, the Court of Appeal considered that, by providing the AdWords service, Google is to be considered an hosting provider within Article 14 of the E-Commerce Directive [and Article 6 of French Law No 2004-575, which transposed the Directive into the French system], and it is thus exempted from liability for third-party content hosted on its platform. Recalling the CJEU in Google France v Louis Vuitton Mattelier, according to which

“Article 14 of [the E-Commerce Directive] … 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”,

the Court of Appeal focused on Google’s role towards “the identification and the selection of keywords, alongside with the redaction of the commercial message accompanying the promotional link”. In this regard, it held that the process for generating and selecting keywords - as well as creating commercial advertisings – was entirely automatic: it is the user that “chooses on his/her own motion the keyword reproducing the trade marks upon which protection is claimed”, and he/she does so through software that does not entail any active intervention by Google.

The same principles apply to the “suggestion” of keywords performed by the AdWords’ system during the bid, which the claimants had indicated as an evidence of Google’s active role. The Court held that:

“The suggestion of keywords … is performed automatically on the basis of the most frequent queries of earlier users. This does not suffice for the purpose of establishing an active role of Google, which only intervenes in the choice process by warning users about the possible … existence … of terms that might be covered by exclusive rights”.

As it is the user that chooses the keyword and edits the advertising through a wholly automatic process, then, “within the act of providing the AdWords service, Google’s intervention is of … merely technical, automatic and passive nature, consequently lacking control and knowledge of the hosted information”.

As such, Google can generally benefit from the safe harbour provided by the E-Commerce Directive and the relevant provisions under French law.

Harbour must be somewhere there...

This said, the Court of Appeal went on and considered whether in this specific case Google failed to comply with the obligations imposed on hosting providers. In principle, the Court noted that Google had neither a general duty to monitor information stored nor to seek illegal activities or to set up general filters. On the other hand, Article 6 of French Law No 2004-575 provides that liability for information generated by third parties arises if the hosting provider “has actual knowledge of their illegal nature or of facts or circumstances from which the illegal nature or information is apparent; or, after obtaining such knowledge, it [does not] act expeditiously to remove or to disable access to the information”. The same provision further states that the ISP’s knowledge is to be presumed only when an infringement notice sent by the right holder includes certain detailed information like “the specific localisation of the contested content” -- that is to say, the URL of the allegedly infringing content. Any time Voyageurs du Mondeand Terres d’Aventures did so between 2004 and 2005, the Court said, Google complied with Article 6 obligations by removing the contested ads in due time. On the contrary, the claimants’ further notices lacked information about the URLs or hyperlinks to the contested information. This prevented Google from becoming aware of the existence of infringing contents and, consequently, could not result in Google’s liability.

As to the contested ads that appeared after the initial take downs, the Court found that they were generated by ‘Broad Match”, ie an AdWords’ function allowing promotional messages to automatically popup also on variations of the selected keywords. In the case at issue, Google proved that the contested ads were generated by users searching generic words included in the claimants’ trade marks, such as “voyageur” (travelers), “mond” (world), “terre” (lands) or “aventure” (adventure). Such function was neither eligible for proving an active approach towards keywords nor could be “considered illegal as such”, the Court said, and this was particularly the case when – as it happened here – it involves generic words that have to remain free to use as keywords in advertising.

Finally, the Court excluded that the contested ads were misleading, as the indication “promoted ads”, the different background colour and the links to third parties’ websites allowed the average internet user to perceive them as something different from the natural results and, thus, not to confuse them as advertisings coming from Voyageurs du Mondeor Terres d’Aventures.

Confusing clues of activity

This decision of the Paris Court of Appeal comes a few weeks after another national ruling on ISP liability by the Court of Appeal of Madrid [the Telecinco case, on which see this Kat’s note here]. These twin cases might signal a certain trend. After the confusing (to say the least) CJEU’s guidelines on how an ISP should behave to be considered “neutral” [ie not active, ie eligible to benefit from the safe harbour] in Google France v LVMH and L’Oréal v eBay, such national courts pointed out that a non-neutral approach towards the data stored cannot be inferred from the provision of automatic services in addition to the mere hosting [such the “related videos” in the Spanish case or the “suggested keywords” service in Adwords]. If such services are as “technic, automatic and passive” as the mere hosting, there is really no reason why an ISP should be excluded from the liability exemption provided by the E-Commerce Directive. Instead, these decisions adopted a strict [and, in this Kat’s view, more compliant with the rationale of the E-Commerce Directive] concept of ISPs' actual “knowledge of, or control over” the third-party content. If knowledge has to be “actual”, the same is required with “control”, which has not to be merely technical or automatic, but rather “active” or - in other words -  “human”. 

UPDATE: ENGLISH TRANSLATION OF THE DECISION IS AVAILABLE HERE.