102/05/2023

Search Engines Optimization and Marketing (SEO/SEM)

Use of trademarks, unfair competition : an EU and French prospective

1

André MEILLASSOUXPartner ATM Avocats, Paris

Vice President of IFCLAPresident of the French Computer Law Association – AFDIT

www. atmavocats.comwww.afdit.fr

IFCLA ANTWERP – June 5, 2014

202/05/2023

Introduction

▌ The ranking of a website in internet searches is a strategic issue in order to be noticed on the internet.

▌ Some search engines have an hegemonic position : Google®, Yahoo®, Bing®, Яндекс® in Russia, or 百度 ([Baï Dou]) in China

▌ The ranking of a website may result of 2 factors : organic ranking and search engine marketing (SEM) .

▌ The first can be “optimized”, and sometimes “manipulated” in order to obtain a better rank▌ The second is a service proposed by the search engines, for example Google AdWords.

▌ In both cases, the choice of the key words is crucial.▌ This has generated many disputes. Especially when the competitors use as key words

trademarks, companies’ names or domain names for which the owners think they have a monopoly. This monopoly, notably for registered trademarks, has been almost “absolute” for a long time, especially in France.

Search engine ranking and intellectual property : state of the jurisprudence

302/05/2023

Search engine market shares in 2010

402/05/2023

Search engine market shares in 2013

502/05/2023

▌ ORGANIC RANKING : Organic ranking was supposed to be the result of neutral SE algorithms. Nevertheless, it can be “optimized”, by “SEO” practices : know-how and techniques which

indeed upgrade the rank of a web page among the organic results. This is not a sponsored ranking. One does not pay for this.

This optimization is made through relevant contents and the introduction of key words in the title, in the texts and in the URL of the web pages. Also, the pages can be enriched and updated regularly, or listed in an index… etc, which will ameliorate the ranking.

Organic ranking is a long term work and it is supposed to be the most efficient : some reckon that 34% of web users select the first (organic) link of the search result page (Source : Le Nouvel Economiste Magazine, n°1550, cahier n°2, from January 20 to 26 2011, Interview Alain LAIDET, page 40).

▌ SEM (OR « SPONSORED LINKS »): SEM consists in buying one or more key words who are relevant in regards to the field of

activity. The sponsored link appears at the top or to the right of the result page, thus creating a better visibility. This system can be expensive because the key words are auctioned and some words are very popular.

This ranking system is “short term”. It enhances the instant visibility of the advertiser but in the end it is considered as less effective than the organic ranking.

DISTINCTIONS BETWEEN THE 2 TYPES OF RANKING

602/05/2023

ILLUSTRATION OF THE TYPES OF RANKING

SEM

SEM

Organic ranking

702/05/2023

▌ There is much case law, which is not harmonized. As a consequence, several cases were brought to the ECJ, in particular in 2010 and 2011. On that occasion, the ECJ took position on the respective liabilities of the service providers of SEM and of the advertiser.

▌ Several rulings have given to the national jurisdictions a framework to understand these types of cases, especially : GOOGLE France and GOOGLE , March 23, 2010 (joint cases C-236/08 to C-238/08) INTERFLORA, September 22, 2011

▌ With these decisions, the CJEU has disrupted the French conception that is very protective of the property rights.

▌ The competition laws principles aim to suppress the obstacles to the free competition inside of the EU. On the other hand, the intellectual property principles aim to protect the “monopoly” of the creators and trademark owners. Between the two, the ECJ has pushed far the advantages towards the first.

LITIGATION REGARDING THE SEM

802/05/2023

▌ The provider’s regime follows the derogatory regime of the intermediate technical provider. As defined by article 6 of the French Law, called “LCEN” (June 21, 2004) transposing the directive 2000/31/CE of June 8, 2000.

▌ For the ECJ, the service provider of SEM has a “merely technical, automatic and passive” role.

▌ However, this overriding regime doesn’t grant absolute immunity and the provider can be liable in two cases :

When the provider was informed of the unlawful nature of the data or the activities of the advertiser and he didn’t promptly withdraw or rendered unreachable said data;

When the provider actively participated in the wording of the advertisement and/or in the choice of the counterfeit key words.

THE LIABILITY OF THE SERVICE PROVIDERS OF SEM

902/05/2023

▌ Case Google : « 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; »

▌ The advertiser’s liability: The ECJ considers that the owner of a trademark can oppose the use of a sign identical to his trademark in business life , only if the use of this sign is likely to impair one of the “functions” of the trademark.

▌ Among these functions : The “function of indicating the origin”. It is the essential function of the trademark and

allows the origin of the product or service to be guaranteed to the customers. The “advertising function”. This function was disqualified by the ECJ concerning the

AdWords.

THE ADVERTISER’S LIABILITY (1/2)

1002/05/2023

THE ADVERTISER’S LIABILITY (2/2)

▌ As a result, the owner of a trademark cannot forbid the use of his trademark as a key word in a SEM service, except only if this use by a third party impairs the function of indicating the origin. The national jurisdictions are to appreciate this case-by-case.

▌ Therefore, only the content of the advert (and not the use of the TM) can be a source of infringement: It is the case if the trademark is replicated directly in the advert, without the

authorization of the owner; And also if the advert is vague and does not enable to properly differentiate the

advertiser from the owner of the trademark, thus creating the confusion in the mind of an average internet user.

▌ In the case INTERFLORA it is specified that the owner of a well known trademark is entitled to forbid the use of signs identical or similar to their trademark by a third party, if this use impairs on their function of indicating the origin and/or the investment function.

▌ This function is impaired if someone : Undeservedly takes advantage on the trademark’s specifics or its fame(free riding) If there is a risk of dilution of the TM or of tarnishing its fame

1102/05/2023

▌ 4 judgments of the Cour de Cassation on July 13, 2010: LOUIS VUITTON GIFAM VIATICUM and LUTECIEL EUROCHALLENGES

In these judgments, the Cour de Cassation follows the rulings from the CJE and allows GOOGLE to benefit of the derogatory liability regime of the technical providers,

Regarding the liability of the advertiser, the French jurisdictions have made their own the framework provided by the ECJ. As a result, they have sentenced defendants (Cass. Com, July 13, 2010 « EUROCHALLENGES »; November 29, 2011, « SUZA ») or dismissed some cases (CA Paris, Pôle 5, ch. 1, February 2, 2011 « AUTO IES ») following a case-by-case rule. The basis of the decisions have either been Trademark infringement or unfair competition (usurpation of the commercial name or the domain name for example).

The “Google AdWords” jurisprudence is now well established and the jurisdictions have a case by case approach.

APPLICATION OF THE ECJ RULINGS IN THE FRENCH LEGAL SYSTEM AND CONCLUSION (1/2)

1202/05/2023

▌ Whereas in France, the owners of trademarks where very protected (some called this a monopoly or quasi monopoly), the ECJ rulings made it clear that henceforth the trademarks could be used freely as key-words in SEM, except if done in violation of some terms.

▌ Therefore, a trademark can now be used by an competitor as a key word in a SEM-type service. For this use no authorization from the owner is needed on the condition that the trademark is not reproduced in the text of the advert and that it doe not create any confusion. The principle forbidding the use of a trademark is not valid any more.

▌ The Cour de Cassation, commercial chamber, takes it further in a judgment of Mai 14, 2013. The Court considers that it a fault for the owner of a trademark to request from the ranking provider to “take the necessary steps to insure that their website dict.fr alone appear at the request dict.fr”. Furthermore, he asked that the advert of one of his competitors should not appear as a link to this key word. The Court states that failing to prove a risk of confusion, the owner of the trademark has “unduly prevented [him] from approaching some customers” and therefore “of the possibility of generating an important turnover”.

The owner of the trademark was sentenced to 80.000 € in damages.

APPLICATION OF THE ECJ RULINGS IN THE FRENCH LEGAL SYSTEM AND CONCLUSION (2/2)

1302/05/2023

▌ Unlike SEM that is a paid service and is clearly identified as such, this ranking system is called organic or natural.

▌ In the general opinion, the organic ranking is supposed to be more relevant, more genuine, more truthful. Some of the search engines like Google have actually built their success relying on these ideas. When one tapes in the name of a company, one wants to see it at the top of the results, otherwise he will stop using this search engine.

▌ That is why the search engines care a lot that their algorithms are not flawed by the SEO ("Search Engine Optimizer’s”) practices

▌ SE Optimizers aim at optimizing the organic ranking. SEO in itself is a lawful practice but it can sometimes be regarded as non compliant with the terms and conditions of the search engines or with the law.

LITIGATION ABOUT ORGANIC RANKING

1402/05/2023

▌ Indeed, the provider of SEO must be in line with the terms and conditions of the search engines who edit good practices guides. The search engines are a “free” service, but they do belong to private companies which imposes their own terms and conditions.

▌ If the rules are not followed, the search engines can take measures. For example, they can lower the popularity index (PageRank for Google) and even exclude them from the research index, leading their webpage to not be ranked at all. Emblematic cases : In 2006 Google excluded BMW from the index because they had created to many secondary pages helping the site to be better ranked Or in February 2013 the British web site Interflora has been invisible during 11 days.

▌ Methods called “Black hat SEO”, where a competitor or ill intentioned persons flaws the rules. The beneficiary of these methods can be penalized by the search engines.

▌ For example : backlinks, misleading redirection, cloacking, negative SEO (using the competitor’s code to create other pages), domain names with a chain of key words, doorway sites, SpamCo (spaming the forums by commenting with a link), robbing relevant content, hacking…etc.

LITIGATION AROUND ORGANIC RANKING

1502/05/2023

▌ Meta tags: have been regularly sentenced in the last few years. Initially on the basis of infringement as well as unfair competition and parasitism. E.g. Civil Court of PARIS, 3e ch. 4e section, January 26, 2012, Webangelis/Laurent I.

▌ However, infringement is no longer used as much because some jurisdictions think that the use of the trademark as metadata is not something the public can see. The infringement charges are then rejected: TGI PARIS, 3rd chamber, 3rd section, 29th October 2010:

▌ “Meta tags are information lodged within a document and used by the search engines to rank the web pages. These tags are not displayed, and are therefore invisible for the web users. A trademark has to be noticeable by the web user to ensure that the origin of the product is recognized and consequently, the use of a sign as a meta tag cannot be considered as trademark infringement as foreseen in articles L.713-2 and L.713-3 of the intellectual property code.”

Examples of Meta tags

1602/05/2023

▌ Doorway pages: Cour d’appel of Douai Chamber 1, section 2, October 5, 2011

“By multiplying the booking of domain names including many times the term “bière” promoting the creation of links [via the creation and establishment of websites called doorways and lacking an offer] directing to their domain name, and thus, ranking him at the top of the search engines results, Julien L. and the SARL Saveur Bière have committed acts of unfair competition by depriving Céline S.’s website, of the same industry, from being normally visited”.

The use of doorway websites is sentenced because, says the Court, “all of these techniques aim at misleading the search engines”.

They were therefore condemn on the basis of unfair competition to 10.000€ of damages.

The doorway pages

1702/05/2023

▌ Backlinking : It is the massive, sometimes automatic creation of hyperlinks on one or several key words in order to obtain a better ranking on this key word. This practice is prohibited by Google.

▌ In French law, the Cour d’appel of Paris recently condemned (March 28, 2014) the beneficiary of backlinks pointing back to his website and that used the trademark of one of his main competitor as an anchor .

“By using intensively, in the context of the creation of backlinks, the company name and the domain name of a competitor as a key word, for organic requests, in order to mislead the search engines, the defendant has, by this fact alone, provoked a unfair misappropriation of customers and parasitic use of the investment carried out by the company Sofrigam created beforehand and widely known in the considered market, by increasing his visibility in a diverted way”. The charges of TM infringement were rejected on the basis that “the links associated to the word Sofrigam are for the most invisible, needing an analysis of the website to be detected, in such way that they are not susceptible to generate confusion in the minds of the web user who is looking to acquire Sofrigam products and will find as result of his request, Sofrigam’s website ranked as one of the first site”.

The backlinks (also incoming links or inbound links)