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W(h)ither the Consumer Interest? Search Engines and Keywords in EU Trade Mark Law Dr Dev Gangjee

W(h)ither the Consumer Interest? Search Engines and Keywords in EU Trade Mark Law Dr Dev Gangjee. Issues Considered. Consumer perception - historical basis for TM infringement Are consumer interests still relevant for keyword based TM infringement? Do other interests get priority?

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W(h)ither the Consumer Interest? Search Engines and Keywords in EU Trade Mark Law Dr Dev Gangjee

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  1. W(h)ither the Consumer Interest?Search Engines and Keywords in EU Trade Mark LawDr Dev Gangjee

  2. Issues Considered • Consumer perception - historical basis for TM infringement • Are consumer interests still relevant for keyword based TM infringement? Do other interests get priority? • Where consumer interests are relevant, what is law’s constitutive role in building up the average consumer? • Does keyword litigation illustrate a broader shift away from the consumer in TM law?

  3. A. The Problem: TMs as Keywords

  4. 1. Liability: Advertisersselecting TMs

  5. 1a. Imitations: Counterfeits; Replicas & Knockoffs

  6. 1a. Official site tops the list

  7. 1a. ‘Replica’ Site – FAQ clarifies

  8. 1b. Legitimate Competitors

  9. 1c. Comparisons & Reseller/Retailer

  10. 1c. Comparison: alternatives offered

  11. 1c. Retailer: Alternatives offered

  12. 2. Liability: Search EnginesGoogle Adwords Programme

  13. 2a. Keywords Selection Tool:Descriptive/generic category selection

  14. 2b. TMs suggested as keywords

  15. 3. Ads and Revenue Model • Aim is for unbiased search: ‘Google's mission is to organise the world's information and make it universally accessible and useful.’ • Yet they sell advertising e.g. Google 97%-99% of revenue from Adwords and Adsense programmes • SEOs ‘game’ search factors • Google responds by changing the criteria for search and ranking (interventions)

  16. 4. TM Proprietor’s Objections • Likelihood of Confusion • Free Riding on image/effort • Loss of Sales • Unfair free riding or pro-competitive side by side comparisons? Parallels with real world retail? • How do consumers interpret the presentation of sponsored results along with ‘natural’ search results? • Can we assume keyword ads/sponsored results to be inherently misleading (concepts such as initial interest confusion)?

  17. 5. Importance of Search Engines • Shift to search model of navigation • Free (Ad revenue) • Indexing the web; getting better at it – evolution of search engines • Useful for searchers (consumers), TM proprietors • Regulatory concerns do surround search engines, but TM law may be a blunt instrument • How does TM law organise its proprietary rights?

  18. B. Justification & Scope of Protection

  19. 6a. Origin Function • Rationale: Preserve Communicative Function of TM • Infringement of (narrow) rights to exclusivity where D’s use of same/similar sign results in LoC • Co-incidence of Proprietor and Consumer (Public) interest; Uncluttered Information in the marketplace • Landes & Posner’s law & economics theory – encourages marketplace efficiency

  20. 6b. Origin cont. • Arsenal v Reed(C-206/01) The ‘essential function of a trade mark is to guarantee the identity of origin of the marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin. For the trade mark to be able to fulfil its essential role in the system of undistorted competition which the [EC] Treaty seeks to establish and maintain, it must offer a guarantee that all the goods or services bearing it have been manufactured or supplied under the control of a single undertaking which is responsible for their quality..’

  21. 6c. Quality • HAG II (C-10/89) (AG Jacobs) ‘Trade marks… act as a guarantee, to the consumer, that all goods bearing a particular mark have been produced by, or under the control of, the same manufacturer and are therefore likely to be of similar quality. The guarantee of quality offered by a trade mark is not of course absolute, for the manufacturer is at liberty to vary the quality; however, he does so at his own risk…’

  22. 6d. Communication/Advertising • Intel v CPM (C-252/07) Jun ‘08 (AG Sharpston) Well known ‘marks frequently perform functions which go beyond linking goods or services to a uniform source. They present a powerful image of quality, exclusivity, youth… or other reputedly desirable lifestyle attributes, not necessarily associated with specific products but capable of presenting a strong marketing message in itself.’ • Image generates and retains custom

  23. 6e. Advertising cont. • L'Oreal SA v Bellure NV (C-487/07) Feb ‘09 (AG Mengozzi) • The ‘“communication”, investment, or advertising functions’, which ‘arise from the fact that the investment in the promotion of a product is built around the mark’ and are, therefore, ‘values which deserve protection as such, even when there is no abuse arising from misrepresentations about either origin or quality’.” • Investment is required for this image

  24. 7. Origin  Quality  Image So what? • What is this new intangible object being created? What are the content and contours of ‘image’? • Who creates it? (Public authorship?) • How plastic/fragile? (Lehman Bros.?) • Image protection is good for the proprietor; but what is the consumer or general public interest? • Changes in market practice insufficient (ought from is); Exclusivity for some takes away rights from others; affects freedoms and interest • No boundaries to ‘free riding on image’ • Functions are layered but 3 protected independently; boosted by 1, 2 and ‘takes off’

  25. C. The ECJ References

  26. 8a. Four+ References • France: Google v Louis Vuitton Malletier (C-236/08); Similar references in (C-237/08); (C-238/08) • Austria: Die BergSpechte Outdoor Reisen v Günter Guni (C-278/08) • Netherlands: Portakabin v Primakabin (C-558/08) • Germany: Eis.de GmbH v BBY Vertriebsgesellschaft mbH (C-91/09) (BANANABAY) • Potentially UK: Interflora Inc v Marks and Spencer plc [2009] EWHC 1095 (Ch)

  27. 8b. Six sets of Issues • Threshold question: Is D’s use, ‘use as a TM’/’use likely to affect the functions of a TM’? (Invisible use etc) • Double Identity infringement • LoC infringement • ‘Dilution’ infringement (Unfair Advantage) • Defences (TM Law; ISP host safe harbour) • Residual Role for Unfair Competition Law, or full harmonisation via TM Law?

  28. 9. Double Identity • Art 5(1)(a) TMD. The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade: • any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered;

  29. 9a. Purpose of this Provision? • Advantage: no need to prove confusion • Aimed at counterfeiters; presumed confusion? (e.g. TRIPs) • Or ‘absolute’ protection? (e.g. Benelux) References: • Invisible use, so is this ‘use of an identical sign’ at all? • If use is visible but under sponsored links section, is confusion still presumed?

  30. 10. Likelihood of Confusion • Test in Art 5(1)(b) TMD: (i) Same/similar signs; (ii) same/similar g/s; (iii) LoC factors (distinctiveness, consumer sophistication etc) • Reference: Sponsored link context excludes LoC? • Online search behaviour (Goldman etc) • Real world supermarket behaviour • Initial Interest Confusion; Formalistic, box ticking to presume confusion? • Or continue to anchor the test on contextual consumer interests and behaviour?

  31. 10a. Search: A Complex Process Goldman ‘Deregulating Relevancy’ (2005) • Stage 1: Objective Formulation (buy something, weather?) • Stage 2: Search Provider Selection (search, DNS, click link) • Stage 3: Keyword Selection (poor, domain expertise) • Stage 4: Search • Stage 5: Results Evaluation (preview of filtering content; judging relevancy is complex; topicality; used to some sorting; educative feedback) • Stage 6: Decision (explore results v new search/engine) • Stage 7: Investigation (iterative; on track?; associative learning; ltd. retracing costs) • Stage 8: Objective Satisfaction NB: Searchers can change provider/keyword at various stages

  32. 10b. Inferring Searcher’s Objectives from Keywords - Complex • Searchers do a poor job of selecting keywords • Furthermore, Objective Opaqueness – need contextual clues for meaning (linguistics) e.g. ‘Orange’ or ‘culture’ • Assuming TM used as signifier for a product, search = request for Pre-purchase (reviews, competitors’ products), Purchase (best price including 3P vendors), Post-Purchase (support, repair, accessories) or Community (clubs) info? • Or seeking news on company – employment; investor info; supplier info; general news. • Or seeking a 3P with the same TM; dictionary use; place name; typo etc • Or using TM as proxy for products So a range of uses of the trade mark

  33. 11. Dilution – Unfair Advantage • Cluster of 3 actions in Art 5(2) TMD: detrimental to distinctive character (blurring); detrimental to repute (tarnishment); takes unfair advantage of DC or R (free riding/unfair advantage) • We live in a world of borrowing & copying • So is any advantage/benefit caused by referential use unfair, or does the advantage have to be harmful to P’s well known mark? • References: Does sale of keywords by search engine violate these provisions? Both search engine and advertiser are benefiting, but is this unfair? • Does purchase of keyword by advertiser constitute UA or are other factors required? • What about purchasing deliberate misspelling keywords? (Do you mean…)

  34. D. L’Oreal’s logic:‘Because You’re Worth It’ • Double Identity • ‘Dilution’ - Unfair Advantage

  35. 12a. The facts • Bellure legitimately manufactured smell-alike perfumes • Used (a) comparison lists and (b) allusive names and packaging for its products • No LoC – different brackets of consumers; vast difference in prices • Attempt: signal qualitative equivalence of scents • Comparison lists and double identity • Packaging and UA

  36. 12b. Double Identity • Provision not based on presumed confusion • Any use which affects the functions of a trade mark (whether humble or renowned) is caught by double identity • When is the image/advertising function affected? • How does an average TM have an ‘image’?

  37. 12c. Unfair Advantage • Regarding the use of allusive packaging and names by D, mere free riding is sufficient. No need for identifiable harm. • Advantage: transference of an attractive image (assumed from existence of image and link between two signs) • Unfair: Free riding on P’s investment • So protecting investment in image, to the exclusion of any analysis of consumer interest

  38. E. Concluding Observations

  39. Today the EU, tomorrow…? • Cautionary tale? Editing out the consumer from TM law • Why the more extreme Functional approach? • Ahistorical reboot of EU TM law in 1989 (a) political compromises in legislative drafting; (b) compromises in adjudication (single opinion; no dissents); (c) History – Civil law interpretative method • Geographical scope of EU TM law (CTM, TMD & 27 members)

  40. Where to from here? • Review of the EU TM Regime • Refine the scope of infringement; re-introduce the consumer/public interest • Enhance defences (categorical or general) • Competition law steps in • Commercial speech intervention (less likely)

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