Google Liberalizes Its European Trademark Policy

By Eric Goldman

After the ECJ’s favorable opinion in the Google cases, I’ve been wondering if Google would liberalize its trademark policy in Europe. It took Google 4 months to parse the ECJ’s inscrutable opinion and make a call, but it finally decided that the opinion was favorable enough to support liberalization.

After the changed European policy (starting Sept. 14), Google will have a virtually uniform world-wide policy not to block bids on trademarked keywords at the trademark owner’s request. Google will block trademark references in ad copy at the trademark owner’s request, but this will be subject to regional differences. In the US and (starting Sept. 14) UK, Ireland and Canada, Google will not block TM references in ad copy for resellers, complementary product sellers and information sites. In the EU and some related countries (EFTA), Google’s new policy will be to review ads on an ad-by-ad basis as follows:

in response to a complaint from a trademark owner, we will do a limited investigation as to whether a trademarked keyword in combination with particular ad text is confusing as to the origin of the advertised goods and services. If we find that it is, we will remove the specific ad that is the subject of the complaint.

This language “confusing as to the origin of the advertised goods and services” comes from the Google ECJ opinion, but I’m still not sure exactly what satisfies this standard. Google will likely have to develop its own internal common law to figure out how it interprets the term.

Last year, Google liberalized its US trademark policy. That, combined with the 2nd Circuit’s Rescuecom decision, helped spur a flurry of trademark lawsuits against Google (which Google has had some success beating back). Will Google’s policy liberalization in Europe similarly prompt a deluge of new litigation?

Perhaps not, because Google is acting on the strength of an ECJ decision, plus additional helpful rulings in the Louis Vuitton case on remand to the French high court as well as a recent ECJ decision in Portakabin. In contrast, Google had no clear litigation success in the US to support its trademark policy liberalization; rather, it came on the heels of Google’s 2nd Circuit loss in Rescuecom. In fact, I’ve been told that a number of trademark lawsuits were dropped in Europe after the Google ECJ decision, presumably because the plaintiffs figured they couldn’t win.

At the same time, I can’t imagine trademark owners will be happy with Google’s new policy. Google has had more adverse rulings in Europe than it’s seen in the US, and trademark owners in Europe have a broader array of “unfair competition” doctrines to lob at Google even if they feel constrained by the ECJ rulings. Further, trademark owners might disagree with Google’s interpretation of its policy to block confusing ad text/keyword bids. All told, Google could be in for a turbulent ride in Europe.

My main Q is: how much new incremental revenue will this policy change unlock? It bears noting that after Google made its policy changes last year, it subsequently reported huge year-over-year revenue growth. How much of that growth was due to organic growth of Google’s business, and how much of it was attributable to new advertising coming from the liberalized policy? I’ve never gotten a satisfactory answer to that Q. I wonder what will happen with the Europe change. Should we anticipate Google’s European revenues are about to get turbocharged by all of the new advertising that was previously squelched by the former policy?

I also wonder if this change will put increased pressure on trademark owners to sue advertisers directly. Already those lawsuits are too numerous to count in the US; and the Google ECJ opinion (combined with the Portakabin opinion, a TM owner v. advertiser suit) put the onus on advertisers not to create confusion through their keyword advertising. Personally, I think most of those TM owner vs. keyword advertiser lawsuits are massive money pits, but far too many TM owners have pursued them nonetheless.

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