Open UKLSR Volume 1(2) - Uklsa

18
The Legality of Google AdWords
pointed out by the English courts of the difficulty in applying the ECJ test, it is
submitted that it would be difficult in practice to demonstrate that the advertising
function of the trademark has been infringed. This supports the assertion that from a
legal perspective, competitors need only be concerned with not causing consumer
brand confusion. If no such confusion results, there is very little likelihood that rival
advertisers who purchase keywords of their competitor’s trademark would be held to
have breached the indicating origin or advertising functions of the latter’s trademark.
II(b)(3) – Investment Function
Pertaining to the investment function, the ECJ has noted expressly in Interflora that a
trademark may also be capable of attracting customers and retaining their loyalty
based on the acquired reputation of the trademark. In such a situation, use of a
trademark may be prohibited if such third-party use substantially interferes with the
proprietor’s use of the trademark to acquire or preserve a reputation capable of
attracting consumers and retaining their loyalty. Interestingly, however, the ECJ goes
on to consider the relation between the function of indicating origin and the investing
function of a trademark as follows:
“However, it cannot be accepted that the proprietor of a trade mark may – in
conditions of fair competition that respect the trade mark's function as an indication of
origin – prevent a competitor from using a sign identical with that trade mark in
relation to goods or services identical with those for which the mark is registered, if
the only consequence of that use is to oblige the proprietor of that trade mark to adapt
its efforts to acquire or preserve a reputation capable of attracting consumers and
retaining their loyalty. Likewise, the fact that that use may prompt some consumers to
switch from goods or services bearing that trade mark cannot be successfully relied on
by the proprietor of the mark”. 25
The above guidance seems to indicate once again a high threshold in determining
whether the investment function of a trademark has been infringed. What is more
interesting, however, is the ECJ’s relation to the function of indicating origin in the
first sentence. This seems to be an implicit recognition by the ECJ that the way to
balance the inherent tension between trademark owners and competitors is to ensure
that the function of indicating origin of the trademark is not infringed. Once it is clear,
however, that the function of indicating origin has not been infringed, the courts will
only examine whether the other functions (i.e. advertising and investment functions)
of the trademark has been infringed to the extent that it has been used for those other
functions. Even so, the ECJ has set a high threshold for these other functions to be
regarded as having been infringed so as to balance the interests between free
competition and trademark protection. The very fact that the ECJ has provided
detailed guidance to competitors as to what constitutes infringement of the other
functions, but on the other hand has failed to do the same for trademark owners,
supports the assertion that the ECJ is not as concerned about the infringement of the
other functions of the trademark and that the practical effect of its judgments is that
the use of Google AdWords is allowed as long as it does not result in consumer brand
confusion. Moreover, as pointed out by the UK Court of Appeal in L’Oreal v Bellure,
it is hard to imagine what is to be regarded as infringement of the investment function,
25 Supra Note 20, at [64].