Recent court decisions around the world have attempted to make sense of the conditions under which advertising service providers can sell ‘keywords’ to third parties. While the courts aim was to clarify the legal framework, they have also created some controversy among brand owners. Christopher Coulter and Deirdre Moynihan, of Morrison & Foerster, analyse recent ‘adword’ evolutions, with particular focus on the EU.

‘If it has not played such a role, that service provider cannot be held liable for the data which it has stored at the request of an advertiser, unless, having obtained knowledge of the unlawful nature of those data or of that advertiser's activities, it failed to act expeditiously to remove or to disable access to the data concerned’1.

The tension between keywords and trade mark owner rights

As is now well-known, some online keyword advertising service providers sell certain words to advertisers (‘keywords’). Generally, these keywords prompt the display of a ‘sponsored link’ or sponsored advertisement when the words are typed into a search engine. In this way, advertisers can enhance traffic flow to their goods and services, and advertising service providers and search engines can derive advertising revenues. So, for example, in Google's Adwords service, a ‘sponsored link’ is displayed when the keyword is typed into Google's search box. The sponsored link is accompanied by a short message promoting the advertiser's business. A number of advertisers can reserve the same keyword and if a number of advertisers have reserved the same keyword, the order in which the sponsored links are displayed is determined according to the maximum price per click, the number of previous clicks on those sponsored links and the quality of the ad as assessed by Google2.