Archive for the ‘Media & Entertainment’ Category

BBC vs. “The Stig” (Round 1?)

Friday, August 20th, 2010

Any Top Gear fans out there? If so, you might be interested in reading on…

Yesterday, I was asked by the Daily Telegraph to comment on an interesting case between the BBC and the person who plays the character on the programme Tog Gear known as “The Stig”.

The full details of the matter cannot be revealed publicly (you can read further here: http://www.telegraph.co.uk/motoring/news/7954523/BBC-facing-human-rights-battle-with-Top-Gears-The-Stig.html), however, the matter may potentially lead to a clash between the basic principles of Contract Law and Breach of Confidence, on the one hand, and the basic human right of Freedom of Expression as enshrined in the Article 10 of European Convention of Human Rights (enforceable in the UK under the Human Rights Act 1998), on the other.

Under Article 10, “Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by a public authority and regardless of frontiers. This Article shall not prevent states from requiring the licensing of broadcasting, television or cinema.”

The Convention continues; “The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for the maintaining of the authority and impartiality of the judiciary.”

Article 10 protects your right to freedom of expression. This includes the right to hold and express opinions yourself as well as to receive and impart information and ideas to others.

Prior to the Human Rights Act, the right to freedom of expression was a negative one (you were free to express yourself, unless the law otherwise prevented you from doing so). With the incorporation of the European Convention on Human Rights into English domestic law, the right to freedom of expression is now expressly guaranteed, albeit qualified by section 2 above.

In Handyside v UK (1976) the ECHR stated that freedom of expression constituted one of the essential foundations of a democratic society and one of the basic conditions for its progress and development of every person. It also made clear that Article 10 applied not only to information or ideas that are favourable and inoffensive but also to those that offend, shock or disturb the State or a sector of the population.

However, where an interference with expression has concerned anti democratic ideas and extreme right wing views contrary to the text and spirit of the Convention, the ECHR has varied between excluding the expression from the scope of Article 10 altogether or concluding that the interference is justified by Article 10(2).

The right to freedom of expression in Article 10 is not an absolute right. It is a qualified right. This means that formalities – including Contract Law as laid down by each member state, conditions, restrictions or penalties may be imposed on the exercise of this right if they are prescribed by law, pursue a legitimate aim and are necessary in a democratic society. This latter condition requires the means employed to be necessary and proportionate to the aim pursued. The legitimate purposes for which freedom of expression can be limited are set out in Article 10(2) set out above (see also section headed ‘A qualified right’ under Article 8).

At this stage it is unclear as to whether a challenge to the contract between the aforementioned parties under Human Rights law will be pursued by the “man behind the mask”. He may have a case, but then again, so does the BBC!

Article 10: Right to freedom of expression

1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by a public authority and regardless of frontiers. This Article shall not prevent states from requiring the licensing of broadcasting, television or cinema.

2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for the maintaining of the authority and impartiality of the judiciary.

Article 10 protects your right to freedom of expression. This includes the right to hold and express opinions yourself as well as to receive and impart information and ideas to others.

Before the Human Rights Act came into force, the right to freedom of expression was a negative one: you were free to express yourself, unless the law otherwise prevented you from doing so. With the incorporation of the European Convention on Human Rights into English and Welsh domestic law, the right to freedom of expression is now expressly guaranteed.

In Handyside v UK (1976) the ECHR stated that freedom of expression constituted one of the essential foundations of a democratic society and one of the basic conditions for its progress and development of every person. It also made clear that Article 10 applied not only to information or ideas that are favourable and inoffensive but also to those that offend, shock or disturb the State or a sector of the population.

However, where an interference with expression has concerned anti democratic ideas and extreme right wing views contrary to the text and spirit of the Convention, the ECHR has varied between excluding the expression from the scope of Article 10 altogether or concluding that the interference is justified by Article 10(2).

The right to freedom of expression in Article 10 is not an absolute right. It is a qualified right which means that formalities, conditions, restrictions or penalties may be imposed on the exercise of this right if they are prescribed by law, pursue a legitimate aim and are necessary in a democratic society. This latter condition requires the means employed to be necessary and proportionate to the aim pursued. The legitimate purposes for which freedom of expression can be limited are set out in Article 10(2) set out above (see also section headed ‘A qualified right’ under Article 8).

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Misleading websites – OFT takes action

Friday, August 13th, 2010

Having registered for a European Health Insurance Cards (EHICs) on the NHS website earlier today, the story that three organisations who deceptively sold consumers  EHICs (which allow UK residents to obtain state-funded healthcare in other EU member states and are available free of charge from an NHS website) have given undertakings to the OFT under the Consumer Protection from Unfair Trading Regulations 2008 (CPRs).

Background on the Law

Consumer Protection from Unfair Trading Regulations

The Consumer Protection from Unfair Trading Regulations (SI 2008/1977) (CPRs) generally prohibits unfair commercial practices. A commercial practice is unfair if it contravenes the requirements of professional diligence and materially distorts the economic behaviour of the average consumer in relation to a product (or is likely to do so) (regulation 3, CPRs).

Commercial practices are misleading if they give false information which deceives (or is likely to deceive) the average consumer and causes or is likely to cause him to take a transactional decision that he would not otherwise have taken (even if the information given is factually correct) (regulation 5, CPRs).

Commercial practices are misleading if, taking into account the circumstances of the commercial practice and the medium used to communicate it, they omit, hide, disguise or delay material information so as to cause the average consumer to take a transactional decision that they would not otherwise have made (regulation 6, CPRs).

Electronic Commerce (EC Directive) Regulations

The Electronic Commerce (EC Directive) Regulations 2002 (SI 2002/2013) provide that website operators must provide certain information in a form and manner which is easily, directly and permanently accessible (regulation 6, E-Commerce Regulations).

Facts

European Health Insurance Cards (EHICs) provides UK residents with access to state-provided healthcare when they visit another EU member state. UK residents can obtain an EHIC free of charge from the NHS.

Five online traders were offering the EHIC, typically charging £10 per application without clearly stating that they were not the official NHS website. The OFT launched an investigation after complaints were made to the Department of Health and Consumer Direct.

The websites claimed to offer a “review and forward” service for the applications, for which they charged the fee. However, many consumers believed that they were using an official site and were unaware that EHICs were available free of charge from the NHS.

Most search engines use keyword advertising, via which an advertiser can have its messages displayed beside natural search results. Certain websites had purchased sponsored search engine links and therefore featured prominently when consumers searched for EHIC. There are ongoing proceedings in various European countries about such activities, which are often brought under trade mark or passing off/unfair competition laws. (Please see my previous blog post on this subject)

OFT Action

The OFT determined that these organisations had breached regulations 3, 5 and 6 of the CPRs and regulation 6 of the ECRs because they were misleading in their presentation. The websites mimicked the EHIC brand, used an official-sounding domain name and omitted important information by failing to clearly disclose that they were not the official provider of EHICs.

Three traders have signed formal undertakings not to engage in deceptive selling practices. A fourth had its website domain suspended by its domain name registrar and the fifth voluntarily ceased trading.

The OFT will monitor the organisations’ activities and, if they breach the undertakings, it may take court action including applying for an enforcement order under the Enterprise Act 2002.

Gregory Abrams Davidson LLP

If you or your business have any questions relating to Corporate or Media Law matters and would like a free consultation with a member of our Corporate or Media Law Teams, please contact us on 020 8209 0166. If you prefer, you can contact us by email at jabrams@gadllp.co.uk.

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Social Media: Keep It Clean… Even Between Friends

Monday, August 9th, 2010

On Wednesday July 27th, Metro.co.uk published the story about how a student won £10,000 in damages from a former friend after suing for libel over a Facebook “Joke” that went badly wrong.

Raymond Bryce, a law student, failed to see the funny side of former friend, Jeremiah Barber’s post of a paedophiliac picture on his Facebook page with the words “Ray, you like kids and you are gay so  bet you love this picture, Ha Ha”.

Mr. Bryce, who suffers from Asperger Syndrome said more than 800 people would have been able to view the page and that he was too scared to leave his home because he did not know who had seen it.

The posting caused a great deal of stress for both him and his family and Bryce duly sued Barber in the High Court for libel and won damages.  Barber ended up with a large money Judgment against him, a conviction for circulating indecent images of children and 150 hours’ community service… Not a laughing matter!

This is yet another illustration of how some people underestimate the power of the internet and social media from a legal context. Many users seem to forget (or are not aware) that defaming another person and publishing that defamation is libel, whether in print, using posters or through social media. In fact, due to the “targeted” nature of social media, Dr Ian Brown, from the Oxford Internet Institute, argues that it is “worse in some ways than putting offensive posters on lamp posts because it’s going directly to your friends”.

Issues For Employers

Consider the above scenario in a business context. What if employees use their employer’s computer to access Facebook? What if or defamatory comments are placed upon a corporate Facebook page, twitter account, blog?  In such a situation the victim would probably be advised to sue both the individual who posted the comment and the company for not taking action: it is usually going to be more likely that the company has deeper pockets to make a payment and will chose to settle sooner rather than later.

In law a company can be held “vicariously liable” for the actions of its employees. For instance, the employer of a delivery driver who knocks over and injures a pedestrian whilst on his rounds will be sued alongside the employee driver.  So what about an employee who posts inappropriate material at work? One answer would be for the company to argue that the employee was not acting in the course of his work duties that he was, in the legal phrase, “on a frolic of his own”.  However, things aren’t so simple.

The case of Lister & Ors v Hesley Hall Ltd [2001] UKHL 22 dealt with the issue of vicarious liability, specifically, when it will be appropriate to place liability upon the employer.  The House of Lords held that the employer could be held liable for the action of an employee where it was held that the employer should be held vicariously liable where the act complained of is reasonably incidental to the type of business carried on. In the later case of Dubai Aluminium Co Ltd v Salaam & ors HL 2003 IRLR 608, Lord Nicholls said that for vicarious liability to be established the act complained of “must be so closely connected with acts the partner or employee was authorised to do that, for the purpose of the liability of the firm or the employer to third parties, the wrongful conduct may fairly and properly be regarded as done by the partner while acting in the ordinary course of the firm’s business or the employee’s employment”.

This should protect an employer in the Bryce – Barber type scenario above.  If an employee posts defamatory material on his personal PC in his own time that should not impact on the employer unless the company is specifically mentioned or linked in some way.  However, if the employee has been specifically authorised by the employer to tweet, blog or update Facebook, Myspace (does anybody still use Myspace??) etc. to market the business and libels a third party, it could be argued that the business should have controlled the employee’s actions and is therefore vicariously liable. Worse still, if the employee is home-based, the company may be held liable and could end up with a nasty bill, which may not be covered by the employers’ liability insurance policy.

Risk Reduction

What the prudent employer ought to do:

1) Social media usage policy: This sets out what is acceptable and what is not. Ideally, this would include a prohibition on disseminating any inappropriate or pornographic images or text and state that the employer will not tolerate any misuse of its social media networks that would breach the confidentiality of it or its clients or cause embarrassment or financial loss to them. (NOTE: There is no reason why that restriction should not extend to employees’ use of social media in their home life.) The policy should also make it clear that any breaches will be treated seriously and may constitute a disciplinary offence leading to dismissal for gross misconduct.   This will enable an employer to argue, should the need arise, that the employee was not authorised to make the comment. (PLEASE CONTACT ME IF YOU REQUIRE A NEW SOCIAL MEDIA USAGE POLICY)

2) Publication: There is a growing trend amongst many companies to publish their Social Media Usage Policy; providing clients, customers and other stakeholders with a degree of comfort about the employee actions and management in this area.

3) Monitoring: The employer should monitor their networks to make sure any offending articles or comments are removed as soon as possible.

4) Access: Limit to a few individuals.

5) Password Protection: The employer should ensure that its own social media profile passwords are kept confidential by those with access. If necessary, change passwords every few months.

6) Reputation: Keep an eye on what is out there. There could be a disgruntled former employee or an unhappy client or customer who sets up a false page and decides to defame others. Although you may be able to proved that the page or site is a fake and you won’t be held “vicariously liable”, it may have damaging effects to your reputation!

7) An Outright Ban?: Some (including Dragon Theo Paphitis) might argue that the solution is to ban social media from the workplace. The recent news story that social networking websites are costing the British economy up to £14 billion a year in lost working time might add substance to that argument.

However, whilst I can understand why certain businesses would want to ban the use of social networks – they are a time consuming distraction – the fact that they are important promotional and communication tools would trump this argument. (Indeed, due to the proliferation of mobile technology into our daily lives, a company would need to go the unlikely extra length of prohibiting its employees from bringing their smartphones to work, in order to fully enforce its social media  ban!)  Instead, I would contend that good management and a sound usage policy (see 1 above) will keep your employees happier… and hopefully, your customers satisfied.

If you or your business have any questions relating to Media Law or Reputation Management matters and would like a free consultation with a member of our Media Law Team, please contact us on 020 8209 0166. If you prefer, you can contact us by email at jabrams@gadllp.co.uk.

About GAD LLP’s Media Law Practice:

Gregory Abrams Davidson’s Media Department is experienced in acting for a variety of media, technology and entertainment companies, celebrities, sports personalities, investors and professionals involved in the sector.We cover many media-focused legal issues, including reputation management, privacy and defamation, Intellectual Property, Entertainment, I.T., telecommunications and E-Commerce, film, TV, music and publishing. We provide a reliable and efficient service, constantly striving to provide practical, commercial, cost-effective legal advice to achieve the right result for our clients in the shortest possible time.

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Advertising: The Never Ending Story

Friday, June 25th, 2010

Advertising Standards Authority (”ASA”) upholds complaint about “never-ending sale”

The ASA has upheld a complaint about an advertisement for a “retiree’s” clearance sale which did not have an end date.

The supposed “retiree” took out a regional press ad for Scarborough Racing Developments, stating “CLEARANCE SALE (RETIREMENT) Everything must go!”

The complainant – a reader of the regional paper – challenged the ad, contending that the claim was misleading and could not be substantiated. The reader said that the ad had appeared for more than a year and during that period, the advertiser had continued to buy stock.

The advertiser blamed the poor economic climate for the fact that his retirement process was taking longer and claimed he had to re-stock every-day consumables to help clear slow-moving items. He also said he had sought advice from his local trading standards authority (”TSA”) in connection with his advertisement and believed it was in line with their guidance.

The TSA informed the ASA that they did not consider it reasonable for the ad to still be appearing after 18 months.

Due to the sale continuing for longer than 6 to 12 months and the advertiser continuing to re-stock some items, the ASA ruled that the ad breached rules 7.1 (Truthfulness) and 16.8 (Availability of products) of the CAP Code.

The bottom line and the advice that I give to my clients, is that advertising sales without an end date, or claiming that you are about to cease trading when you are not, is likely to be an offence under the Consumer Protection from Unfair Trading Regulations 2008… Don’t do it, unless of coarse, it’s the truth!

If you or your business have any questions relating to Commercial or Media Law matters and would like a free consultation with a member of either Team, please contact us on 020 8209 0166. If you prefer, you can contact us by email at jabrams@gadllp.co.uk.

About GAD LLP’s Media Law Practice:

Gregory Abrams Davidson’s Media Department is experienced in acting for a variety of media, technology and entertainment companies, celebrities, sports personalities, investors and professionals involved in the sector.We cover many media-focused legal issues, including reputation management, privacy and defamation, Intellectual Property, Entertainment, I.T., telecommunications and E-Commerce, film, TV, music and publishing. We provide a reliable and efficient service, constantly striving to provide practical, commercial, cost-effective legal advice to achieve the right result for our clients in the shortest possible time.

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BP + PR = :-(

Tuesday, June 15th, 2010

In an interview with a US news website Politico, US President Barack Obama drew an anology between the BP oil spill and 9/11,  declaring; “…In the same way that our view of our vulnerabilities and our foreign policy was shaped profoundly by 9/11…I think this disaster is going to shape how we think about the environment and energy for many years to come.”

The comparison is an interesting one, yet whilst the full effects of this unprecedented financial, legal, regulatory and environmental crisis are not yet known, there are a few certainties:

1) Almost £60bn has now been wiped off the company’s market value, since the Deepwater Horizon rig sank killing 11 men and triggering the disastrous leak on April 20, and

2) BP’s reputation and corporate structure hangs in the balance, whilst the company’s board, PR reps, crisis managers and engineers scramble to fix the mess.

To this second point, although we have heard the occasional “positive” whisper in the media about increased levels of oil being recovered, sadly for BP, its shareholders, the Gulf State residents and businesses and unforgettably, the region’s marine life, most of the news is negative.

Over the past three weeks, my attention has been drawn to a spoof Twitter news-feed, from the twitter account “@BPGlobalPR”. This is not actually official “BP speak”. The sarcastic news feed has been set up by an individual or group passing themselves off as the BP publicity machine. It is effectively “by the people, for the people”.

“@BPGlobalPR” has been mocking the company with feeds such as; “Just got 100k followers and our oil is headed to Florida. You know what this means… WE’RE GOING TO DISNEYWORLD!” and ”Yes, our ’spill’ is a ‘trickle’ and ‘hurricanes’ are ‘drizzles’. Hope it doesn’t ‘drizzle’ on our ‘trickle’. That’d be a ‘pickle’.”

These are not exactly the messages a company wants to be associated with as it continues to work on containing the oil spill and for good reason, BP hasn’t seen the funny side and has decided to take action by going directly to Twitter. It scored a minor victory, of sorts, as now BPGlobalPR must state on its feed that it is “not associated with Beyond Petroleum”. The official BP account is “@BP_America”.

It appears however, that the damage has been done; BP_America has a mere 13,000 followers, whilst the spoof Twitter stream has over 164,000!

Satirical Twitter accounts are nothing new. Twitter has proven itself to be such a great platform for satire and has developed a very clear policy for parody, commentary, and fan accounts. “Tweeters” can’t use the exact same name as the subject they’re parodying and their bio must explicitly state that the account is not associated with the real person, company, or organization.

What this episode tells us is that (a) we are too reliant on oil! and (b) that businesses and high profile individual who are in the public eye and are therefore public targets, need to be aware of what the public are writing and broadcasting about them as much as possible. We advise a proactive approach, coupled with a robust response at the earliest possible opportunity.

Reputation Management is about both managing reputational risk and knowing how to deal quickly and effectively with a problem as soon as it arises. Remember the words of Theodore Roosevelt: “In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”

If you or your business have any questions relating to Media Law or Reputation Management matters and would like a free consultation with a member of our Media Law Team, please contact us on 020 8209 0166. If you prefer, you can contact us by email at jabrams@gadllp.co.uk.

About GAD LLP’s Media Law Practice:

Gregory Abrams Davidson’s Media Department is experienced in acting for a variety of media, technology and entertainment companies, celebrities, sports personalities, investors and professionals involved in the sector.We cover many media-focused legal issues, including reputation management, privacy and defamation, Intellectual Property, Entertainment, I.T., telecommunications and E-Commerce, film, TV, music and publishing. We provide a reliable and efficient service, constantly striving to provide practical, commercial, cost-effective legal advice to achieve the right result for our clients in the shortest possible time.

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On the topic of Reputation…

Thursday, June 3rd, 2010

Benjamin Franklin was quoted as saying:

“It takes many good deeds to build a good reputation, and only one bad one to lose it.”

In response to recent calls by Liberal Democrat peer and barrister Lord Lester to modernise UK libel laws, I have decided to focus this entry on one element of libel – Reputation.

A good reputation in business is established by gaining and retaining the confidence and trust of a business’s stakeholders (customers (or in the case of Apple Inc., worshippers), suppliers, employees, and of course, shareholders). Although some business reputations may be gained over a relatively short period of time (consider Google and Facebook), most frequently it takes longer to maintain trust and confidence of stakeholders through differing economic cycles.

You need look no further than the recent travails of Toyota and more latterly, BP to realise that business reputations, though hard to win are quickly lost. Loss of confidence by any group of stakeholders, particularly consumers and shareholders, can quickly lead to the decline of any enterprise (though it should be noted that we have no idea as to the long-term impact to both BP & Toyota – time will tell), most strikingly in service businesses such as professional services or finance. Remember Arthur Andersen LLP?

Reputational Risk

Without a reputation, you have no business; therefore reputation is important to any enterprise.

Although reputation is an intangible, it is a highly prized, invaluable asset, which is intrinsically linked to the goodwill of the business. It is viewed as the most critical risk and a key source of competitive advantage as products and services become more replicated and less differentiated.

Good reputational risk management is achieved by managing all other risks satisfactorily. However, changes in business practices arising from increasing governance, red tape, legal and regulatory influences have made companies more vulnerable to reputational damage. Equally, the pervasiveness and intrusiveness of media (particularly social media) and communications industries has intensified the focus on both corporate and high profile individual reputations.

You = Brand

As a celebrity or other high profile individual, you are your brand.

In today’s celebrity-obsessed, paparazzi-filled world, actions are microscopically scrutinised to stalker-esque levels, with the mainstream and social media ready to pounce on the slightest chink in celebrity armour. Although for some, any publicity is good publicity, for others (who shall remain nameless), this is not always the case… their names are added to the proverbial “Where are they now?” lists and consigned to nostalgia conversations and the occasional pub quiz.

Celebrity reputational management is therefore a must in order to retain a degree of control of both on and off-line media. Whether you are selling books, music, movies or lending your voice or likeness to market someone else’s products or services, you are the commodity and – for the benefit of you, your family, friends and other “stakeholders” – your reputation and character must be protected.

Reputational Management Basics

Managing reputations comes from the top. In a business, this runs from the CEO, Board of Directors, senior management downwards. If you are a high profile, public personality, then it starts with YOU.

Key elements of managing reputational risk:

  • Prompt and effective Communication with stakeholders – shareholders, employees, customers, fans (for individuals) and suppliers.
  • Proactive monitoring approach… Prevention is more effective than the cure!
  • For businesses, strong and consistent controls on governance, legal and ethical compliance, which for individuals, can be translated to mean: Don’t break the law.
  • Establish a crisis management team with a clear plan in order to deal with a problem as soon as it arises.

It has been said that “a moment lasts all of a second, but the memory lives on forever.” This is particularly apt when considering reputational risks. Once tarnished, a reputation is difficult to repair and often, other areas of the enterprise will suffer.

If you or your business have any questions relating to legal reputational issues and would like a free consultation with a member of our Media Law Team, please contact us on 020 8209 0166. If you prefer, you can contact us by email at jabrams@gadllp.co.uk.

About GAD LLP’s Media Law Practice:

Gregory Abrams Davidson’s Media Department is experienced in acting for a variety of media, technology and entertainment companies, celebrities, sports personalities, investors and professionals involved in the sector. We cover many media-focused legal issues, including reputation management, privacy and defamation, Intellectual Property, Entertainment, I.T., telecommunications and E-Commerce, film, TV, music and publishing. We provide a reliable and efficient service, constantly striving to provide practical, commercial, cost-effective legal advice to achieve the right result for our clients in the shortest possible time.


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TRADEMARK HIJACKINGS

Monday, May 24th, 2010

Your Brand As A Search Term

ATTENTION BRAND OWNERS: Is your brand being hijacked and used by a 3rd Party as a search engine term?

Following a landmark European Court of Justice (ECJ) decision in the “Google AdWords” case (Google France SARL, Google Inc. (C-236/08 to C-238/08), 23 March 2010), we would strongly advise you to find out.

Background – Natural vs Sponsored Links

When typing a search term into a search engine (such as Google, which alone is responsible for processing approximately 90% of the World’s search queries), the search engine responds by returning a list of sites which appear best to correspond to the search term, in decreasing order of relevance. These responses are known as “natural” results.

In addition to these natural results, the search engine also displays “sponsored” links that are relevant to the term searched.

For example, a search for “Computer” on www.google.co.uk will show “About 746,000,000 results”, with a Wikipedia entry at the top of the pile, in addition to “sponsored links” or paid adverts above and to the right, from Apple, Dell and others. Next to each link will appear a few lines of slightly more descriptive text, which the advertisers hope will encourage you to follow the link. The sponsors pay Google a ‘maximum price per click’ for each sponsored link and the search engine will rank each sponsored link in order; highest to lowest max. price per click, the number of previous clicks on the link, and the quality of the sponsor’s advertisement.

Sponsored Links and Trademarks

If your search term is also a trademark (TM), the problem from the TM owner’s point of view is that users might then click through to the 3rd party website – and not to the TM owner’s website – to buy their products or services.

Instances of this form of TM infringement have led to TM owners taking court action against Google and against the sponsors using their brands as sponsored links. A number of these cases were referred by the French and Austrian national courts to the ECJ, which answered the following key points:

1) Is Google primarily liable for TM infringement on the grounds that it stores the TMs as search terms, and profiting from that storage?

The ECJ ruled a clear ‘no’. (Article 5 of Trade Marks Directive, 89/104 states that for a party to be said to have infringed a TM, they must themselves have used that TM.) By creating the technical environment for 3rd parties to use TMs, Google is not itself “using” the TM, even if it was profiting from the activity.

2) Are 3rd party advertisers liable for TM infringement, on the grounds that they select the TM as a key word and use it to generate sponsored links to websites offering identical goods and services?

The ECJ responded that 3rd party advertisers could potentially be liable, “in the case where the advert does not enable the average internet user, or enables that user only with difficulty, to ascertain whether the goods and services referred to therein originate from the proprietor of the TM or an undertaking economically connected with it or, on the contrary, originate from a 3rd party”.

So, the question to ask is whether “the average internet user” is under the impression that the goods or services advertised in a sponsored link come from the TM holder or someone “economically connected” with them e.g. an exclusive agent or a TM licensee. The ECJ did not specify the exact phases advertisers should use, so this area is still slightly grey. However, the presumption is that by clearly labelling the sponsored link as a separate, 3rd party brand, this is enough avoid confusion.

3) Can Google rely on a defence under Article 14 of the E-Commerce Directive (2000/31), which states that the provider of an “information society service” cannot be held liable for data which is stored at the request of a user?

Under Art. 14, ISPs have a defence to claims in defamation for comments published by users through their services. Correspondingly, do sponsored links constitute an “information society service”, falling into this protected category? The ECJ answered yes, provided that the service provider has not (a) equipped the user with the knowledge of or control over the stored data and (b) removed or disabled access to the data as promptly as possible, if it becomes aware of the unlawful activities. In other words, a search engine could be liable if it is given notice of an advert that infringes a TM and then fails to act quickly to remove it.

Conclusion

Despite what appears to be a successful outcome from the brand owners’ and Google’s perspective, the rulings were not quite as definitive as they could have been and the door is still open for litigation between brand owners and their competitors who continue to use their TMs as search terms. The main question is whether and how the advertisers sufficiently distinguish the competitor from the “Real McCoy”? For the answer to this question, we will need to wait a little longer, perhaps for the ECJ or the national courts to determine, or as is often the case with the web, for the informal online practices to become more established codes of conduct.

If you have own a TM that is being infringed either as a Google Adwords, or otherwise and would like a free consultation with a member of our Media Law Team, please contact us on 020 8209 0166. If you prefer, you can contact us by email at jabrams@gadllp.co.uk.

About GAD LLP’s Media Law Practice:

Gregory Abrams Davidson’s Media Department is experienced in acting for a variety of media, technology and entertainment companies, celebrities, sports personalities, investors and professionals involved in the sector.
We cover many media-focused legal issues, including reputation management, privacy and defamation, Intellectual Property, Entertainment, I.T., telecommunications and E-Commerce, film, TV, music and publishing. We provide a reliable and efficient service, constantly striving to provide practical, commercial, cost-effective legal advice to achieve the right result for our clients in the shortest possible time.

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