TRADEMARK – THE USE OF A THIRD PARTY’S TRADEMARK IN A SPONSORED AD OR IN THE SOURCE CODE OF A WEBSITE MAY CONSTITUTE AN INFRINGEMENT

Cass. Com., 18 oct. 2023, n° 20-20.055: the French Supreme Court has clarified the criteria for establishing infringement when a third party reproduces a competitor’s trademark as part of a paid search engine listing.

It also held that such reproduction in the source code of a website – and therefore not visible by the consumer – constitutes an infringement, contrary to several judgments handed down by the lower courts.

Search Engine Optimization (SEO) is a key factor in the marketing of products and services. The courts have come to regulate the use of a third party’s trademark in this context, as such use may be authorized subject to compliance with certain criteria.

SEO refers to all practices designed to ensure that a website appears in the first results of a search on a search engine such as Google or Bing.

The following distinctions are made in particular:

• Natural referencing: it includes all the criteria taken into account by search engine algorithms to identify the most relevant sites in a search, such as the frequency with which sites are consulted, the presence of hypertext links in the site’s content, or its source code.
• Paid referencing: a third party buys a keyword from a search engine, such as a competitor’s trademark, in order to make its own website appear as the first result when a consumer searches for that keyword.

For example, the keyword “Google Ads” on www.google.com displays an advertisement composed of a title, a URL link and a description:

Example of an advertisement – paid referencing

• Facts of the case

The companies AQUARELLE, operators of a website specializing in the sale of flowers, initiated an infringement action against the company SCT, on the grounds that the latter was using their trademark “AQUARELLE” as a keyword for natural and paid referencing purposes. 

More specifically, company SCT had:

• purchased the keyword “AQUARELLE” from Google. In a search, a link entitled “Bouquets Toutes Occasions – lebouquetdefleurs.com” appeared in 1^st with the URL address www.lebouquetdefleurs.com belonging to the company SCT and a description of the flower delivery business (“livraison, bouquet, fleurs, fraîches, France…”). The words “official site” were also present in the ad;

• reproduces the AQUARELLE trademark in the source code of its website, thus improving its ranking in search results (not visible by the consumer from the search engine).

The Court of Appeal rejected the existence of infringement on these two grounds, following which the AQUARELLE companies appealed before the French Supreme Court. 

• The French Supreme Court’s criteria for establishing infringement

On the basis of Article 9 of Regulation (EU) no. 207/2009 and Article 713-2 of the French Intellectual Property Code, the French Supreme Court dismissed the appeal lodged by the companie AQUARELLE, and clarified the criteria that must be met in order to establish infringement, particularly with regard to the reproduction of a trademark in the source code.

• Regarding paid referencing, the criterion of reproduction of the trademark in the advertisement has been replaced by the criterion of risk of confusion.

The French Supreme Court upheld the decision of the Court of Appeal, which had ruled out the risk of confusion.

Above all, it validates the fact that the Court of Appeal “did not limit itself to analysis the absence of use of the AQUARELLE sign in the advertisement” to rule out infringement.

In other words, the simple fact of not reproducing the trademark in the advertisement may not be enough to rule out infringement, which until now has been the main criteria used by the lower courts to decide whether or not to sanction the adversiment.

It is now necessary to ensure that there is “no risk of confusion due to the use of the sign AQUARELLE (…) as a keyword in the Adwords referencing system“.

This is the case here, since the Supreme Court notes that the appeal judges emphasized that :

• “The [disputed] advertisement was immediately followed by the “Aquarelle.com” advertisement;
• “no use is made of the sign “AQUARELLE”, either in the advertisement itself, or in the link, or in the URL address”.
• “The advertisement uses common terms to describe the business of delivering flowers ordered online.
• “[it] expressly displays the name of the site [https://lebouquetdefleurs.com/]”.

According to the Supreme Court, these clues ensured that there was no risk of confusion for Internet users as a result of SCT’s use of the AQUARELLE sign.

The risk of confusion in terms of referencing will therefore be assessed on a case-by-case basis, taking into account not only the advertisement itself, but also its context.

However, the judges do not specify whether, a contrario, the reproduction of a trademark within the advertisement is sufficient in itself to characterize the risk of confusion.

• Regarding the reproduction of the trademark in source code, the criterion of trademark visibility is replaced by the criterion of likelihood of confusion

In the past, the Courts have been reluctant to characterize infringement when a trademark was used in the source code of a third-party website.

For example, in 2023, the Paris Court of Appeal ruled out infringement on the grounds that the source code “is invisible to the consumer (…) who, when consulting a website, does not go to this page relating to the computer content of the source code, which is unrelated to the products and services marketed on the said website“^[1] .

In this case, the Court of Appeal had rejected the infringement claimed by the companies AQUARELLE on the grounds that “as the sign is not visible to the public, it is not used in the source code to designate products and services“.

The French Supreme Courtupheld the rejection, but corrected the Court of Appeal’s motivation, holding that “the trademark owner may prohibit the use of a sign by a third party in the source code of its website, even if it is not visible to the public”.

The French Supreme Court therefore rejected the criterion of public visibility of the trademark.

Instead, it substitutes the likelihood of confusion criterion, indicating that it is necessary to consider whether the search result “does not allow, or allows only with difficulty, the average Internet user to know whether the goods or services targeted by the natural referencing originate from the trademark owner or from a company economically linked to the owner or, on the contrary, from a third party“.

In this case, the Court of Appeal found that “the average Internet user was informed about the origin of the site (…), thus demonstrating the absence of any risk of confusion about the origin of the products and services offered“, so that there were no grounds for cassation.

In opting for this new criterion of likelihood of confusion, the French Supreme Courtis moving closer to the interpretation of the Court of Justice of the European Union set out in the case “Google” ruling, which dealt with paid referencing.

The European judges ruled that the use of a third party’s trademark as a keyword could constitute an infringement if “the advertisement does not enable, or enables only with difficulty, the normally informed and reasonably attentive Internet user to ascertain whether the goods or services referred to in the advertisement originate from the trademark owner or an undertaking economically linked to it or, on the contrary, from a third party“^[2] .

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[1] CA Paris, April 19, 2023, no. 21/17661

[2] CJEU, March 23, 2010, Google, C-236/08