In a previous article2 we highlighted the decision made by the Appeal Court in Paris3 in which Cobrason’s claims were upheld against Google and the ‘Solution’ company for unfair competition and misleading advertising. This stemmed from the appearance of an advertizing link directing Internet users to the latter’s website when searches using the key word “ Cobrason” were made in the context of an Adwords campaign.
This verdict did not appear to us to reflect the position of the CJUE4 and we questioned its wider impact. The response to this question has just been given by the Court of Cassation which, in its judgment of 29 January 2013, overturns and invalidates the aforementioned Appeal decision.
The High Court criticizes the Appeal Court for having accepted that the ‘Solution’ company had committed acts of unfair competition “without identifying elements that could lead to a risk of confusion between the Internet sites of the two companies whereas the canvassing of other client bases is legitimate if unfair methods are not proven”. The Court further criticized the judges for finding the Solution company responsible for misleading advertizing, commenting that they had determined “with improper motives to label an advertisement as false or as designed to mislead based on one or several of the element listed in article L.121-1 of the Consumer Code”.
This confirms the position adopted by the Court of Cassation in its decision of 25 September 2012 in which it indicated that once advertisements are clearly separated from normal search results and provided that they are sufficiently clear, they will naturally enable the average Internet user to realize that the products or services targeted are not being offered by the right holder. The use of a trademark or social label as a key word by a competitor in the context of a campaign by Adwords is therefore not illegal.
A few days later, the High Court of Australia5 also ruled that Google could not be the author of adverts displayed by its search engine since the average user understands that this advertising comes from third parties and is in no way adopted or validated by Google.
The Court of Cassation also corrected the Appeal judges on the question of Google’s liability. In effect, in its first findings, it censured the Appeal Court decision due to its lack of response to Google’s conclusions which were based on the regime of limited responsibility of hosts according to article 6.1.2 of the LCEN. In so doing the Court of Cassation confirmed the position it had adopted in its three verdicts of 13 July 2010 in which it had found Google not responsible for acts of counterfeit based on the same article.
This decision serves as a firm reminder addressed to the Appeal judges that again outlines the necessary requirements before liability can be proven against advertisers using the Google Adwords advertizing system. Moreover, by deciding that if Google’s responsibility can be examined but may only be upheld in limited cases where the latter’s activity does not comply with the conditions necessary to benefit from the limited responsibility outlined in article 6 of the LCEN, the High Court is confirming that it’s the responsibility of advertisers that should be the primary focus.
1 Cass. Com., 29 janvier 2013, Solution / Google, Cobrasons
3 Paris Appeal Court 11 May 2011, Google France et Inc., Home Cine Solutions / Cobrason
4 CJUE, 23 March 2010 cases C-236/08, C-237/08 and C-238/08: in which the European Court indicated that in order to benefit from the regime of limited responsibility, the host’s activity must be by definition “purely technical, automatic and passive”.
5 High Court of Australia, 6 February 2013, Google Inc v Australian Competition and Consumer Commission  HCA 1, 6 February 2013, S175/2012.