E-Commerce Law Week, Issue 580

EU Sends Conflicting Messages on Keyword Advertising

Two legal opinions in the European Union have reached conflicting conclusions about whether the use of trademarked terms in keyword advertising constitutes trademark infringement.  The Paris Tribunal de Grande Instance (TGI) found eBay, Inc., and eBay International AG liable for “counterfeiting” the trademarks of four LVMH Moët Hennessy Louis Vuitton, S.A. ("LVMH") subsidiaries by purchasing those companies’ trademarked phrases to use as keywords on search engines to draw users to eBay’s auction site.  But a few days after the TGI ruling, an Advocate General (AG) of the European Court of Justice (ECJ) issued an advisory opinion in a similar case LVMH had brought in France against Google, Inc., and Google France regarding Google's AdWords program.  The AG opined that Google had not committed trademark infringement by selling trademarked terms as keywords to websites selling counterfeit products, and also that Google should not be considered a "contributory" infringer for facilitating third-party infringement.  The AG also stated that advertisers do not infringe trademarks by purchasing those marks as keywords.  Should the ECJ follow the advisory opinion, its ruling would likely contradict the TGI ruling against eBay and give eBay strong arguments in its appeal of that ruling.  More broadly, the conflicting opinions highlight the opposing views that exist globally on how to regard use of trademarked terms as keywords.

France's Data Protection Authority Issues Data Security Recommendations

France's data protection authority, the Commission Nationale de l'Informatique et des Libertés (CNIL), has issued ten recommendations for information technology security that the CNIL says organizations should implement in order to ensure compliance with France's Law on Information Technology and Liberties (Law 78-17 of 1978, updated 2004).  The recommendations come at a time when the CNIL is increasing its on-site privacy and data security audits.  The audits have been taking a closer look at businesses' marketing technologies, video-surveillance, and biometric identification.  With the issuance of these recommendations, audits will also be used to verify that organizations have implemented necessary security measures. 

Courts At A "Loss" As To How To Interpret the CFAA

A federal court in Kansas ruled in The Paradigm Alliance, Inc., v. Celeritas Technololgies, LLC, that fees paid to investigate alleged unauthorized computer access constitute "loss" within the meaning of the Computer Fraud and Abuse Act (CFAA) and that a claim based on such loss can therefore survive a motion for summary judgment, even without evidence of damage to a computer.  But, in TelQuest International Corp. v. Dedicated Business Systems, Inc., a federal court in New Jersey issued a contradictory ruling, finding that fees for an investigation into the alleged computer misconduct of a disloyal employee cannot support a CFAA claim.  The conflicting rulings highlight courts' continued disagreement over whether damage to a computer must be demonstrated in order to support a civil claim under the CFAA.

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