Are you paying for sponsored links on a search engine and using a competitor’s trademark as a search term? If so, you could be liable for trademark infringement following the recent European Court of Justice ruling in the decisions in Google France SARL, Google Inc. (C-236/08 to C-238/08) 23^rd March 2010.

Who is the Trademark Infringer?

All over Europe trademark owners have been trying to stop competitors and advertisers from using their trademarks as search terms in sponsored links on Google. Many trademark owners have started trademark infringement claims against search engine providers and the advertisers who use their trademarks in Google adwords as search terms.

In this decision Google was not held liable for a trademark infringement, on the basis that Google were not “using “ the trademark and were simply creating the technical conditions for advertisers  to “use” the trademark. However, it does not mean that the advertiser is not committing a trademark infringement. The Court said that the advertiser could be liable for trademark infringement where key words which are trademarks are used in order to generate sponsored links to websites offering identical goods and services, if the advertisement did not make clear to the average Internet user that the goods and services did not come from the owner of the trademark, or an undertaking economically connected with the trademark owner.

What should Trademark Owners do?

You should carefully monitor any sponsored links appearing in search results for your trademarks. If you think that the sponsored link is confusing Internet users about who is actually providing the goods and services, notify Google (or other search engine provider concerned). Once the search engine provider/Google, has actual notice of the unlawful nature of the sponsored link it should act quickly to remove or disable access to the sponsored link, or it could be liable for publishing the data.

Alternatively, you can initiate trademark infringement proceedings against the search engine provider and the advertiser.

What should Advertisers do?

If a trademark owner initiates a trademark infringement claim against an advertiser in the UK, the UK courts must decide whether or not a trademark infringement has taken place.

Therefore in order to avoid this risk, if you plan to use the trademarks of your competitors as search terms in sponsored links, the link and the advertisement must sufficiently distinguish you from the trademark owner, or you could be liable for trademark infringement.

The sponsored link should not cause confusion in the mind of the average Internet user as to whether or not the goods and services are being provided by the trademark owner.

Help

For assistance with trademark issues or any other IT legal issues contact:

irene.bodle@bodlelaw.com
www.bodlelaw.com

To register for my newsletter click here

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SaaS suppliers often prepare sales proposals in order to win business from prospective clients. A few basic legal clauses should be included in the sales proposal to protect your business if you win the sale, but more importantly, if you don’t.

Prices

There can be a substantial time delay between sending a client a proposal and actually negotiating the terms of the SaaS agreement. The proposal may also include pricing for optional additional functionality, that the client may want to  order a later stage. The proposal should state dates for the validity of the various prices quoted, otherwise you could be obliged to provide functionality in 2012 for 2010 prices.

SaaS Agreement Terms and Conditions

The proposal should state that the software and services will be sold subject to the supplier’s standard terms and conditions. This is particularly important for SaaS applications. Often client’s – who are usually not software suppliers and who supply physical goods – will want to use their own standard terms and conditions. These will not work for a SaaS agreement as the software is not a physical good (and for many other reasons which will not be elaborated here). If the client’s terms and conditions are used – a situation which should be strongly resisted – they will need to be substantially amended, which will waste time and expense. If you already have suitable terms and conditions in place then it makes commercial sense for both parties to use these as the basis of the SaaS agreement.

More importantly – always specifically state in the proposal that your SLA (service level agreement) will apply. This sets out the hosting, maintenance and support services that you will be providing to the client. As you will usually be using a third party hosting centre to provide the majority of these services, the SLA must reflect the level of services that you yourself receive from the hosting centre. It makes no commercial sense to use an SLA provided by the customer, as you will not be able to comply with this.

Confidentiality

It is imperative that you obtain the client’s undertaking to treat all information provided to them by you during the sales process  – including any documents referred to in the proposal – as confidential.  You will probably have given the client copies of your price lists,  functional descriptions of your software and other internal documents which you do not want third parties to see. This is particularly important if the proposal does not lead to a sale and the client is speaking to your competitors… The client should agree to keep all information confidential and to return all of your confidential information immediately, if no sale is agreed.

No Obligation to Supply

The proposal should state that it is not legally binding and does not create any obligation on your part to provide the software or services to the client. Often between the proposal stage and the actual terms of the SaaS agreement being negotiated, your client’s requirements will have changed. You do not want to be bound by the terms and prices, in the proposal if the client has changed the basic scope of the services or the functionality.

Help

Irene Bodle is an IT lawyer specialising in SaaS agreements with over 10 years experience in the IT sector. If you require assistance with any SaaS, ASP, software on demand contracts or any other IT legal issues contact me:

irene.bodle@bodlelaw.com
www.bodlelaw.com

To register for my newsletter click here

______________________________________________________

Other related articles:

• SaaS, ASP Agreements – Essential Elements
• SLAs Explained – Essential Elements
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• SaaS, ASP Agreements – FAQs – Escrow
• SaaS, ASP Agreements – FAQs – Data Protection
• Cloud Computing and the Legal Cloud
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The benefits of SaaS (software as a service) applications to customers are numerous. They include:

• customer collaboration
• access anytime/anywhere,
• no need to install programmes and updates,
• number of users can be increased or decreased easily
• more functions and modules can be quickly and easily added
• reduced need for internal IT
• saving in professional time

Customer Collaboration

Often customer portals are included in the SaaS application which enables the customer to share information with its clients.

Access Anytime, Anywhere

SaaS applications are usually hosted on the software supplier’s servers. This enables the customer to be able to log in and work with the software application and customer data from work, home, other computers or whilst travelling, via mobile devices.

Reduced need for Internal IT Resources

Small and mid-sized firms, unlike large firms do not usually have large internal IT expertise.  By using SaaS applications the need to install, reinstall, update and generally deal with ever changing technological issues is avoided. The supplier automatically deals with all of these issues on your behalf. This saves the customer time and the expense of troubleshooting themselves or hiring external assistance.

Help

Irene Bodle is an IT lawyer specialising in SaaS agreements with over 10 years experience in the IT sector. If you require assistance with any SaaS, ASP, software on demand contracts or any other IT legal issues contact me:

irene.bodle@bodlelaw.com
www.bodlelaw.com

To register for my newsletter click here

______________________________________________________

Other related articles:

• Cloud Computing and the Legal Cloud
• SaaS, ASP, Software on Demand – Confused?
• SaaS, ASP Agreements – Essential Elements
• SLAs Explained – Essential Elements
• SaaS, ASP Agreements – FAQs – Security
• SaaS, ASP Agreements – FAQs – Confidential Information
• SaaS, ASP Agreements – FAQs – Software Licence
• SaaS, ASP Agreements – FAQs – Source Code and Object Code
• SaaS, ASP Agreements – FAQs – Escrow
• SaaS, ASP Agreements – FAQs – Data Protection