The European Court of Justice ("ECJ") has ruled on an Austrian dispute concerning the legality of Google's AdWords system in relation to an alleged trade mark infringement. The decision follows the recent and much-publicised Google France case, in which it was found that it is possible for the display of a sponsored advertising link to mislead an 'average internet user' as to the origins of the goods/services, and therefore could constitute trade mark infringement by the advertiser.

The ECJ strictly followed the guidance that it laid down in response to the Google France case (see our recent Law-Now ) and ruled that, generally, the owner of a trade mark cannot oppose the use of a sign identical or similar to its own mark unless that use is liable to cause detriment to any of the functions of that mark. However, it is always for the national court to decide on a case-by-case basis whether or not the use by a third party of a proprietor's trade mark as a keyword on Google constitutes such detriment, and as such is use that the proprietor should be entitled to prevent.

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Facts

Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmüller GmbH v Günter Guni and another, Case C-278/08, 25 March 2010

The facts of the case were very similar to those in the cases which were referred to the ECJ in the recent Google France case (Google Inc. v Louis Vuitton Malletier, Google France v Viaticum Luteciel and Google v CNHRR (C-236/08, C-237/08, C-238/08)). In this case, Google (who was not a party to the litigation) sold keywords (namely 'Edi Koblmüller' and 'Bergspechte') to the defendant, which when searched for on Google, triggered the display of sponsored links to the defendant's website, which advertised 'trekking and nature tours'. The claimant, however, who also sold 'trekking and nature tours' from its own website, and was therefore a direct competitor of the defendant, already owned the word and figurative trade mark for "BergSpechte – Outdoor-Reisen und Alpinschule Edi Koblmüller" (see below).

On 19 October 2007, the claimant successfully applied for injunctive relief from the Regional Court of first instance to prevent the defendant from using these keywords to direct users of Google by link to its own website. On 7 December 2007, the Higher Regional Court varied the interim injunction in part. Thereupon BergSpechte, trekking.at Reisen and Mr. Guni filed an appeal against that decision to the Austrian Supreme Court.

Following an appeal by the defendant, the Austrian Supreme court decided to refer various points of law to the ECJ, as to whether the use of the trade mark by the defendant constituted use that the claimant should have been entitled to prevent.

Decision

The ECJ followed its reasoning in the Google France case in determining that subject to certain other criteria being fulfilled (for example that the use of the mark by the third party is use 'in the course of trade'), the purchase of a keyword which is identical or similar to that of another party's trade mark, in order to direct internet users to that purchaser's website which sells similar or identical goods or services, does constitute behaviour which the proprietor is entitled to prevent. However, the determining factor in cases such as this should be whether the use of the keyword by the third party is one which is "liable to have an adverse effect on one of the functions of the mark".

Adverse effect on function of indicating origin

The ECJ stated that, where a keyword purchased by a third party is identical to a trade mark belonging to a competitor, then the "adverse effect"' referred to must relate to detriment caused to the "function of indicating origin". Therefore, a trade mark owner should be entitled to prevent the use of its trade mark as a keyword by a third party if the ad does not enable "normally informed and reasonably attentive internet users" to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark, or whether there is an economic link between the trade mark owner and the third party.

The question of whether there is an adverse effect, or the likelihood of such an adverse effect, on the function of indicating origin should be assessed by the national courts on a case-by-case basis. In this case, the ECJ recommended that the use of the keyword 'Bergspechte', although not identical to the word and figurative trade mark owned by the claimant, should be treated as such due to the fact that the keyword contains differences "so insignificant that they may go unnoticed by an average consumer".

However, the ECJ stopped short of giving any further guidance as to the circumstances under which a keyword should be considered as being 'identical' to a trade mark for these purposes, or whether or not the fact that the trade mark in this case was a word and figurative trade mark (as opposed to simply a word trade mark, as was the case in the Google France referrals) was relevant.

Likelihood of confusion

In contrast, where the keyword purchased by a third party is merely similar to a trade mark owned by a competitor, the relevant question to ask is whether there exists a likelihood of confusion as to whether the goods or services in question come from the same, or an economically-linked, undertaking.

The ECJ stated that, in this case, the keyword for 'Edi Koblmüller' could not be considered as identical to the claimant's trade mark, as it does not "reproduce, without modification or addition, all the elements constituting the trade mark". Therefore, the question of whether it is similar to the claimant's trade mark is for the national court to decide, as is the question of whether there would be a likelihood of confusion.

Again, there is little by way of guidance in the judgment as to the circumstances in which a keyword can be considered identical, or merely similar, to a trade mark, particularly where the trade mark in question is more than simply written text (for example, a logo). This is particularly important, given that, currently, the AdWords service is text only, and does not incorporate images or logos.

Comment

This decision represents the first application by the ECJ of the guidance it laid down in the recent Google France case, and the strict adherence to such guidance is perhaps rather unsurprising given the similarities between the case in question, and those referred to the Cour de Cassation.

One issue which remains unresolved from this decision, however, concerns the question of how to determine whether or not a keyword is 'identical', or merely 'similar', to a trade mark, particularly where that trade mark consists of composite elements (for example, where the trade mark is a logo containing words). For example, even where a keyword may not strictly "reproduce, without modification or addition, all the elements constituting the trade mark" in such circumstances, can the keyword still be adjudged to be 'identical' to the trade mark, if an "average consumer" would not notice the difference?

Although the decision in this case may not add a great deal to the guidance laid down in the Google France case, brand owners should, however, keep a keen eye on the numerous remaining references which are due to be ruled on by the ECJ in relation to this issue over the coming months as the questions referred do vary slightly.

Furthermore, it will also be interesting to monitor the approach of the national courts of the relevant EU Member States, to see how they interpret and apply the guidance contained within those rulings.

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This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 06/06/2010.