In Belgian Electronic Sorting Technology NV v Peelaers and another Case C-657/11, the Court of Justice of the European Union (CJEU) has confirmed that the use of a domain name or metatags is included in the definition of "advertising" for the purposes of the Comparative Advertising Directive and, accordingly, these uses fall within the scope of the comparative advertising regime. Registration of a domain name, however, does not.
The parties to the proceedings are both manufacturers of laser sorting equipment. In 2007, Visys NV registered the domain name "www.bestlasersorter.com", which included the acronym of the brand name of competitor Belgian Electronic Sorting Technology NV (BEST). BEST subsequently registered "BEST" as a trade mark. BEST brought trade mark infringement proceedings and proceedings under Belgian comparative advertising legislation for use of the domain and the use by Visys of metatags that included BEST’s trade mark.
"Advertising" is defined in Article 2 of the Comparative Advertising Directive (89/104/EEC) as "the making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations". Whilst the first instance Belgian court rejected BEST’s claims in their entirety, on appeal the court stayed the comparative advertising claim and sought guidance from the CJEU on whether or not the term "advertising" is "to be interpreted as encompassing, on the one hand, the registration and use of a domain name and, on the other, the use of metatags in a website’s metadata?"
The CJEU began by noting that the definition of "advertising" was particularly broad and not limited to traditional forms of advertising. As the purpose of the Comparative Advertising Directive is to protect both consumers and traders, the definition of "advertising" according to the CJEU "cannot be interpreted and applied in such a way that steps taken by a trader to promote the sale of his products or services that are capable of influencing the economic behaviour of consumers and, therefore, of affecting the competitors of that trader, are not subject to the rules of fair competition imposed by those directives."
With regard to the registration of a domain name, the CJEU considered that this is merely a formal process. It does not mean that a website is necessarily available from that domain name. As the registration of a domain name does not make a representation to a consumer, it does not fall within the definition of "advertising". The CJEU rejected arguments that such a registration may block a third party from obtaining that registration. This may, however, be a restriction on a competitor that could be addressed under a different legal mechanism.
Use of the domain name, such as in the circumstances of the present case where it returned the same Visys website available at other Visys domain names is, in contrast, clearly a form of representation to consumers designed to promote goods or services. Use of a domain name therefore falls within the scope of the Comparative Advertising Directive. The CJEU reached the same conclusion for the use of metatags that include competitors’ trade marks. The purpose of such use is to draw the internet user towards particular goods or services or competitor goods or services. The fact that metatags are invisible was irrelevant according to the CJEU, as their use is a "promotion strategy" designed to encourage internet users to view a particular website.
As the CJEU noted, the definition of "advertising" in the Comparative Advertising Directive is particularly broad. On a natural reading of the definition, it should come as no surprise that the CJEU reached the conclusion that use of a domain name and metatags could fall within it. Businesses adopting such promotion strategies should therefore be aware that they may face claims under national comparative advertising legislation as well as trade mark infringement proceedings.