The Court of Justice of the European Union (CJEU) recently ruled that the term 'advertising' encompasses use of metatags and domain names, though not mere registration of a domain name. Laws on misleading and comparative advertising therefore apply to any use of a competitor’s trade name in a metatag or domain name.
Belgian Electronic Sorting Technology NV (BEST) and Visys both manufacture and distribute sorting machines and systems using laser technology. BEST’s products are named 'Genius', 'Helius', 'LS9000' and 'Argus'. Visys was established by Mr Peerlaes, a former employee of BEST. On behalf of Visys, Mr Peerlaers registered the domain name 'www.bestlasersorter.com' in 2007. The website hosted under this domain name was identical to Visys’ usual websites.
In 2008, BEST applied to register the figurative trade mark BEST as a Benelux mark. When the words 'Best Laser Sorter' were entered into www.google.be, the second search result, appearing, directly after BEST’s site, was a link to Visys’ website. It was established that Visys used a combination of BEST’s product and trade names (such as 'Helius sorter' and 'Best+Genius') as metatags.
BEST commenced proceedings. On appeal, the only issue before the court was the alleged infringement of comparative and misleading advertising laws. Questions on whether the term 'advertising' encompasses registration and use of a domain name and use of metatags in a website’s metadata were referred to the CJEU.
The CJEU ruled as follows :
- merely registering a domain name: this was considered a purely formal act which does not necessarily mean that potential consumers can become aware of (and have their choices influenced by) the domain name. Although registering a competitor’s trade mark as a domain name deprives that competitor of the ability to register and use that domain name itself (and may be actionable under other legal provisions), mere registration of a domain name does not comprise an advertising representation;
- using a domain name: in this case, the domain name which included BEST’s mark was being used to host Visys’ website content. This use was intended to promote supply of Visys’ goods or services. Visys’ choice of the domain name was intended to encourage internet users to visit its site and take an interest in its offer. The court also felt that using a domain name which refers to a company’s goods, services or trade name is a form of representation made to potential customers that they will find a website relating to those goods or services or to that company under that name. Such use falls within the meaning of 'advertising'.
- using metatags: the fact that metatags are invisible to the internet user and are directly addressed to the search engine is irrelevant. Choosing metatags that correspond to a competitor’s goods and trade name in the programming code of a website causes that website to be suggested to any internet user who searches for that competitor’s goods or trade names. This type of use of metatags is a promotion strategy aimed at encouraging the internet user to visit the site of the metatag user and to take an interest in its goods or services. Such use therefore also falls within the meaning of 'advertising'.
The practice of using a competitor’s mark in the online arena is an evolving area. While many brand owners have had notable successes in using domain name dispute resolution procedures to prevent cybersquatting, brand owners have had mixed success in seeking to prevent competitors from registering their trade marks as keywords and metatags through trade mark infringement actions (see Keyword advertising - Interflora v M&S). This case provides brand owners with further ammunition to tackle competitors who make use of their brands online.
The Comparative Advertising Directives are aimed at protecting traders against misleading advertising, and to set out the conditions under which comparative advertising (being any advertising which explicitly or implicitly identifies a competitor or its goods or services) is permitted. An advertisement is misleading if it in any way deceives (or is likely to deceive) anyone to whom it is addressed or whom it reaches, and which (due to its deceptive nature) is likely to affect the economic behaviour of such persons, or to injure (or be likely to injure) a competitor.
Anyone who uses a competitor’s marks in a domain and or in metatags for the purpose of promoting his own goods or services needs to therefore consider this strategy carefully and take care that this use is not misleading.