On 11 July 2013, the ECJ held that “advertising”, according to the word’s definition in Article 2(a) of the Comparative Advertising Directive (2006/114/EC), includes the use of a domain name and use of metatags in a website’s metadata, but not the mere registration of a domain name.
The case (C-657/11) concerns Belgian Electronic Sorting Technology NV (BEST) v Peelaers and another. BEST produces and distributes sorting machines based on laser technology. Bert Peelaers, a former employee of BEST, set up Visys NV (Visys) to compete with BEST.
In 2007 Visys registered the domain name www.bestlasersorter.com and placed a mirror image of its own website on the homepage of this URL. Visys also embedded in its website various metatags containing the names of BEST laser sorters. BEST subsequently registered its trade mark “BEST” and brought trademark infringement proceedings and proceedings under Belgian comparative advertising legislation for use of the domain name and metatags that included BEST’s trade mark.
After multiple appeals, Belgium’s highest court stayed the comparative advertising claim and sought a preliminary ruling from the ECJ on whether 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 ECJ had already clarified in the case Toshiba Europe (C-112/99) that “advertising” under Directives 84/450 and 2006/114 has a particularly broad definition and that the forms which advertising may take are very varied.
In this case the ECJ concluded that the EU legislator had intended for the Directives to establish “a complete framework for every form of advertising event”. Therefore, the Court considered that “advertising” “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 behavior of consumers and, therefore, of affecting the competitors of that trader, are not subject to the rules of fair competition imposed by those directives.”
This said, the Court went on to declare that the registration of a domain name was a merely formal process and did not make a representation to the consumer. Therefore, it did not fall within the definition of advertising.
With regard to the use of a domain name, the ECJ ruled that the use was clearly a form of representation to consumers, and because this form was designed to promote goods or services, such use falls within the scope of the Comparative Advertising Directive. The same conclusion was reached for the use of metatags that include competitors’ trademarks.
Indeed, the purpose of such use is to draw the Internet user towards particular goods or services and to encourage Internet users to view a particular website. The ECJ considers this use to be a “promotion strategy” because it suggests to the Internet user—who enters one of those names or particular trade name as a search term—that that site is related to his or her search and that he or she will find under that name a website relating to those goods or services, or relating to that company.
The important nuance to this ruling is that the ECJ has not declared the use of domain names or metatags to be misleading advertising per se—only that the use thereof constitutes a form of “advertising” and will therefore be subject to the fairness rules under national comparative advertising legislation. It will be interesting to see how courts decide on whether a piece of advertising in relation to domain names and metatags is misleading. (Valerie Vanryckeghem)
The case can be found on http://www.eurlex.eu