Federal Court of Justice, Decision of 14 December 2012, No. I ZR 217/10, "MOST-Pralinen"

The Federal Court of Justice confirmed its case-law on the admissibility of keyword advertising with third party trademarks. The function of the trademark as an indication of origin is not affected if the advertisement is visually separated from the hit list, even if it does not contain the trademark itself or any reference to the trademark owner or to the goods distributed under the trademark.

The plaintiff is the owner of the German word mark MOST, registered for chocolate and truffles. It sells high-quality confectionery products in its online store www.most-shop.de.

The defendant operates an online store available under www.feinkost-geschenke.de and www.selection-exquisit.de, selling gifts, truffles and chocolate products – however, no MOST-products.

In 2007, the defendant placed an advertisement with Google Adwords, using the keyword "Pralinen" (German for "truffles") together with the pre-set "broad match" option. This option suggests further keywords; in the case at issue, inter alia, the keyword "most pralinen". Therefore, if users entered "MOST Pralinen" into the search field, the following advertisement of the defendant appeared under the heading "Ads" on the right side of the screen next to the hit list: "Pralinen/Weine, Pralinen, Feinkost, Präsente/Genießen und schenken!/www.feinkost-geschenke.de." (German for "Truffles/Wines, Truffles, delicatessen products, presents/to enjoy and to present!/www.feinkost-geschenke.de").

The plaintiff claimed trademark infringement and prevailed in the first and second instance.

On further appeal, however, the Federal Court of Justice dismissed the claim. The court stated that a trademark infringement could be excluded if the advertisement is visually separated from the hit list and appears in a clearly identifiable advertising block. This also applied to advertisings which do not expressly clarify that there is no economic link between the advertiser and the trademark owner. Even the use of only generic terms for the products within the advertisement did not constitute a trademark infringement.

The court stated specifically that this decision would not contradict the case-law of the European Court of Justice according to which "the function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trademark or an undertaking economically connected to it or, on the contrary, originate from a third party" (decision of 22 September 2011, No. C-323/09, "Interflora"). It was for the national court to assess, on a case-by-case basis, whether the facts of the case indicated an adverse effect on the trademark function of indicating origin.

This decision confirms the court`s pro-competitive case-law concerning keyword advertising, setting not too strict requirements for the use of third party trademarks as keywords. The court clarified that the main aspect of admissible keyword advertising is a clear visual separation between the advertisement and the search results.