ECJ rules on use of trade marks in keyword advertising

Over the past years much has been said and written about a party using keywords for its ads, where those keywords are identical to another party's trade marks. On 23 March 2010, the European Court of Justice (ECJ) took a stance on the subject when it ruled jointly in three matters that were brought against Google on the use by a party and by Google of another party's trade marks as keywords for advertising. In short, the ECJ held that a trade mark owner can prohibit an advertiser from using the owner's trade marks as keywords, where the advert does not enable an average internet user (or enables him only with difficulty) to ascertain whether the goods or services referred to in the ad originate from the trade mark owner or an undertaking economically connected to it or, on the contrary, originate from a third party. Google itself was not found to use the trade mark owner's trade marks by storing keywords identical to the trade marks through its so-called AdWords-programme.

Dutch court applies ECJ's reasoning

Recently (in December 2010 and February 2011), the Dutch court of The Hague was the first in the Netherlands to apply the standards set by the ECJ in Google, in two cases involving the trade marks of Tempur, a company that sells Tempur memory foam mattresses and other sleeping products. In both Tempur cases competitors used the keyword TEMPUR as an Adword, to attract customers to their own website with sleeping products (not offering actual Tempur products).

Tempur competitors Energy+ and Medicomfort both used the TEMPUR trade mark as a keyword and a metatag. They claimed their adverts (which resulted from their use of the keyword/metatag) were lawful comparative advertising. The court found such use of a TEMPUR trade mark by a competitor to be in principle lawful, as it is necessary to fit the purpose of comparative advertising, i.e. to inform the consumer and stimulate competition. The use of trade marks as keywords is necessary for an effective comparative advertising on the internet, as the use of such trade marks enables the competitor to address the audience that is interested in products of Tempur's competitors, which would make the comparative advert effective.

However, Energy+'s advert was held unlawful for other reasons, those being that the advert does not make a clear distinction between the products of Energy+ and of Tempur, which gives Energy+ an unfair advantage due to the reputation of the Tempur trade mark. In the matter of L'Oréal/Bellure the ECJ already held that profiting from a trade mark owners reputation may be unlawful. The public may therefore attribute the reputation of the Tempur products to the products of Energy+, which causes the advert to be unlawful. The court does not further explore whether the public may be confused by the advert.

Medicomfort's use of the TEMPUR keywords is held lawful and does not give Medicomfort an unfair advantage at the expense of Tempur's trade marks (the metatag-claim was revoked), as the advert clearly distinguishes between the products of both parties. Hence, the goodwill relating to Tempur's products is not transferred to those of Medicomfort. Due to the clear distinction between the products of both parties in the advert, it is not difficult - let alone impossible - for the public to determine the origin of the goods. In light of the Google judgment the public is therefore not confused and there is no trade mark infringement.

Comments

The court's rulings raise several questions. If there is indeed no clear distinction between the products, it seems questionable whether the advert should be considered to be comparative advertising in the first place. Also, it seems that the court finds use of keywords per se to be justified by the need for effective comparative advertising, which advertising can be unlawful if the contents are confusing or misleading as to the origin of the promoted goods. This is a somewhat different starting point than the ECJ took, which assumes that the use of keywords can be prohibited by the trade mark owner depending on the circumstances of the case. Furthermore, the court should have focused on the possible confusion among the public rather than on obtaining an unfair advantage due to the reputation of the well-known TEMPUR trade marks, as confusion applies to all trade marks, regardless of whether they are well-known and that way a discussion about the reputation of a trade mark can be avoided.

Finally, the court finds the absence of a clear distinction/comparison between the products to lead to an unfair advantage (which is a criterion under applicable trade mark law), whereas the more logical approach would have been to follow the criteria set for comparative advertising, which require that the advert objectively compares various features of the relevant products and/or which prohibit confusion among the public. By applying the trade mark criteria to a comparative advert, whereas an equal result could have been obtained by applying the legal standards set for lawful comparative advertising, the court makes this case eligible for full compensation of all legal fees. This is possible in matters of trade mark law and other intellectual property rights as such, but is not available to cases which would strictly fall within the scope of comparative advertising.