On June 27, 2013, the German Federal Supreme Court ruled once again on the question of liability of purchasers of keywords for trademark infringement and issued a decision which appears (only) prima facie to be a change in jurisdiction.

The claimant is proprietor of the German trademark “Fleurop” which is used nationwide for flower delivery services. The distribution system of the claimant allows its clients to order flowers at a flower shop of one partner florist which will be delivered at another place through another partner florist. The defendant, proprietor of the trademark “Blumenbutler” (flower butler), also in the flower delivery business, purchased from Google the “Fleurop” mark as a keyword in Google’s AdWord program. This led to the display of “sponsored links” (advertisements) leading to the defendant’s flower delivery service. Fleurop claimed infringement of its trademark rights under Section 14 (2) German Trademark Act.

In continuation of its previous jurisdiction (inter alia decision of December 13, 2012 – I ZR 217/10 – “MOST-Pralinen” and decision of January 13, 2011 – I ZR125/07 – “Bananabay II”) the German Federal Supreme Court confirmed that in principle there will be no infringement of the function of the trademark as an indication of origin if the advertisement (displayed due to a keyword being identical or capable of being confused with the trademark concerned) is visually separated from the hit list, and does not make any reference either to the trademark owner or the products marketed under that trademark.

However, applying the two-step test of the European Court of Justice (decision of September 22, 2011 – C-323/09 – Interflora; BARDEHLE PAGENBERG IP Report 2011/IV) the German Federal Supreme Court assessed in a first step whether the reasonably well-informed and reasonably observant Internet user is deemed to be aware, on the basis of general knowledge of the market, that Blumenbutler’s flower-delivery service is not part of the Fleurop network but is, on the contrary, in competition with it. Since the court did not observe such general knowledge, it was decisive, according to the second step of the test, whether the advertisement enabled the Internet user to tell that the service concerned does not belong to the Fleurop network.

The Court held, even though in principle there will be no infringement, due to the particular distribution system of the claimant, the circles concerned might assume that Blumenbutler was a partner florist of the claimant. As the advertisement did not include any information clarifying the absence of a commercial link between Fleurop and Blumenbutler, the defendant was liable for trademark infringement.

Remarks

The decision in the Fleurop case is (so far) the last in a series of cases where the German Federal Supreme Court had to rule on the question of liability of purchasers of keywords for trademark infringement. This decision – affirming an infringement – may appear prima facie surprising, in view of the fact that German Supreme Court had so far consistently ruled against trademark infringement, because in principle the so-called “keyword advertising” does not infringe the “origin function” of a trademark if the advertisement is visually separated from the natural search results and does not make any reference either to the trademark owner or the products marketed under that trademark.

With this decision the Federal Supreme Court followed the England and Wales High Court of Justice (decision of May 21, 2013, [2013] EWHC 1291 [Ch] – Interflora v Marks and Spencer) incorporating the guidelines laid down by the Court of Justice (decision of September 22, 2011, C-323/09 – Interflora, BARDEHLE PAGENBERG IP Report 2011/ IV); the facts of the German Fleurop case correspond in all essential aspects to the English Interflora case.

However, the present decision properly analysed does not appear to constitute a new approach to keyword advertising, but rather fits into the well-established case law: The Court itself emphasizes that in principle keyword advertising does not amount to trademark infringement and repeatedly highlights the exceptional and specific nature of this case.

What could similar cases be, where this exceptional jurisdiction would apply? One has to think about franchise systems or networks distributing specific goods or services under a trademark through partner stores and where the franchisees, or partners, themselves do not operate under the same company name. This would exclude many well-known same-name franchise systems but might apply to some specific distribution systems which are similar to the Fleurop system. We are currently not aware of any such cases pending before the German Supreme Court.