By a decision rendered on 12 December 2008, the Dutch Supreme Court has decided to refer five questions to the European Court of Justice (ECJ) in an ongoing case on the use of trademarks (and variations thereof) as adwords in internet search engines such as Google.

The case in question, which we have reported on in previous ND newsflashes, concerns a dispute between Portakabin (a producer of modular portable buildings and the proprietor of the trademark PORTAKABIN) and Primakabin (a reseller of modular portable buildings, including second-hand Portakabin buildings). Primakabin uses the trademark PORTAKABIN and certain "spelling-error" variations thereof as adwords in a number of search engines.

In interlocutory proceedings, both the Amsterdam District Court as well as the Amsterdam Court of Appeal ruled against Portakabin.

The Supreme Court has decided that, before ruling on the dispute, it is necessary to obtain answers from the ECJ to five questions on the interpretation of Articles 5(1), 5(5), 6 and 7 of the EU Trade Marks Harmonisation Directive.

The first question submitted to the ECJ is whether the use of another party's trademark as an adword constitutes "use for goods and services" under the directive. In this respect, the Supreme Court wishes to know whether it makes a difference if the link to the advertiser's website that appears as a result of the use of the relevant adword as a search term is displayed. in the "normal" list of hits produced by the search engine, or as a "sponsored link" next to the list. The court also wishes to know whether it makes a difference if the offer for sale by the advertiser of goods identical to the ones covered by the trademark appears immediately on the webpage generated by the search engine operator (i.e. together with the link) or only on the advertiser's own website as accessed via the link.

In addition the Supreme Court asks whether, in the event that the ECJ's answer to the first question is in the affirmative, Art. 6 of the directive (question 2) or Art. 7 (question 3) would be applicable, as a result of which the use of the trademark would be acceptable on the grounds that it merely constitutes use as an indication of the characteristics of the relevant goods, or on the grounds of exhaustion of the trademark owner's rights (as the advertiser is offering for sale genuine, albeit second-hand, products of the trademark owner).

The fourth question is whether the ECJ's answers to the preceding questions also hold true for the "spelling-error" variations of the trademark used by the advertiser.

The fifth – and final – question posed by the Supreme Court is whether, if it is decided that the use by an advertiser of another party's trademark as an adword does not constitute "use for goods and services" under the directive, it is permissible under Art. 5(5) for an EU Member State to apply a purely national provision of trademark law to prevent such use if the latter occurs without due cause and takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the relevant trade mark. This is perhaps the most surprising question, as it effectively entails the interpretation by the ECJ of a provision of non-harmonised trademark law.

Given the extent to which the internet is currently used worldwide, and hence the importance and relevance of this issue, the Supreme Court found it very important to submit these questions to the ECJ, even though the underlying proceedings are only interlocutory proceedings.

The court also referred to the fact that similar questions have been posed to the ECJ by the courts of other EU Member States. In this regard, the Supreme Court referred to the questions posed by the French Supreme Court (Google/Louis Vuitton, C-236/06; Google/Viaticum, C-237/07 and Google/CNRRH, C-238/08) and the Austrian Supreme Court (Bergspechte Outdoor Reisen/Gunter Guni, C-278/08). However, it should be noted that the abovementioned cases differ from Portakabin/Primakabin. The French cases concern the liability of the internet search engine operator (Google) itself, and not that of the advertiser, for trade mark infringement in connection with the use of adwords, and the Austrian case involves the use by an advertiser of another party's trade mark to advertise his (the advertiser's) goods and services, not the resale of genuine, albeit second-hand, goods of the trade mark owner as in the Dutch case.

The answers to be given by the ECJ will most likely shed further light on the extent to which the use of other parties' trademarks on the internet is allowed, as well as the ways in which such use is permitted.

NautaDutilh is representing the advertiser in this case.