Businesses in the UK have for some time been subject to strict rules on misleading advertising, contained in the Business Protection from Misleading Marketing Regulations 2008 (the “BPRs”). It is clear enough that a misleading billboard or TV ad will fall foul of the rules, but what about the use of so-called “metatags” – the hidden keywords read by internet search engines and used to rank the results displayed to a user?

For many companies, clever behind-the-scenes use of these metatags has long been a way to ensure that potential customers performing an online search for the brand name or trade marks of a competitor are also presented with their own website and products. 

In a recent decision, the Court of Justice of the European Union (the “CJEU”) on 11 July 2013 has ruled that the use of such metatags can constitute “advertising” within the meaning of the EU Directives which spawned the UK Regulations – effectively meaning that companies which “piggy-back” their website on a competitor’s reputation by including key trade marks or brand names in the metatags of their own website will be subject to the same rules as for conventional forms of advertising.

The case (C-657/11) is that of Belgian Electronic Sorting Technology NV (“BEST”), a company established in 1996 and operating a business producing and distributing sorting machines based on laser technology. An employee of BEST, Bert Peelaers, left the company and in 2004, along with other individuals, set up Visys NV (“Visys”) in competition with BEST. Visys went on to embed in its website various metatags containing the names of popular BEST sorters, and to register the domain name www.bestlasersorter.com, at which it set up a mirror image of its own website.

After litigation and multiple appeals, Belgium’s highest court held that it could not apply the rules on misleading advertising unless Visys’ use of metatags, and its registration and use of a domain name, fell within the meaning of “advertising” under EU Directives 84/450 and 2006/114 (the “Directives”). It submitted the question to the CJEU, prompting the ruling which has now been published.

The Court had already made clear in Case C-112/99, Toshiba Europe [2001] ECR I-7945 that “advertising” under the Directives had a broad definition and “may occur in very different forms”. In this case the Court looked to the purpose of the Directives, noting that they were designed to protect traders against misleading advertising and to establish rules on comparative advertising. The CJEU concluded, based on the broad definition given to advertising-related terms in both Directives and on the contents of a number of introductory provisions, that the EU Legislature had intended for the Directives to establish “a complete framework for every form of advertising event” for the protection of consumers and traders.

The Court went on to declare that, so long as a trader’s actions were taken to promote the sale of his products or services and were capable of influencing the economic behaviour of consumers, it would not give any interpretation to “advertising” that exempted that trader’s actions from the rules of fair competition.

This established, the CJEU has ruled that so far as the use of a metatag suggests to the searching user that the site bearing the tag is related to his search – and it appears to be the Court’s implied view that the use of a metatag does suggest this – the use of the meta-tag is a “representation” within the meaning of the Directives, and therefore it falls under the definition of advertising.

Does this mean an end to metatags containing a competitor’s trade marks or product names?

The answer: not necessarily.

What is key to the ruling is that the Court has not quite declared the use of these piggy-backing metatags to be misleadingadvertising – only that the decision to use a given metatag is advertising in the first place, and will therefore be subject to the same fairness rules as a TV spot or magazine ad. In the UK under the BPRs, this means that it must not deceive or be likely to deceive a fellow “trader” – broadly meaning a business or one of its employees – in a way that might affect its economic behaviour or injure a competitor. In deciding whether a piece of advertising is misleading, a range of factors will be taken into account. The court will have regard to all the features of the advertising, including any suggestions made about the product (its manufacture, fitness for purpose or availability, among other things); suggestions made about the price or how it is calculated; or even suggestions made about the identity or credentials of the advertiser.

What does the above mean for the future of metatags? Certainly many modern search engines have started to give them reduced weight in their latest searching algorithms, as they become increasingly wise to the practices described above. And though the CJEU’s decision only relates to the law on misleading advertising, other court decisions have already placed metatag piggy-backing on uncertain legal ground. The leading UK case of Reed v Reed [2004] EWCA Civ 159 found that a company’s good-faith use of a meta-tag similar to its competitor’s trade mark did not amount to trade mark infringement, but the judge in that case was careful to leave open the question of what would happen if a company deliberately inserted an exact replica of a competitor’s mark. Decisions have also emerged from the US, including one case in which the use of the name “Victoria’s Secret” as a metatag was found to constitute trade mark infringement, in part because of the deliberate intention to “bait-and-switch” consumers.

While the new decision in the BEST case brings the deliberate use of metatags containing competitors’ brands and trademarks under the ambit of the misleading advertising Regulations, it may be that the already-dubious status of the practice in other areas of the law, combined with the decreasing importance of metatags to search engine rankings, will see the practice die out.