The case has the potential to make or break Google’s AdWords business model in Europe.
According to a press release issued by the Bundesgerichtshof (German Federal Court), it decided three cases on January 22, all involving AdWords where an advertiser buys another’s company name or trade mark, and has its own advertisement displayed alongside the search results for that term.
But each of the cases had slightly different facts.
One involved a highly distinctive trade mark, one a weaker descriptive trade mark and one a company name.
The first case involved a trade mark, Bananabay, registered for adult entertainment, which was being used by a competitor as a Google AdWord.
This prompted the Court to ask the ECJ to rule on whether use of a third party’s trade mark as a keyword on identical goods or services constitutes trade mark infringement under the Trade Marks Directive.
The exact wording of the question will not be known until the decision is published, which is expected to be in a few weeks’ time.
The second case concerned an objection to the AdWord “pcb”, which was made by the owner of the trade mark PCB – Pool for printed circuit boards. The Court found that this AdWord did not amount to infringement.
In the third case, the Court ruled that the use of another’s company name (Beta Layout) in an AdWord does not amount to infringement, even though company names are protected under German trade mark law.
The case is at least the second to be referred to the ECJ over adwords. In June last year, the Cour de Cassation in France asked the ECJ three questions in a dispute between Louis Vuitton and Google.
The first question in this referral was whether the Directive means that “a provider of a paid referencing service who makes available to advertisers keywords reproducing or imitating registered trade marks and arranges by the referencing agreement to create and favourably display, on the basis of those keywords, advertising links to sites offering infringing goods is using those trade marks in a manner which their proprietor is entitled to prevent?”
Matthias Koch of Lovells in Munich told Managing IP that though there has been some divergence, in general the German courts have taken a strict approach to adwords: “Many companies have been able to obtain interim injunctions against this kind of use.”
The effect of this is that, in practice, internet companies have not been able to sell keywords in Germany, unlike in other countries.
Koch said “that practice might change” regarding company names, following the Bundesgerichtshof’s ruling. But he added that, as many company names are also trade marks, advertisers and internet companies are likely to proceed cautiously.
It can typically take up to two years for the ECJ to answer questions referred from national courts.
Janine Steinhardt of Wragge & Co in Birmingham said it is hoped that the Court can bring consistency on the question of adwords: “There’s been a series of conflicting judgments handed down.”
Koch predicted that the ECJ would rule that use of another’s trade mark as an AdWord can constitute infringement: “I expect in the future it will not be possible to take a competitor’s trade mark in this way.”
Steinhardt agreed that the ECJ might well rule in favour of brand owners but cautioned: “It could go either way.”
