2012-02-03
Is keyword advertising trademark infringement?
The Advocate General of the Court of Justice of the EU has suggested that keywords used in online advertisement can infringe trademarks in certain specific circumstances.
The company Marks & Spencer had purchased the term “Interflora” as a Google AdWord to attract consumers to its own flower delivery service, which was not connected to Interflora, who is the holder of Community and UK trademark registrations. The business model of Interflora is based on a network of independent florists. Interflora claimed that the ads mislead the average consumer to believe that the competitor is member of the trademark proprietor’s commercial network.
The dispute between the parties lead the English High Court to refer questions to the Court of Justice of the European Union. The court of Justice was asked to clarify whether Mark & Spencer’s action constituted use of the trademark Interflora and, if so, whether the use falls within the scope of Articles 5 (1) (a) or 5 (2) of the EU Trademark Directive.
According to the judgment, a trademark owner can only prevent use of trademarks as an internet keyword to trigger to an advertisement in search results if it is liable to have an adverse effect on one of functions of a trademark; for example, indicating origin, advertising or a new investment function. As it is stated in the judgment the advertising function of a mark is not adversely affected by a competitor’s use of it as a keyword, due to the fact that this action offers internet users alternative goods and services.
However, referring to the judgment the function of indicating origin is affected if it is impossible or difficult for internet users to ascertain from the advertisement whether the advertised goods and services originate from the trademark owner or an economically connected undertaking or from a third party. Furthermore, the investment function of a trademark is also affected if the use substantially interferes with the trademark owner’s use of its trademark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty.
In regards to Article 5 (2) of the EU Trademark Directive, it was stated that where a mark has a reputation, the use of the same or similar trademark in a manner which may damage distinctiveness or reputation or take unfair advantage can be infringement.
The matter will be decided by the local court in UK and it will be most interesting to follow the verdict, which can be positive step for trademark owners.
You are welcome to contact the legal team of Valea if you have any kind of questions.
Case C-323/09
// Monika Colak