From (A) to (B): use of a similar sign in keyword advertising

Author: Kristof Neefs (Altius, Brussels)

Bergspechte/Günter Guni and trekking.at Reisen, Case C-278/08, Court of Justice of the European Union, 25 March 2010

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpq068

The Court of Justice of the European Union has ruled that the proprietor of a trade mark is entitled ‘to prohibit an advertiser from advertising, on the basis of a keyword identical with or similar to that trade mark which that advertiser has, without the consent of that proprietor, selected in connection with an internet referencing service, goods or services identical with those for which that mark is registered, in the case where that advertising does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or an undertaking which is economically connected to it or, on the contrary, originate from a third party’.

Legal context

Article 5(1) of Directive 2008/95 to approximate the laws of the Member States relating to trade marks (‘TMD’) provides that the proprietor of a registered trade mark is entitled to prevent third parties not having his consent from using, in the course of trade:

a. any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered;
b. any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on part of the public, which includes the likelihood of association between the sign and the trade mark.

The Oberster Gerichtshof inquired, in essence, whether Article 5(1) TMD is to be interpreted as meaning that a trade mark proprietor is entitled to enjoin an advertiser's use of a sign that is similar or identical to a trade mark as a keyword in a paid internet referencing service.

Facts

Bergspechte, an Austrian company, organizes outdoor tours such as mountain biking, skiing, and alpine climbing and owns the Austrian composite trade mark.

Bergspechte noticed that typing the keywords ‘bergspechte’ or ‘edi koblmüller’ in an internet search engine resulted in the display, in the sponsored links section, of advertisements of its competitor trekking.at Reisen. Relying on its composite mark, Bergspechte sought an injunction against these advertisements. After two instances, the case went to the Austrian Oberster Gerichtshof on a point of law. In turn, the Oberster Gerichtshof stayed the proceedings and referred the matter to the CJEU for a preliminary ruling.

Analysis

The Bergspechte judgment rides (to use CJEU terminology) on the coat-tails of its Google France judgment which was issued 2 days earlier in Joined Cases C-236 to 238/08 Google France v Louis Vuitton Malletier.

In Google France, the Court had already decided on some of the main trade mark questions in respect to keyword advertising. It had maintained, first, that an advertiser purchasing a paid referencing service and selecting a keyword to trigger the display of an advertisement uses that keyword in the course of trade in the sense of Article 5 TMD. Secondly, such use was ‘in relation to goods or services’, regardless of whether the sign was actually displayed in the advertisement. Thirdly, the advertising function of a trade mark was not adversely affected by use of an identical sign in a paid internet referencing service. Finally, whether the function of indicating origin of the trade mark is adversely affected by keyword advertising depends, in particular, on the manner in which the advertisement was presented. That function would, according to the CJEU, be affected where the advertisement of which the display is triggered by a keyword identical to the trade mark

does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party.

In those cases, the trade mark proprietor is entitled to prohibit use of a keyword identical to its trade mark in a paid internet referencing service under Article 5(1)(a) TMD.

In Bergspechte, the CJEU held that Article 5(1) TMD must be interpreted as meaning that

the proprietor of a trade mark is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with or similar to that trade mark which that advertiser has, without the consent of that proprietor, selected in connection with an internet referencing service, goods or services identical with those for which that mark is registered, in the case where that advertising does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or an undertaking which is economically connected to it or, on the contrary, originate from a third party.

At first glance, the second in the series of AdWords judgments does not add much to the principles laid down in Google France. However, Google France concerned use of signs identical to a trade mark in keyword advertising. In Bergspechte, at least one of the contested uses was that of a sign similar to the trade mark invoked. The judgment therefore provides guidance in respect to Article 5(1)(b) TMD.

In addressing whether keyword advertising is likely to lead to confusion, the CJEU first refers to Lloyd Schuhfabrik Meyer. There the Court maintained that a likelihood of confusion constitutes a risk that the public might believe that the goods or services in question come from the same or economically linked undertakings (Case C-342/97, Lloyd Schuhfabrik Meyer v Klijsen, 17). Next, the CJEU applied the principles set out in Google France, in particular the considerations in respect to detriment to the function of indication the origin of the goods, to infringement under Article 5(1)(b) TMD.

Although it is not expressly mentioned, I understand from the Court's reference to Lloyd Schuhfabrik Meyer that the established principles for the assessment of a likelihood of confusion equally apply to use of a keyword in a paid referencing service. That is to say, whether such a likelihood of confusion, or

the impossibility or difficulty to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or an undertaking which is economically connected to it or, on the contrary, originate from a third party

exists must be appreciated globally, taking into account all factors relevant to the circumstances of the case (ibid, 18).

One such factor is the relevant public. According to settled CJEU case law, the relevant public to be taken into account is the average consumer of the goods or services for which the trade mark was registered (Case C-251/95, Sabel v Puma, 22). That consumer is deemed to be reasonably well-informed and reasonably observant and circumspect (Lloyd Schuhfabrik Meyer, 25–26).

Against this backdrop, it is remarkable that the CJEU states, both in Google France and in Bergspechte, that ‘the average internet user’ must be able to distinguish the origin of the goods or services concerned without difficulty. In paragraph 87 of Google France, this statement is linked to the essential function of the trade mark in the area of electronic commerce, ie the enablement of internet users browsing advertisements to distinguish the origin of the goods and services concerned. In so ruling, the Court has seemingly drawn focus to the public of the medium by way of which advertisements are delivered, rather than to the target audience of the trade mark.

The way the public processes advertisements on the internet is relevant. Advocate-General Poiares Maduro had suggested as much in his Opinion in Google France (at 90–91). However, the level of attention of the target public of a trade mark and that of the average internet user do not necessarily correspond. This is especially so where the goods or services for which the trade mark was registered are only purchased after careful examination (see, eg, Case C-361/04, Picasso, 39–40). In those cases, the level of attention of the consumer of the goods is likely to be higher than that of an average internet user. Paragraph 35 of Bergspechte teaches that the relevant internet user is normally informed and reasonably attentive. It would have been helpful if the Court had qualified this by stipulating that the level of attention of the internet user depends on the nature of the goods and services for which the trade mark was registered. In any case, the objective characteristics of the goods and services concerned must be weighed as a relevant factor in determining whether the advertisement causes or is likely to cause confusion in respect to the origin of those goods and services. Any other interpretation would in my view lead to an unjustified discrepancy between the assessment of infringement by way of internet keyword advertising and by way of its brick-and-mortar counterparts.

Practical significance

In Bergspechte, the Court has unsurprisingly stated that use of a sign that is similar rather than identical to a trade mark in internet keyword advertising can be prohibited by the trade mark proprietor when that advertising leads or is likely to lead to confusion. The conditions for infringement under Article 5(1)(b) TMD are brought in line with those set out in Google France for detriment to the function of designating origin under Article 5(1)(a) TMD. Thus an advertiser's use of a similar sign as a keyword infringes where the advertising does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to in it originate from the proprietor of the trade mark or an undertaking which is economically connected to it or, in contrast, originate from a third party. While both Bergspechte and Google France have provided useful guidance to trade mark proprietors and internet advertisers, it is hoped that the CJEU will further refine the principles in the references that are still pending before it in respect to the AdWords service.