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The question under which circumstances the use of a sign identical with a trademark in Google AdWords advertisements constitutes a trademark infringement has been the subject of several decisions of the German Federal Court of Justice and the Court of Justice of the EU in the past.
Buying Google AdWords which are identical or similar to a trademark is in principle permissible as long as the advertisement makes it clear that the internet user is directed through the advertisement to a product other than the trademarked product.
In the case of well-known trademarks, however, this may be inadmissible due to an exploitation or impairment of the distinctive character of the trademark. Where a third party directs the internet user to offers of original goods the permissibility of the use of the trademark as an AdWord derives from the principle of exhaustion.
In the case Ortlieb II the question was whether a Google advertisement that uses a trademark as an AdWord constitutes a trademark infringement if it directs the internet user to an offer list that contains both the trademarked products and the products of competitors.
Amazon had bought the words ‘Ortlieb bicycle bag’ (Ortlieb Fahrradtasche) as Google AdWords.
When these words were entered into the Google search engine, an advertisement appeared, reading “Ortlieb Fahrradtasche, www.amazon.de/ortlieb+fahrradtasche”. After clicking on this advertisement the internet user was directed to an Amazon page which listed Ortlieb bags as well as bags from other manufacturers.
"According to the court, the use of the advertisement cannot be compared with the situation in which a customer enters a department store."
The Court of First Instance regarded this as a trademark infringement and granted inter alia injunctive relief. The Court of Appeal shared this view. According to the Appellate Court, the public expects the advertisement to direct the internet user to offers of the trademarked products.
Due to the design of the advertisement, the public has no reason to assume that clicking on the advertisement would present them with an overview of offers in which, in addition to Ortlieb products, similar offers from other manufacturers could be obtained without separate identification.
The impression is reinforced by the URL selectively shown in the advertisement. In the advertisement, the URL was displayed only as www.amazon.de/ortlieb+fahrradtasche, while the complete URL contained the information “keywords+ortlieb+fahrradtasche”. If the advertisement had contained this information, the public would possibly have come to the conclusion that the URL contained these terms due to the booking of the AdWords.
Contrary to Amazon’s opinion, according to the court the use of the advertisement cannot be compared with the situation in which a customer enters a department store to buy the advertised product, and then finds not only the advertised product but also products from other manufacturers, since the advertisement did not generally direct the internet user to www.amazon.de.
Rather, the URL www.amazon.de/ortlieb+bicycle bag suggested that the internet user would be directed only to a certain product selection from the Amazon stock, ie, original Ortlieb products. Consequently, the function of indicating origin—the main function of the trademark—is impaired.
The Federal Supreme Court upheld the decision of the Court of Appeal in its decision, officially denominated Ortlieb II. It clarified that the fact that a retailer offers competing products as well as products of the brand manufacturer does not in principle prevent the brand being used in advertising for this product range.
However, the legitimate interests of the trademark owner have to be safeguarded. Where a trademark is used in Google AdWords advertisements misleadingly due to the specific design of the advertisement, so that customers are also directed to the offer of third-party products, the advertising effect of the trademark is exploited. The trademark owner does not have to accept this use of the trademark.
Previous court rulings dealt with the question of whether and when a booking of AdWords identical to a trademark by third parties is permissible for trademarked goods or for goods other than the trademarked goods. The present case is a blend of both sets of facts.
The company advertising by means of AdWords had directed internet users to offers of both trademarked goods and goods from competitors. This is not forbidden in principle. However, the fact that trademarked products are also offered does not lower the requirements for the admissibility of advertising with AdWords identical to trademarks for competitive products.
In other words, the fact that the advertisement also directs the internet user to trademarked goods does not legalise per se the simultaneous advertising of competing products. The advertisement must not give the impression that only the trademarked goods are offered if in fact it leads to goods from competitors as well.
Christian Buchholz specialises in all IP-related disputes, including patents, trademarks, designs and copyright at Krieger Mes & Graf v. der Groeben. He can be contacted at: firstname.lastname@example.org
Krieger Mes & Graf v der Groeben, Google AdWords, trademark infringement, CJEU, German Federal Court of Justice, Amazon, design, advertisement