Summary
The latest ECJ ruling in a dispute about AdWords and trade marked terms was published on 8 July. The reference to the Court of Justice had been made in the course of a dispute between Portakabin Ltd and Portakabin BV (Portakabin) and Primakabin BV concerning the display of Internet advertising links on the basis of keywords identical with, or similar to, the Portakabin trade mark. The case involves a long list of issues, including display of advertisements on the basis of a keyword identical with a trade mark, the treatment of keywords reproducing a trade mark with ‘minor spelling mistakes’, advertising second-hand goods online and Primakabin’s removal of the Portakabin badge from some goods and its replacement with a Primakabin badge.
Primakabin sells and leases new and second-hand mobile buildings. Apart from manufacturing and marketing its own units, such as work shelters or temporary offices, Primakabin is also engaged in selling and leasing used units, including those manufactured by Portakabin. It is not part of the Portakabin group.
For the ‘AdWords’ referencing service, Primakabin chose the keywords ‘portakabin’, ‘portacabin’, ‘portokabin’ and ‘portocabin’. The last three variations were chosen in order to avoid a situation in which internet users might miss Primakabin’s ad because they had made minor spelling mistakes in typing the word ‘portakabin’. Originally, the heading of Primakabin’s ad, which appeared once one of the aforementioned words had been entered into the search engine, was ‘new and used units’. Subsequently, that heading was amended by Primakabin to ‘used portakabins’.
In 2006, Portakabin brought an action against Primakabin before a court in Amsterdam in which it sought an order requiring Primakabin, on pain of a fine, to cease all use of signs similar to the Portakabin mark, including the keywords ‘portakabin’, ‘portacabin’, ‘portokabin’ and ‘portocabin’.
While it is for the court in the Netherlands to apply the ECJ’s rulings in accordance with the facts as it finds them to be, the ECJ seems to hint that Primakabin may have overstepped the right to use another’s trade mark in this case. But it also seems to give a firm indication that few restrictions can apply where second-hand goods are being sold, when the description is largely accurate. The judgment features a familiar finding in one respect: the use of a trade mark in AdWords will be unacceptable where the ‘advertising does not enable average internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or from an undertaking economically linked to it or, on the contrary, originate from a third party’.
The full judgment may be found here
The Referred Questions
Eventually, following various stages in the proceedings in the Netherlands, the Hoge Raad decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:
‘1. (a) Where a trader in certain goods or services (“the advertiser”) avails himself of the possibility of submitting to the provider of an internet search engine [a keyword] … which is identical to a trade mark registered by another person (“the proprietor”) in respect of similar goods or services, and the [keyword] submitted – without this being visible to the search engine user – results in the internet user who enters that word finding a reference to the advertiser’s website in the search engine provider’s list of search results, is the advertiser “using” the registered trade mark within the meaning of Article 5(1)(a) of Directive 89/104 …?
(b) Does it make a difference in that regard whether the reference is displayed:
– in the ordinary list of webpages found; or
– in an advertising section identified as such?
(c) Does it make a difference in that regard
– whether, even within the reference notification on the search engine provider’s webpage, the advertiser is actually offering goods or services that are identical to the goods or services covered by the registered trade mark; or
– whether the advertiser is in fact offering goods or services which are identical to the goods or services covered by the registered trade mark on a webpage of his own, which internet users … can access via a hyperlink in the reference on the search engine provider’s webpage?
2. If and in so far as the answer to Question 1 is in the affirmative, can Article 6 of Directive 89/104, in particular Article 6(1)(b) and (c), result in the proprietor being precluded from prohibiting the use described in Question 1 and, if so, under what circumstances?
3. In so far as the answer to Question 1 is in the affirmative, is Article 7 of Directive 89/104 applicable where an offer by the advertiser, as indicated in Question 1(a), relates to goods which have been marketed in the European Community under the proprietor’s trade mark referred to in Question 1 or with his permission?
4. Do the answers to the foregoing questions apply also in the case of [keywords], as referred to in Question 1, submitted by the advertiser, in which the trade mark is deliberately reproduced with minor spelling mistakes, making searches by the internet-using public more effective, assuming that the trade mark is reproduced correctly on the advertiser’s website?
5. If and in so far as the answers to the foregoing questions mean that the trade mark is not being used within the meaning of Article 5(1) of Directive 89/104, are the Member States entitled, in relation to the use of [keywords] such as those at issue in this case, simply to grant protection – under Article 5(5) of that directive, in accordance with provisions in force in those States relating to the protection against the use of a sign other than for the purposes of distinguishing goods or services – against use of that sign which, in the opinion of the courts of those Member States, without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark, or do Community-law parameters associated with the answers to the foregoing questions apply to national courts?
Court’s Conclusions
1. Article 5(1) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks, as amended by the Agreement on the European Economic Area of 2 May 1992, must be interpreted as meaning that a trade mark proprietor is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with, or similar to, that mark, which that advertiser has selected for an internet referencing service without the consent of the proprietor, in relation to goods or services identical to those in respect of which the mark is registered, where that advertising does not enable average internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or from an undertaking economically linked to it or, on the contrary, originate from a third party.
2. Article 6 of Directive 89/104, as amended by the Agreement on the European Economic Area of 2 May 1992, must be interpreted as meaning that, where use by advertisers of signs identical with, or similar to, trade marks as keywords for an internet referencing service is liable to be prohibited pursuant to Article 5 of that directive, those advertisers cannot, in general, rely on the exception provided for in Article 6(1) in order to avoid such a prohibition. It is, however, for the national court to determine, in the light of the particular circumstances of the case, whether or not there was, in fact, a use, within the terms of Article 6(1), which could be regarded as having been made in accordance with honest practices in industrial or commercial matters.
3. Article 7 of Directive 89/104, as amended by the Agreement on the European Economic Area of 2 May 1992, must be interpreted as meaning that a trade mark proprietor is not entitled to prohibit an advertiser from advertising – on the basis of a sign identical with, or similar to, that trade mark, which that advertiser chose as a keyword for an internet referencing service without the consent of that proprietor – the resale of goods manufactured and placed on the market in the European Economic Area by that proprietor or with his consent, unless there is a legitimate reason, within the meaning of Article 7(2), which justifies him opposing that advertising, such as use of that sign which gives the impression that the reseller and the trade mark proprietor are economically linked or use which is seriously detrimental to the reputation of the mark.
The national court, which must assess whether or not there is such a legitimate reason in the case before it:
– cannot find that the ad gives the impression that the reseller and the trade mark proprietor are economically linked, or that the ad is seriously detrimental to the reputation of that mark, merely on the basis that an advertiser uses another person’s trade mark with additional wording indicating that the goods in question are being resold, such as ‘used’ or ‘second-hand’;
– is obliged to find that there is such a legitimate reason where the reseller, without the consent of the proprietor of the trade mark which it uses in the context of advertising for its resale activities, has removed reference to that trade mark from the goods, manufactured and placed on the market by that proprietor, and replaced it with a label bearing the reseller’s name, thereby concealing the trade mark; and
– is obliged to find that a specialist reseller of second-hand goods under another person’s trade mark cannot be prohibited from using that mark to advertise to the public its resale activities which include, in addition to the sale of second-hand goods under that mark, the sale of other second-hand goods, unless the sale of those other goods, in the light of their volume, their presentation or their poor quality, risks seriously damaging the image which the proprietor has succeeded in creating for its mark.
