*First German Post-Google-France Ruling: OLG Braunschweig Compares Google To A Shop-Assistant And Once Again Finds A Trademark Infringement

The OLG Braunschweig is well know among German lawyers for being very trademark-owner friendly and the ECJ’s Google France ruling obviously hasn’t changed much about this. In a recent decision the court found, dissenting from the former BGH PCB-ruling, that users when entering a trademark as query and subsequently being displayed an ad assume that there has to be “some kind of economical connection” between the search term entered and the displayed ads.

What is interesting to note is that the OLG Braunschweig after the BGH’s PCB ruling in 2009 was actually bound to change its opinion and follow the BGH’s (advertiser-friendly) view. The court however took the ambiguity arising out of the ECG’s Google France ruling as a chance to return to its very TM-owner friendly view.

In the respective case (OLG Braunschweig, 24.11.2010, 2 U 113/08) the defendant had purchased a generic term (“praline“, eng: ‘praline’) as a keyword for his ad. The defendant used AdWord’s ‘broad match‘ option which subsequently led (back in 2007) to the display of the defendant’s ads when users queried for “Most-Pranlinen“, a query which obviously also includes the claimant’s TM “Most”. Although the ad pointed to the website of the defendant and did not contain the TM in the text of the ad, the ad was found to be too ‘vague‘. (For a short&simple explanation of the ‘broad-match’ function please see slides 10, 11, 12 of my talk at the KnowRight 2010 conference.)

What is novel in this respect is that the OLG Braunschweig has enriched the long history of bad comparisons between the online– and the brick-and-mortar- worlds with yet another not-fitting analogy by comparing the use of a search engine with the process of consulting a a shop-assistant [sic!] during a purchase in a store. The court argued that when a potential buyer encounters a shop-assistant and asks for a special brand he/she expects that the goods subsequently displayed stem (only) from this particular brand.

At this point I can’t help but assume that the judges of the OLG Braunschweig must enjoy a nice life style as the apparently only shop in stores where, when asking for a product or a TM, the shopper is only presented with a small selection of goods. Ordinary people however seem to be bound to go to super-markets where they usually not only don’t have a competent shop-assistant to talk to, but are also confronted with a large number of similar products once they’ve found the aisle they were looking for.

Goldman has already commented in great detail on this issue, which he refers to as ‘online dichotomy‘ when describing that it is common practise within the retail business to place a “loss leader” right next to a “home brand” to monetarize a third party trade mark value [Goldman, Brand Spillovers, Harvard Journal of Law and Technology, Vol. 22, 2008, p 18]. Ott/me have also commented on this issue [e.g. Schubert/Ott, MarkenR 2009, 338 (342)] from an law of unfair competition point of view, arguing that the shop-example as applied by the court is not correct as it fails to depict online-reality as, among many other things, only a very small number of people who are using a search engine or entering a query for a brand name are planning to buy exactly such a product or want to retrieve information exclusively about that brand/product.

 

“Home brand” products deliberately being positioned between high value TM-products (Santiago, Chile, 2010)

One judge who used a similar analogy back in 2004 but reached the opposite conclusion was Judge Berzon in Playboy Enterprise v. Netscape Communications:

‘[S]uppose a customer walks into a store and asks for Playboy Magazine and is then directed to the adult magazine section, where he or she sees Penthouse or hustler up in front on the rack while Playboy is burried in back. One would not say that Penthouse or Hustler had violated Playboy’s trademark. this conclusion holds even true if Hustler paid the store owner to put its magazines in front of Playboy’s.‘ [Judge Berzon in his dissenting opinion in Playboy Enterprises v. Netscape Communications, 354 F.3d 1020, 1025 (9th Cir. 2004) 1034-1035]

The shop-argument is however not the only surprising element in the decision. The court also found, that when an advertiser books a keyword and uses the ‘broad match‘-function he/she is at that moment also shown ex ante all the possible variations of the keyword. I will consider this argument plain wrong until being presented with a screen-shot that proves opposite. At this point I’d like to point out the Austrian Wein&Co case, where the judge concluded that the existence of the “Keyword Insertion Function” could not be proven.

The court in this respect might however might just have misunderstood an argument. There is indeed a possibility for advertisers to examine ex post which (broad-match) keywords have triggered their ads in the past. But this function, called Search Term Report,  was only introduced back in 2009, while the disputed ads were shown back in 2007.

As many commentators have mentioned, this ruling is expected to be overthrown by the BGH when ruling on Eis.de (formerly: Bananabay.de). Before the BGH will however do so, many German lawyers, citing this ruling, will successfully threaten advertisers which are not familiar with the BGH’s view on paying compensation for alleged trademark violations.