The disputes itself concern the display of an ad by Marks and Spencer which looked like this [para 20]:

It remains unclear whether the ad was shown in March 2009 as a Top-Ad above the organic search results or as a Side-Ad alongside the search results on the right hand side. While the ECJ in para 20 describes the ad as a Side-Ad the EWHC describes the Ad in para 30 as a Top-Ad. The ad bears the TMs of the defendant in the title of the ad and in the Display-URL. The ad does not bear the TM of the plaintiff.

• The decision provides little to non guidance on how the national court should apply/interpret the relevant provisions in the respective case but instead highlights a large number of factors the court should consider when applying/interpreting the relevant provisions (e.g. para 49 – 53 in regard to the function of indicating origin).
• The ECJ further elaborates on the principle of the trademark functions and especially on the ‘investment function‘ (para 60  ss). Although reading it a couple of times the author however unfortunately failed to completely understand para 66. One thing the author found very interesting is that a de facto obligation for the TM proprietor to “adapt its efforts to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty” is not enough to adversely affect this function“[par 64]. This ratio appears very similar to the one the ECJ used when explaining in detail in Google France why the advertising function wasn’t adversely affected.
• The court in quite some detail explores the rights vested in trademark with a reputation according to Art 5(2) TMD but somehow doesn’t really reach any surprising conclusions when coming from a civil law background which is familiar with “dilution” and “free riding”.
• In par 74 the court also highlights that a “transfer of the image of the mark” is required for “free riding“. Interesting enough the BGH explicitly rejected in its Eis.de/Bananbay (13.01.2011, I ZR 125/07) decision  the idea of such an transfer in para 34.
• In par 82 the court further links the possibility of a “dilution” to the criteria if established in connection with the function of indicating origin (par 49 – 53).

All in all the decision -again- isn’t the landmark ruling advertisers and TM proprietors have been longing for which establishes easy rules as to admissibility of keyword ads. Compared to the opinion of the AG this however seems to be an advantage as the AG was pretty much suggesting a solution which was more focused on the special circumstances of the case and the fact that the chances that the function of indicating origin where especially high in this case due to the franchise system INTERFLORA is operating.

The bottom line of the decision is -once again- that keyword advertising even when using TM with a reputation is generally admissible.

This doesn’t come as much of a surprise when looking  at the judges inolved, which are “the usual suspects“;

- M. Ilešič (Rapporteur in all ECJ keyword advertising cases so far), 
- N. Jääskinen (Advocate General in Portakabin, Eis.de and INTERFLORA)
For more details please see below (work in progress).

• Bednarz, Keyword Advertising Before The French Supreme Court and Beyond – Calm At Least After Turbulent Times for Google and Its Advertising Clients, IIC  2011, 641.

Bednarz in detail analyses recent French decisions in the light of the ECJ’s Google France decision and reaches the conclusion that, although the French courts were well-known for not missing a chance to find Google or its advertisers guilty on whatever legal matter (trademark law, law of unfair competition, tort law) was presented to them, this apparently has changed.

• Kulk, Search Engines Searching for Trouble? – Comparing Search Engine Operator Responsibility for Competitive Keyword Advertising Under EU and US Trademark Law, July 2011.

Kulk (Delft University of Technology; University of Amsterdam - Institute for Information Law) reaches across the Atlantic and not only provides a splendid and short introduction into the topic, but also compares in detail the principles which the courts on both sides of the atlantic are following. While jurists from the US show little sympathy for the almost Prussian fixation of the ECJ on the requirements of trademark use, jurists from the Old World shake their heads in disbelief over the only legal concept that appears to be even more vague than the ECJ’s concept of the trademark function: the initial interest confusion.

• Bozbel, Benutzung der Marke als Domain-Name, Metatag and Keyword im Türkischen Recht, MarkenR 2011, 145.

While the US and European legal systems mainly left it to their courts to deal with the topic of keyword advertising, Turkey has opted for the Utha appraoch, explicitly forbidding the booking of a third party trademark as a keyword (149). Bozbel in his article however does not only cover the topic of keyword advertising, but provides a short and concise introduction into Turkish trademark law and its views regarding, domain names, Meta Tags (*sigh*) and keyword advertising.

For further articles published in which the author had a chance to participate or which he wrote – mainly – on his own, please check the publications tab.

Yahoo! has already tried to go this way in 2009 but soon again ended its paid inclusion program after intensive controversy on this issue.

There have been no court ruling on this matter so far, but the author is positive that if Microsoft continues with this layout this practise will soon be tested in court as an ad, triggered by a protected sign and shown among organic search results would most likely adversely affect a trade marks function of indicating origin and would most probably also seen as an act of unfair competition.

Although pretty much all reasonable IT-jurists know that the practise of misleading meta-tags is legal history (as effectively all search engines ignore the keyword-meta already since 2006) ‘paid inclusion’ could in the author’s opinion NOT be compared to the abuse of meta-tags. While meta-tags pose an act by the advertiser/website owner, trying to deceive the search engine and the users, paid inclusion on the other side requires the cooperation of the advertiser/website owner and the search engine. Thus meta tagging cases were directed against the advertiser, paid inclusion would lead to cases against search engine advertising operators.

In a screenshot posted on the RKB-blog and subsequently on Search Engine Land, the advertisement is only being marked as advertisement by a light blue arrow on the right hand side of the advisement (click on the picture to enlarge).

Magnified and marked excerpt of the advertisement within Bing's SERP

click to enlarge

Today the full text of the decision got published (BGH, 13.01. 2011, Az.: I ZR 125/07).

The court not only ruled on the trademark aspects but also used the occasion to state expressively that AdWords and “MetaTags” have to be treated differently and that Keyword Advertising does notconstitute an act of unfair competition.

The decision  constitutes a significant victory for Google AdWords and its customers in Germany. Although the author does not fully understand what the court was trying to say in para 27, the decision is of surprisingly clear and also brings long-desired clarity to other legal questions related to keyword advertising.

As the author is painstakingly trying to finish a paper on L’Oreal on time here are just a few highlights:

Para 19: The plaintiff used a sign identical to a TM for identical goods and services.

Para 20: There is a use “for goods and services”.

Para 21: The sign however is not getting used “as a trademark” as the use doesn’t have an adverse effect upon the functions of the trademark.

Para 22 ss: The function of origin is not affected as the ads are clearly labelled and separated.

Para 26: No reasonable internet user would assume an economical connection.

Para 27: The is no connection between the search term and the ad which could infringe the function of indicating origin as  … the search term remains visible in the query box when the ad is being displayed: The court in this respect refers to its PCB decision (BGH 22.01.2009, I ZR 139/07, pcb) where the court in para 23 states users won’t assume a use of the search term by Google as the term in the search query box stays the same the user had previously entered him/herself.

27 “…  Eine Verbindung zwischen dem Suchwort und der Anzeige in der Weise, dass das mit dem Suchwort übereinstimmende Zeichen auf die Herkunft der in der Anzeige beworbenen Produkte oder auf wirtschaftli-che Verbindungen der Unternehmen hinweisen könnte, stellt der Internetnutzer auch nicht deshalb her, weil beim Erscheinen der Werbung der Suchbegriff in der Suchzeile sichtbar bleibt. .. .”

Para 28: Keyword Ads shall be treated differently than Meta-Tags.

Para 28: Users are familiar with commercial information in press and broadcasting media and are aware of the way search engines finance themselves. Users are however NOT aware how keyword advertising works. Users however who DO know how keyword advertising works are at the same time aware that anyone can book a keyword and thus assume no economical connection etc.

Para 29: The Advertising function also isn’t adversely affected.

Para 30: Keyword Advertising does not violate the German Law on Unfair Competition.

Para 30 s: No passing-off.

Para 31: No unfair impairment of competitors.

Para 36: No misleading commercial practice.

PS: Maybe also the Austrian OGH might rethink his heavily disputed rulings on this matter in the light of this decision.

Most users will have noticed that Google’s search engine results page recently received a decent overhaul. One of the many things that has changed is the Instant Preview Function. This function allows users t ‘preview’ the website of a search result or an

disabled by default and it is necessary to click onto a small magnifying glass on the right hand side of the ad or the search result to activate it. ->

What was changed during the last overhaul is, that although this function is still disabled by default, clicking somewhere “near/around” a search result or an ad will enable it.

(Yes, I know. Please feel free to test it yourself now … but please don’t get carried away, the law stuff is still to follow below)

When the honourable Dr. Ott was questioning the ratio of my last post on this issue (instant preview results lead to an increase in transparency, decrease the likeliness of confusion or wrong assumption about economic connection etc), his main criticism was that the function is not enabled by default. And of course he was not entirely wrong about that  

When looking at the current situation one might however ask oneself WHETHER the preview function would still make sense if it was enabled by default, as every movement with the cursor would then inevitable lead to the display of a preview, which covers a substantial amount of the SERP (as opposed to the mouseover function, which only displays a very short section of text, the preview function takes up to approximately a third of the whole SERP).

As such a situation would certainly not be in the searchers’ best interest, the current situation, in which the preview is shown as soon as the user clicks anywhere near an ad, provides a good compromise between usability and transparency. 

I know this conclusion in neither thrilling nor stunning, but in the absence of any interesting court decisions on the matter of keyword Advertising (why is the GBH’s decision in Bananabay.de/Eis.de taking so long?), the author felt the need to write a post not only to keep the page visits at a stable level, but also to find a reason to point his readers attention to a fine article by Lassi JYRKKIÖ, who writing for the Helsinki Law Review gives a fine example of what the text of an ad that gets triggered by the word ‘Toyota Yaris’ might have to look like, to make sure that users don’t wrongly assume an economical connection: 

Three quick remarks: Firstly I think that the Editorial Guidelines of AdWords don’t allow all CAPITAL lines and are quite restrictive about exclamation marks. Secondly, given the average attention users pay to ads (very little), one might fear that most people would only read the term TOYOTA YARIS before clicking on the ad; and thirdly thank you for your very kind words about this website in FN 60

Lisa Shieh explains the move as follows:

[...] In fact, the display URL can be an important deciding factor in whether a user clicks on your ad. That’s why, starting [on the 17th of May], we’ll automatically show your display URL domain in the headline for select top placement ads on Google. As a result, your brand will be featured more prominently in your ad, and you can use the text in the headline to highlight other information. Potential customers, on the other hand, will be able to more easily identify the site to which they’ll be taken after they click on your ad.

When shown in the headline, the display URL will be separated from the rest of the text by a vertical bar and will include only the domain, not the “www.” prefix or any subdirectories. Your display URL will also continue to appear as normal below the description line. Of course, if the headline already contains your domain, we won’t display it again. Finally, it’s possible for the display URL domain to appear in addition to a description line that is promoted to the headline, as long as the resulting headline is sixty-eight characters or less.

Google’s Instant Preview function for ads might have a significant impact onto the questions whether text-ads are infringing TM-rights as users of this function are shown a preview of the advertiser’s website even before they may click on the ad.

Without much celebration Google launched the instant  preview function also for ads on its website (SERP to be precise) on the 25th or April. This means that as soon as the user’s cursor moves (‘hovers‘) over an ad on Google the search engine will display a small preview (more details of the content of the preview below) of the advertisers website. As a result users will be shown a preview of the advertiser’s website even before the users can click onto the ad to jump to the website the ad is liked to.

Advertisers can not opt of this function as Google AdWords Help states that “Instant Previews are an integral part of the AdWords search and ads experience for users and advertisers.” According to Google this function is currently available for all non-RTL (right-to-left) languages. The function isn’t enabled by default but users have to activate it once by clicking on the little magnifying glass next to a search result or next to an ad.   

LEGAL BACKGROUND:
At first sight this change doesn’t overly surprise but the author is of the opinion that this feature might have a significant effect on the Keyword Advertising discussion as we know it. The ECJ in par 99 of Google France clearly stated that an advertiser may be found liable for TM-infringement in the case where “that advertisement does not enable an average internet user [...]“. The ECJ didn’t refer to the text of the (text-)ad but to the “advertisement” as a whole, which means that also e.g. the labelling and the background colour of the ad were to be considered. 

As a logical consequence also a novel function such as the preview option will have to be taken into account when judging whether or not the function of indicating origin is adversely affected. In the author’s opinion this will lead to the fact that users, who are exposed to the preview of ads, are less likely to be confused about the origin of goods and service. Furthermore the argument that users might get “lured away” from the search results and thus the link to the TM-proprietor will be even less valid in the future.

DETAILED ANALYSIS
When taking a closer look at the preview one can quickly spot two things; first that sections of the website’s text are shown in black letter against a white background. Secondly that the search terms are highlighted in this text selection in bold black letters. The origin of the text displayed is also indicated by a thick orange rectangle around the respective section of the preview.

Google Help: ‘For some previews, highly relevant parts of the page will appear in text call out boxes over the preview image to help you see where your query appears on the page.‘)

It is also worth noticing that the background of the ad for which the preview is shown in light blue. This is very interesting as the Top-Ads on Google used to have a light blue background and just changed back to yellowish-orange by mid February 2011.

Bing.com, Google’s only rival left keeps using the light blue colour for its Top-ads but doesn’t offer any preview functionality for their ads.

POSSIBLE CONSEQUENCES:
One possible consequence of Google’s new feature might be that advertisers should not only (continue to) draft the text of their ads very carefully but they should clearly avoid any similarities between their website and the website of the TM-proprietor.
As the authors heavily doubts that the users will actually read the text highlighted in the preview the amount of information effectively communicated preview might remain ‘llimited‘ and as such any disclaimers or clear textual statements on the advertiser’s website might effectively be fairly irrelevant on a website which uses a similar layout and/or colours as the website of the TM-proprietor.

SUMMARY:
The new feature definitely increases transparency on Google’s search results page. As a result it will be easier for users to decide whether or not they would like to proceed to the advertisers website. Until the launch of this feature users had only the text of the ad and the (Display-) URL shown below the ad to base their decision on. This might especially be of importance in the light of the dawning law-of-unfair-competition cases as the ECJ in his recent decisions and opinions has kept narrowing the changes of a successful litigation against the advertiser on trademark grounds. Advertiser will most probably also embrace the feature as the preview is shown free of charge and might help to avoid unnecessary clicks onto ads and thus costs for the advertisers.

The downsides of this feature are that is not enabled by default and that might be difficult to implement this feature on devices which don’t use as mouse pointer but e.g. a touch screen.

The author, as always, welcomes any comments and remarks on this issue as this discussion might help us to bridge the time until the German BGH will finally release the full text of its decision in Eis.de/Banabay.de (which as well-informed rumours told the author have ended on the 13th of January this year very much in favour of the advertiser , which the court however will hopefully only do after the author has finally submitted his doctoral thesis on the very same matter.

At the Google AdWords workshop in Brno I was given the chance to hold a presentation about the legal aspects of keyword advertising and to discuss some of the aspects (e.g. increase of the importance of law of unfair competition) with a very interested audience.

I’d like to especially thank the members of the faculty of Law at Masaryk University not only for the invitation, but also for allowing me a noticeable degree of flexibility, incredible hospitality (pick-up service from the railway station, splendid city tour, post-lecture meal, etc.) and most of all … extremely interesting discussions also concerning other fields of law (e.g. Data Retention, ISP liability, requests for information by the police/court under Czech law, …) after the workshop.

Please find the slides below. Embedding unfortunately didn’t work so you will be taken to the slideshare-website. I apologize for the inconvenience. If you’ve got any questions about the presentation, please do not hesitate to contact me!

One quick remark: as some participants were wondering about the email-adr on the last slide of the presentation. The expression “0-8-15” (or “08/15“) in the German language refers to a usually mundane, entirely not exciting standard routine and was chose by the author to contrast with the -incredibly exciting sounding- email addresses of some his colleagues

Although the court stuck with its previous rulings according to which the content of the website remains of no interest with regard to the question of whether or not the city’s names rights are infringed or not, the court for the first time admitted that the use of a Top Level Domain (TLD) such as e.g. .com might be of relevance for answering the question of whether a likeliness confusion (or attribution; “Zuordnungsverwirrung“) exists. If such a likeliness of confusion exists, a registrar would be seen as infringing the name rights of the city in question.

Facts of the Case:
The case concerns the domain Schladming.com which is registered for the defendant. Schladming is the name of a mid-size Austrian city, well know in Austria for skiing and, surely more importantly, for hosting the 2013 Alpine Ski World Championship.

The defendant Tiscover,  runs a accommodation booking site for the region around Schladming.  The domain Schladming.at is registered for the city council of Schadming. As many other Austrian cities and villages,  Schladming had failed to register the name of their city on time and subsequently sued the defendant.

Name law in Austria in regard to domain law is usually applied in a very strict manner and as a rule of thumb courts will usually grant an injunction against any registrar who registered the name of an Austrian city as a domain name and thus infringes the name rights of the city (OGH, 16.12.2003 ,4 Ob 231/03d, serfaus.at).

Regarding disputes about name rights, other than disputes about e.g. TM issues, the actual content of the respective website (OGH, 24.03.2009, 17 Ob 44/08g, justizwache.at) and  the actual TLD used (e.g. OGH, 20.03.2007, 17 Ob 3/07a, immoeast.com) were not considered when judging whether the name holder’s rights were infringed or not . The only thing courts were bound to consider was whether the  domain name itself was confusingly similar to the allegedly infringed name.

In Schladming.com the OGH extensively cited literature on the question of whether or not the TDL should also be considered, referring also to a decision by the German BGH (BGH, 21.09.2006, I ZR 201/03, solingen.info), in which the court had found  that the TLD ‘.info‘ when being registered for the name of a German city (solingen.info) was not sufficient to rule out a likeliness of confusion.

The defendant in schladming.com however had argued that an average consumer would “beyond doubt” not expect the city to be the registration of any Austrian city name ending on the  TLD ‘.com’.

A connection between the name of an Austrian city used as a domain and the respective city, would only be assumed if the TLD ‘.at‘ would be used. To prove this argument the defendant through all stages of the trial offered to provide expert witnesses. Citing the above-mentioned ruling of the OGH, the courts of lower instances (immoeast.at),  however refused to accept evidence on this matter.

• Likeliness of Confusion as a ‘legal‘ or a ‘factual‘ question

Under Austrian procedural law courts are free to decide whether the question of whether a likeliness of confusion exists, shall be treated ad a mere ‘legal question‘ (“Rechtsfrage“) or as a ‘factual question’ (“Tatsachenfrage“).

Austrian courts will treat the question of a likeliness of confusion as a legal question, if the expertise of the court is sufficient to decide on the matter. In case the court expertise isn’t, the court is bound to consult an expert witnesses on the matter and deal with the matter as a factual question.

The courts of first instance saw no need to allow expert opinions on the question on confusion. Although the OGH stated that the court of first instance was in principle right in doing so, the Supreme Court took issue with the fact that the court of first instance didn’t address the issue of whether or not the TLD .com might affect the likliness of confusion was a legal defect (“sekundärer Feststellungsmangel”)  at all and thus annulled the decision of the court of first instance.

• Possible implications on on-line advertising
  

Bearing in mind the notably very strict previous decisions of the Austrian OGH in this respect, one might wonder if the courts’ change of heart might indicate that the court acknowledges that Austrian web-users have become more web-savy and as a consequence might eventually pay attention to the TLD following a certain domain name. This would be indeed a big step forward, as the Austrian OGH in its recent decisions had expressed an attitude concerning the web-savines of the average Austrian web user, which – politely speaking and referring to the courts Keyword Advertising decision – was always seen as being  very, very limited.

• No duty to transfer domains under Austrian law

One detail most practitioners forget to mention when trying to motivate their potential clients against litigating against an alleged infringer is that, under Austrian law, even a name-holder who was granted an injunction against the infringer will in most of the cases not receive his domain as Austrian law foresees no duty for the infringer to transfer (“Übertragungsanspruch“) the domain to the right holder. The only duty the infringer is bound to, is to cancel the registration (“Löschungsanspruch“) . After such a cancellation for example the Austrian Domain Name registry (nic.at) will wait for an undefined period of time before the domain can be registered again … by anybody.

As a practical consequence anybody who thinks that his rights were infringed by a domain name, should, if it is an Austrian domain name, approach the Austrian DN registry to request the ‘Wait status‘ (“Wartestatus“) which will stop the registrar from transferring the domain, but should necessarily at the same time request a third party service ‘Domain Catcher‘ to attempt to register the domain at the earliest point possible, as the infringer can always decide to cancel the domain and then to secretly register the domain under an identity less vulnerable to litigation.