*OGH ‘Wintersteiger’ Reference to the ECJ on Keyword Advertising Jurisdiction Matters

Almost unnoticed the Austrian Supreme Court of Justice (OGH, 5.10.2010, 17 Ob 8/10s, Wintersteiger) has referred a request for a preliminary ruling to the ECJ related to the topic of Keyword Advertising. The court furthermore also provided an interesting insight whether or not it would see the function of indicating origin affect or not by the ad.

The question referred concerns the interpretation of the term “the place where the harmful event occurred or may occur” in Art 5 (3) of Council Regulation 44/2001. In respect of keyword advertising, the question is whether Austrian courts should have jurisdiction in cases where non-Austrian advertisers (e.g. German advertisers) use an Austrian Trademark as keywords to trigger keyword advertising on non-Austrian search engines (www.google.de). The reference however also provides some interesting insights into the (extremely restrictive) general view of the court towards keyword Advertising matters.

Background Knowledge:
Germany and Austria are one nation separated by a nowadays-pretty-pointless-border. Still, both countries like to emphasize the difference between them (due to something that might be best described as a “younger sibling – older sibling relationship“).  Austrians and Germans both basically speak/read/write the same language, there are only a couple of words which are different (e.g. the first month of the year is “Januar” in German and “Jänner” in Austrian German).

When a user with an Austrian an Austrian IP-address enters the URL http://www.google.com into his/her browser he/she is redirected to http://www.google.at, while  German users get redirected to http://www.google.de. If an Austrian user however enters http://www.google.de she/she will be shown the German version of the website and ads booked on AdWords for Germany (Note: This will only work if you NOT logged into your GMail-Account; For more information please see AdWords Help).

The court explains in great detail that the German and the Austrian website of Google look slightly different as the name of the respective country (or Top-Level-Domain) is written on the right below the Google logo. [As an Austrian I have to –of course– criticise the fact that “Österreich” is written in a much smaller font!]

Comparison of the German and the Austrian Google Logo by Austrotrabant as of 14/11/2010

Facts of the Case:
In the case at hand the defendant (Products 4U Sondermaschinenbau GmbH) had booked a term as a keyword that was registered as a trademark of the claimant (Wintersteiger AG) in Austria (“Wintersteiger“) and displayed ads (which did not contain the TM anyway) on http://www.google.de. The claimant is an Austrian based company that produces machines for the servicing and maintenance of skis and snowboards. The defendant produces similar machines in Germany and additionally also sells accessories (“Zubehör“) for machines of other producers/origin. The accessories were not produced by the claimant nor were they authorised by the claimant.

The defendant had booked the TM of the claimant as a keyword from 1.12.2008. The text of the German ad displayed on the 11.01.2010 was (TITLE) “Skiwerkstattzubehör“; (FIRST LINE) “Ski und Snowboardmaschinen” (SECOND LINE) “Wartung und Reparatur” (Display-URL) URL of the defendant.

Reconstruction by Austrotrabant

Translated into English: (TITLE) ski repair shop accessories (FIRST LINE) ski and snowboard machines (SECOND LINE) maintenance and repair (Display-URL) URL of the defendant

Jurisdiction question:

Article 5 of the Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters reads as following:

“A person domiciled in a Member State may, in another Member State, be sued: […] 3. in matters relating to tort, delict or quasi-delict, in the courts for the place where the harmful event occurred or may occur; […]”

The question referred by the Austrian court was whether Austrian courts should have jurisdiction in cases where non-Austrian advertisers (e.g. a German advertisers) use an Austrian Trademark as a keyword to trigger keyword advertising on non-Austrian search engines (www.google.de) as the court argues that under the circumstances of the case, Austria could be “the place where the harmful event occurred or may occur”. The Austrian court however also suggested three possible answers:

  1. National courts should only have jurisdiction if the Top-Level Domain used by Google is the national one (e.g. .at for Austria) or eventually (“…(alternativ“…) a generic one as e.g. .org or .com [sic!]. Advertisers should therefore ensure that their ads will only be shown under certain Top-Level domains.
  2. National courts should have jurisdiction if the website can be accessed (“im Gerichtsstaat abgerufen werden kann“) through the internet from the respective country. Thus, an advertiser would need to perform a world-wide trademark research before launching an ad.
  3. That the jurisdiction should depend on a number of factors:
    • Language used on the website
    • Competition of the parties on the respective market
    • Number of hits of the search engine [no, not the number of hits on the ad]

The court states a clear preference for the third possible answer, but also mentions that a world-wide ban of the use of a term that is only registered as a trademark in one specific country might be disproportionate. The court furthermore mentions similar pending lawsuits before the German BGH (C-509/09) and the French Tribunal de grande instance de Paris (C-161/10).

Interesting Insight Into the Court’s View on Keyword Advertising
First of all, it has to be highlighted that the Austrian court finally joined the majority of European courts  in using mainly (the court still uses the term “Trefferliste” without explaining if this term refers only to the ‘organic’ search results or if it  –as in the previous OGH cases– also includes Top-Ads) non-ambiguous terms to describe keyword advertising.

The court furthermore also stated that the ad as described above would beyond doubt (“zweifellos“) constitute a trademark infringement under Austrian trademark law, as the ad failed to clearly demonstrate that it stems from a third party which is not economically related to the TM owner or an entity connected to the TM-owner.

To use plain language: Dear Austrian lawyers, feel free to harass any advertiser who failed to use the 95 characters available in his/her ad to do so. (This blog’s stats show that during the last couple of weeks the number of hits from Austrian law-firms has remarkably increased 😉

The Austrian court followed its previous decisions applying an extremely restrictive standard with respect to TM-infringements through keyword ads, apparently assuming that the Austrian average internet-user is highly unskilled, naive and unaware that the last line of an ad indicates the website/URL the ad is linked to (allegedly Google has launched a special service for this kind of users, which aims at ruling out any kind of confusion by using a well-tested and proven interface: please see >>here<<). However the court’s statement might help to establish legal certainty among advertisers in Austria.

Concerning the jurisdictional matter, I’d personally opt for the first suggested option (Top-Level-Domain-based-approach), as I think that the second one would lead to a ‘Jurisdiction Imperialism‘ (which might turn Austria into the Keyword-Advertising-Forum-Shopping-Wonderland), while  I am not sure which criteria should be applied in the third option (language, competition on the market, …).

For more information please see a highly informative post by the IPKats which also discuss in detail the issue of Art 5 (3) (please see also the comment by Aurelio Lopez-Tarruella Martinez.

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