Posts Tagged 'Law of Unfair Competition'

*’Paid Inclusion’ / ‘Keyword Buying’ – A Dangerous Road To Go For Microsoft

Microsoft’s search engine is obviously currently testing a new layout which includes advertisements among its search results while insufficiency labelling them as advertising. This practise is known as ‘paid inclusion’ or ‘keyword buying’ on could prove as a dangerous road to go for Microsoft.

Yahoo! has already tried to go this way in 2009 but soon again ended its paid inclusion program after intensive controversy on this issue. Continue reading ‘*’Paid Inclusion’ / ‘Keyword Buying’ – A Dangerous Road To Go For Microsoft’

*One To Cure Them All? – Is The ECJ Using The Very Same Formula To Answer All Questions Related To Keyword Advertising?

Disclaimer: This is a 100% geeky trademark law post. Some readers might find it a bit difficult to understand… 😉

When analysing the ECJ’s most recent keyword advertising decision Portakabin I was surprised to see that the very same formula the court first used in Google France to define if the function of indicating origin got adversely affected in respect to Art 5 (1) lit. a

84: The function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive 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 an undertaking economically connected to it or, on the contrary, originate from a third party.

Continue reading ‘*One To Cure Them All? – Is The ECJ Using The Very Same Formula To Answer All Questions Related To Keyword Advertising?’

*Augmented Reality: Are The Doctrines Developed for Search Engines Applicable?

Regular readers of this blog will know that I have already written a few posts [and even smuggled into the footnotes of a recent German publication (fn 17) & our upcoming JIPLP publication (fn 25)] on the idea of applying the nice principles that were developed in recent years for keyword advertising onto the technique “Augmented Reality“.

[If you are not familiar with the term “Augmented Reality“, please take a second to watch this video, which will provide you with a very simple introduction to the topic. At the end of the post you will find additional videos which might give you a few ideas how far technology has already come.]

Why? Because I don’t think it makes a huge difference whether I type “Canon S 90 price comparison” into the search engine (e.g. Google Product Search) on my desktop computer at work or whether I just point my mobile phone’s camera onto an actual Canon S 90 while standing in the shop and then wait for the information supplied by an augmented reality application.

This issue has been mulling around for quite some time in my head and now I think it is time to approach it in a more analytical way, by scrutinizing my assumptions.

Questions raised:

  • Can the same principles that were developed by search engines also be applied to Augmented Reality services?
    • Can the act of pointing a mobile device towards an object be compared to the submission of a query?
    • Are the rules developed for the liability of search engines providers also applicable for the providers of augmented reality services (infringing TM use, third party liability)?
    • Can the act of linking commercial communications to an object be compared to the booking of a keyword?
    • Can the act of linking a branded (trademarked) object to a commercial communication be compared to the booking of a trademark term as a keyword?

If the answers to all of the questions above are in the affirmative:

    • Does ‘commercial communication‘ on such services pursuant to Art 6 (a) of the E-Commerce Directive (2000/31/EC) need to be labelled as such (opposed to ( non-commcercial) ‘user generated data’, such as Wikipedia or Google’s (organic) search results)?
    • If there is a labelling of commercial communications, is it sufficient to distinguish commercial from non-commercial communication?
    • Trademark Law:

      • Is there a use for goods and services in the meaning of Art 5 of the Trademark Directive (89/104/EEC)?
      • Is it possible that users might assume an economical connection between the ad displayed and the trademark proprietor? [Verletzung der Herkunftsfunktion]
      • How to avoid such an assumption of an economical connection on the part of the consumer (and thus not to affect the function of indicating origin)?
    • Law of Unfair Competition:

      • Are users deceived about the nature of the content? Is the ad misleading?  [Irreführung, Rechtsbruch]
      • Is there an act of passing off? [Rufausbeutung]
      • Does the use lead to dilution of the trademark or is it detrimental [Verwässerung]
      • Is this service intercepting a competitor’s potential customers? [Eindringen in den Kundenkreis des Mitbewerbers]


  • Where does the information used in the service come from?
  • Who shall be held liable if the data displayed is incorrect?
  • Who could possibly guarantee the quality of the (augmented) information display?

For your viewing pleasure:

Finally, my personal favourite:

I’d be happy to hear your thoughts on this issue and would be very grateful for screenshots of AR services where commercial communication (ads) is included in the service without (clear) labelling.

PS: Thank you Peter for pointing out the post by Adam Smith of the World Trademark Review to me.

*Ads Inside Of Google Suggest: Trade Mark Infrigements & Acts of Unfair Competition?

The issue of ads inside of the suggestions made by Google’s Suggest Function has already been dealt with in great detail in a previous post, at the beginning of February. My conclusion back then was that:

[…] The question of trademark use in relation to ads inside of ‘Google Suggest’ shall be judged quite similar to the use TM in ordinary Keyword Advertising. It has to be noticed however that the suggestions, relating to a query entered by the user and containing a TM, are offered in real time and close proximity to the user’s query. Thus the chance that users might see a correlation between the search term entered and the ad displayed might -contrary to ordinary Keyword Advertising- be higher. Seeing a correlation between the ad and the user query would thus be the key for the (main/essential) trademark function (indication of origin) being impaired.

From an unfair competition point of view the “distracting presumptive customers” argument (“Abfangen von Kunden vor dem Geschäftslokal eines Mitbewerbers) shall not be applicable due to the early stage of the search, while however the “passing off / slipstream riding/coattail-riding” argument (schmarozerische Rufausbeutung) might be valid one as users are more likely to see a correlation between their query and the ad. […]

Back in February this was all mere speculation. Today however I stumbled across following suggestion (ad?) while searching on searching for the term “Pizza“.


As the term “Pizza” is of course not covered by any (e.g. TM, or company name) protection this fact/screenshot on its own isn’t too exciting, but I think things would indeed get very interesting if Google were to expand this service also to other (probably even protected) terms and to other countries…

*’Why Buy an Imitation?’: Acts of Unfair Competition Through Keyword Advertising

Advertisers should better not imply in their keyword ads that their competitors are selling cheap counterfeit products of inferior quality.

Eric Goldman mentioned this case (Morningware, Inc. v. Hearthware Home Products, Inc.) on his blog in mid-November 2009.

Morningware and Hearthware (=NuWave) both offer “counter-top electric ovens“. On their websites both companies point out that they hold “Worldwide patentsetc. The products seem to targeted at people who first learnt about this product by telemarketing (“As Seen on TV“). The products in fact indeed look almost identical. Please see here and here. To summarise: both companies appear to be selling portable, electrical ovens at an impressive price (above 100 USD) to most presumably couch-potatoes-customers who appear to be likely to be convinced/tricked into the purchase of such a product by marketing claims such as “worldwide patent” and “most affordable way of cooking” or extra “free” items, such as e.g. “the Custom Carrying Case” and “FREE Two NuWave Twister Multi-Purpose Blenders”.

The defendant has booked the plaintiff’s trade mark to trigger his ads. What makes the case so interesting however is the text of the Ad by Heartware: “The Real NuWave ® Oven Pro Why Buy an Imitation? 90 Day Gty.

sample-ad created by the author

Because the defendant had not referenced the plaintiff’s trademark in the ad copy, Google would not act on behalf of the plaintiff, meaning that the trademark owner had to go to court to fight against the display of this ad. For a summary of Google’s TM policy, see here.

As I am currently working on the unfair competition part of my thesis, § 7 of the Austrian UWG (law on unfair competition) immediately came to my mind, which forbids entrepreneurs from using false statements/derogatory speech in advertising. So, while totally pointless and derogatory statements are covered by the sweeping clause of § 1 UWG, false (factual-)statements (that could however be proved to be true) are sanctioned by § 7 UWG.

The OGH has always interpreted the meaning of the term statement widely, so implicit, indirect or subtle statements are also covered.[0] Furtermore it is not necessary to explicitly name the competitor, its enough if he is “obviously affected” by the statement. [1]

The Austrian Supreme Court has thus ruled that following statements to be factual” statements: that a competitor’s product is a “almost copy” („weitgehende Kopie”; [2]), that a competitor’s product is a “discount product” („Diskontprodukt”; [3]), that a competitor’s product is “rubbish ” („Klumpert”; [4]), the claim that a competitor is violating intellectual property rights through its products (Patentrechtsverletzung [5]).

Now looking at the AdWord at hand I can spot various indications pointing towards my assumption that such an ad, displayed in Austria (or: directed at uses in Austria) would lead to the application of § 7 UWG and thus would find that the ad constitutes an act of unfair competition as the the ads implies that the plaintiff”s products are a “cheap” (inferior) “copy” (counterfeit) of a “®“- protected (patent or trademark protected) product.

This, together with the fact that users exposed to this ad were searching for the trademark of the plaintiff, amounts to stating that the plaintiff is selling cheap counterfeits of inferior quality and would thus, if not proven true,  constitute an act of unfair competition under Austrian law. Thus, the defendant would most probably (in my opinion this is not a case of Art 10 ECHR; freedom of speech) be subject to an obligation for omission, damages and revocation.

[0] Handig in Wiebe/Kodek (Hrsg) UWG, § 7 Rz 25ff.
[1] OGH 18.03.1997, 4 Ob 47/97h –Staubfrei– wbl 1997, 309 [Schmidt].
[2] OGH 24.07.1976,  4 Ob 320/76 – Stahlkanalverbau– ÖBl 1977, 11.
[3] OGH 29.01.1991, 4 Ob 5/91 – Diskontprodukt – ÖBl 1991, 224 = ecolex 1991, 331.
[4] OGH 03.10.1972, 4 Ob 344/72 – Espressomaschinen– ÖBl 1973, 105.
[5] OGH 01.06.1999, 4 Ob 72/99p – Spritzgusswerkzeuge– ÖBl 2000, 35 = GRUR Int 2000, 558.

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