Be careful with your AdWords: The German Federal Court of Justice sets a limit on the use of keywords for online advertising

A reseller offering both trade mark goods and competing products is not precluded from using the trade mark in advertising, provided that the reseller safeguards the legitimate interests of the trade mark owner. The German Federal Court has found that if a trade mark is used misleadingly in advertisements originating from a Google search resulting in the exploitation of a trade mark in a way that guides the public to third-party products, such use may provide a ground for the trade mark owner to oppose the use of the trade mark.

The Case

Ortlieb is a German manufacturer of travel bags, bike bags and backpacks made of waterproof and durable materials. They have registered the word mark “ORTLIEB” as a German and EU trade mark. Ortlieb does not supply Amazon directly with its products, but they are available on the Amazon website through third parties, so called “marketplace sellers”. Both Amazon and marketplace sellers also offer similar products from other manufacturers.

Amazon had purchased several Google AdWords that contained the term “Ortlieb”. For example, when searching for Ortlieb along with the terms “Fahrradtasche” (bike bag), “Gepäcktasche” (luggage bag) or “Outlet”, the search results contained corresponding advertisements from Amazon. Furthermore, the advertisements showed links to Amazon’s website (and the respective URL which contained the search terms) where a mixed range of products were displayed from both Ortlieb and competing manufacturers.

Ortlieb claimed that such use of a sign identical to its trade mark “ORTLIEB” within Google advertisements for products other than its own constituted trade mark infringement.

The Judgment

The German Federal Court of Justice (file no. I ZR 29/18) confirmed the legal assessment from previous decisions. The Court decided that the main function of the “Ortlieb” trade mark in providing an indication-of-origin is affected if it is being used, through the purchase of Google AdWords, in connection with the advertisement of identical goods sold by competing companies.

Amazon was held responsible for linking the Google advertisements to the relevant Amazon subpages, because it selected the Google AdWords that would trigger its advertisements to appear. The Court ordered Amazon to cease and desist its use of the Ortlieb trade mark.

Whether use of a term, which is identical to a trade mark, as a Google AdWord constitutes an infringement of its origin function depends on the specific appearance of the advertisement. The origin function will be violated if internet users cannot, or with difficulty, detect whether the products that are being advertised originate from either the trade mark proprietor or a third party.

In the present case, the Court ruled that the relevant public will expect to see Ortlieb products when shown an advertisement that exclusively shows the term “Ortlieb”. It based its assessment particularly on the display of the URL of the linked Amazon webpage containing the term “Ortlieb”. The average internet user will not expect to find products from other manufacturers behind such an advertisement. It was decided that a trade mark proprietor can object to the misleading use of its trade mark whereby the relevant public is guided to a competitor’s product.

Consequences When using Google AdWords that are identical to third party trade marks, it must be carefully considered whether such use could be determined as misleading to the relevant public. Such an assessment should be based on the specific appearance of the advertisement.

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