The German Federal Court of Justice (Bundesgerichtshof) is the latest in a long line of courts to hear a case relating to the use of Google AdWords and in this case, use of the “Bananabay” mark. Christina Schulte-Braucks summarises the guidance provided by the Court to advertisers to ensure compliant AdWords practice.
Topic: Online Advertising
Who: BBY Vertriebsgesellschaft mbH ("BBY") vs. Eis.de GmbH
When: 13 January 2011
Where: German Federal Court of Justice (Bundesgerichtshof)
Law stated as at: 29 July 2011
The claimant, BBY, who offered erotic products on its website "www.bananabay.de", holds a German trade mark registration for the wordmark "BANANABAY" which is registered in respect of numerous goods and services. The defendant, Eis.de GmbH, offers a similar product range through its online shop "www.eis.de/erotikshop". Eis.de used the designation "bananabay" as a keyword in order for its online advertisements to appear as sponsored links under Google’s AdWords system when third parties searched for the word "bananabay".
When the term "bananabay" was searched for via the Google, the following ad would appear:
Erotic products for 0,00 €
Discount campaign until 20.07.2006!
Savings of up to 85% guaranteed
BBY sent a warning letter to Eis.de claiming trade mark infringement, obtained an interim injunction and eventually filed a lawsuit which has now been decided at last instance.
CJEU reference made
The two previous courts of first instance, the District Court and the Higher Regional Court of Braunschweig, had found in favour of the claimant. When the dispute first reached the German Federal Court of Justice, the Court referred a fairly straightforward question to the EU Court of Justice (CJEU) in January 2009, essentially asking for the following clarification regarding AdWords advertising: Is there trade mark use in the sense of Art. 5 (1) a) Trade Marks Directive where another’s trade mark is given as a keyword in order to make a promotional link appear when searching for that sign through Google, if that link is marked as a sponsored link and the advertisement itself does not contain the sign as such nor any reference to the trade mark proprietor or the products offered by him?
The answer the CJEU provided in March 2010 (Case C-91/09) was, however, not very enlightening and did little to clarify the practical requirements for permissible AdWords advertising. Instead of answering the question at hand, the Court mainly reiterated its "Google France" decision (Judgement of 23 March 2010 in Cases C-236/08 to C-238/08), whereas AdWords advertising for identical goods or services may amount to trade mark infringement where the advertisement is such that the average internet user is not able, or only with difficulty, to establish whether the goods or services advertised originate from the trade mark proprietor or an economically linked undertaking, or, on the contrary, from a third party. Back before the German Federal Court, the judges faced the task of putting these European guidelines to practice.
Summary of the relevant laws
§ 14 (2) No. 1 of the German Trade Mark Act, which corresponds to Art. 5 (1) a) of the Trademarks Directive, states that third parties are prohibited from using in the course of trade without the trade mark proprietor’s consent, a sign which is identical to the trade mark for goods or services identical to those for which the trade mark enjoys protection.
The Federal Court of Justice first had to examine the lower court’s decision which was the subject of the defendant’s appeal. The Regional Court of Braunschweig had found that the use of a trade mark as an AdWord amounted to trade mark use for the purposes of § 14 Trade Mark Act and that it made no difference whether the search result was listed in the advertising section or amongst the "natural results" because the search results were manipulated by the use of AdWords. Internet users would thus not know how these results had been generated and could think that products of the claimant were offered on the defendant’s website.
The Federal Court of Justice overturned this decision and found that, although the trade mark BANANABAY had been used by the defendant in advertising for its own goods, this use did not occur "as a trade mark". Citing the ECJ’s judgements in "L’Oréal/Bellure" and "Google France", the Court held that the proprietor of a trade mark could not prohibit the use of his mark where this does not affect one of the key trade mark functions.
The Court then proceeded by examining whether the use by the defendant of the sign BANANABAY as an AdWord could impair the trade mark’s functions and came to the conclusion that this was not the case. Again citing "Google France" and the CJEU’s referral decision, the Court established that neither the trade mark’s function as a badge of origin nor its advertising function were affected by the AdWords advertisement, given that the ad did not, in any way, point to the trade mark owner BBY or to its products and was therefore not "vague" in accordance with European jurisdiction.
Consequently, the Court found that no link between the two competitors BBY and Eis.de was suggested by the advertisement and that, because it appeared under the sponsored link heading, the average internet user would very well understand this.
Another argument in favour of this view was that the defendant’s link and domain name was entirely different from the claimant’s trade mark. Furthermore, the ad did not make reference to BBY’s products and thus did not affect the advertising function of the mark in question.
Why this matters:
This judgement is of particular interest to all companies wishing to use AdWords in advertising. Unlike some previous decisions by European Courts, this judgement provides some practical advice on how to avoid trade mark infringement. First of all, in order to exclude any likelihood of confusion or "vagueness", the advertiser should not display the original trade mark that he used as an AdWord in the sponsored link advertisement. Furthermore, he should avoid including any unnecessary references to the trade mark owner or his (competing) products. In addition, care should be taken that the link or domain name is not similar to the original trade mark used as an AdWord.
Osborne Clarke, Cologne