PART II. The Preliminary Ruling Decision in the Case of Google vs. Louis Vuitton Concerning the AdWord Service and its Impact on the Community Law

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GONGOL, Tomáš. The Preliminary Ruling Decision in the Case of Google vs. Louis Vuitton Concerning the AdWord Service and its Impact on the Community Law. The Amfiteatru Economic Journal. 2013, vol. 15, č. 33, s. 246-260. ISSN 1582 - 9146.

2. Other decisions of the Court of Justice in similar cases

2.1. The decision of the Court of Justice in BergSpechte vs. trekking.at Reisen

BergSpechte Company is the proprietor of the Austrian figurative and word mark which is registered, inter alia, for company organising tours and sport and cultural activities, Specifically, Class 25, 39 and 41 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 1957. Similarly, the company trekking.at Reisen deals with the organization of travelling. When an internet user entered the word ‘Bergspechte’ as a search term in that search engine, a trekking.at Reisen advertisement appeared as a ‘sponsored link’ under the heading ‘Äthiopien mit dem Bike’ (‘Ethiopia by bike’). And it was similar to entering a phrase „Edi Koblmüller“ which forms part of the BergSpechte trademark.

In its decision issued a few days after the decision in Google vs. Louis Vuitton, the Court of Justice came to conclusions based on previous decisions. In particular, that the trademark proprietor is allowed to prohibit advertising, in case when the keyword is identical with or similar to that trademark which that advertiser has, without the consent of that proprietor, selected in connection with an internet referencing service, goods or services identical with those for which that mark is registered. There is always required so-called test of normally informed and reasonably attentive internet user, that is to say, whether that advertising does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trademark or by an undertaking which is economically connected to it or, on the contrary, originate from a third party (Gielen, 2010). So, if the use of the trademark in this way is liable to affect one of the basic functions of the trademark, namely the function of indicating origin.

2.2. The decision of the Court of Justice in Portakabin vs. Primakabin

Portakabin Ltd manufactures and supplies mobile buildings and is the proprietor of the Benelux trademark PORTAKABIN.  Primakabin sells and leases new and second-hand mobile buildings. Apart from manufacturing and marketing its own units, such as work shelters or temporary offices, Primakabin is also engaged in selling and leasing used units, including those manufactured by Portakabin.  For the ‘AdWords’ referencing service, Primakabin chose the keywords ‘portakabin’ and its other derivatives. Originally, the heading of Primakabin’s ad, which appeared once one of the aforementioned words had been entered into the search engine, was ‘new and used units’. Subsequently, that heading was amended by Primakabin to ‘used portakabins’.

It is settled case-law (e.g. CASE C-337/95, CASE C-63/97) that, when trade-marked goods have been placed on the market in the European Economic Area by the trademark proprietor, a reseller, besides being free to resell those goods, is also free to make use of the trademark in order to bring to the public’s attention the further commercialisation of those goods.  In our case ( CASE C-558/08) trademark, the Court came to conclusion that the “fact that the reseller, through its advertising based on a sign identical with, or similar to, the trademark, gives the impression that there is a commercial connection between the reseller and the trademark proprietor, and in particular that the reseller’s business is affiliated to the proprietor’s distribution network or that there is a special relationship between the two undertakings, also constitutes a legitimate reason.”

The Court of Justice then leaves the consideration whether there is such legitimate reason in given case to the national courts. But it also mentions some clues for such a decision. Therefore, it cannot be held, merely on the basis of the fact that an advertiser uses another person’s trademark with additional wording indicating that the relevant goods are being resold, such as ‘used’ or ‘second-hand’, that the ad creates according to the Court (CASE 558/08 paragraph 84) “the impression that the reseller and the trademark proprietor are economically linked or that the ad is seriously detrimental to the reputation of that mark”. According to Gielen (2010) also a specialist reseller of second-hand goods under another person’s trademark cannot be prohibited from using that mark to advertise to the public its resale activities which include, in addition to the sale of second-hand goods under that mark, the sale of other second-hand goods, unless the resale of those other goods, in the light of their volume, their presentation or their poor quality, risks seriously damaging the image which the proprietor has succeeded in creating for its mark.

2.3. The decision of the Court of Justice in L’Oréal vs. eBay

In this case, there was a dispute between L´Oréal Company and eBay Company. The issue was also the use of the AdWords service, except that the dispute between the seller of detrimental products and Google Inc joined actively another subject – eBay Company. eBay enables prospective buyers to bid for items offered by sellers. It also allows items to be sold without an auction, and thus for a fixed price, by means of a system known as ‘Buy It Now’. Sellers can also set up online shops on eBay sites. An online shop lists all the items offered for sale by one seller at a given time. It also advertises some of the products sold on its marketplace using search engine operators such as Google to trigger the display of advertisements.

eBay Company has a special position because it acts both as a provider of information society services and as a customer of the Google AdWords service, but it does not stand as a direct user of the trademark.

eBay, by selecting in the Google search engine keywords corresponding to L’Oréal trademarks, caused to appear, as soon as internet users performed a search including those words with that search engine, a sponsored link to the website www.ebay.co.uk, accompanied by a marketing message about the opportunity to buy, via that site, goods bearing the trademark searched for. In such a situation, the operator of the online marketplace is an advertiser.

Unlike advertising their own services of online marketplace, eBay used keywords corresponding to L’Oréal trademarks to promote its customer-sellers’ offers for sale of goods bearing those marks, that use related to goods and services identical with those for which trademarks are registered. In that regard, the words ‘in relation to goods or services’ do not relate solely to the goods or services of a third party which is using signs corresponding to the trademarks but may also refer to the goods or services of third parties.

In regard to the fulfillment of the other condition necessary for the exercising of the right of the trademark proprietor to prohibit other people from using it, that is to say that using a keyword identical to his trademark is able to affect the functions of the trademark, the criterion of an average user should be applied (see decision above). From eBay’ liability point of view, the Court of Justice came to the same conclusions as in the case of the decision above in Google Inc vs. Louis Vuitton. The Article 14 (1) of the EC Directive No 31/2000 (exemptions from liability) shall apply to operators of online marketplace only if that the operator does not play an active role of such a kind as to give it knowledge of, or control over, those data. In our case eBay vs. L´Oréal it plays such role. This is seen in assisting sellers in order to enhance their offers for sale and to promote (e.g. in entering the keywords in the AdWords service).  

2.4. The decision of the Court of Justice in Interflora vs. Marks & Spencer

Interflora Inc. operates a worldwide flower-delivery network. The network of Interflora Inc. and Interflora British Unit (together ‘Interflora’) is made up of florists with whom customers may place orders in person or by telephone. Interflora also has websites that enable orders to be placed via the internet, those orders then being fulfilled by the network member closest to the place where the flowers are to be delivered. Marks & Spencer is one of the main retailers in the United Kingdom. One of those services is the sale and delivery of flowers. It is common ground between the parties that M & S is not part of the Interflora network. Using the ‘AdWords’ referencing service, M & S selected keywords ‘Interflora’, as well as variants made up of that word.

The Court reiterated the conclusions of previous decisions, especially of Google vs. Louis Vuitton and in our view added an interesting conclusion as to the condition of affection of trademark functions. We have already mentioned the criteria for intervention in the function of indicating origin, we have also said that within the search engine optimization services, there is no interference in the advertising function. The Court expressed itself to the intervention into one of other functions of the trademark, to the investment function. There is an intervention to the investment function, if the use of the trademark substantially prevents the proprietor from using his trademark to acquire or maintain the reputation which allows attracting consumers and retaining their loyalty.