Tuesday, July 13, 2010

Keyword Advertising Still at Issue in EU

The European Court of Justice (EJC) decided a new keyword advertising case last Thursday involving two competitors use of Google's Adword advertising. As it seems with all keyword cases, the result will seem shocking to some and perfectly appropriate to others.

The case (Portakabin vs. Primakabin) involved two sellers of mobile buildings. Make sure you read closely. The plaintiff's corporate name is PORTAkabin and the defendant's name is PRIMAkabin. Got it?

Now, when I read "mobile buildings," I think "trailers." While Portakabin does sell some trailer-like buildings, they also sell some fairly impressive modular buildings, like this:

As you may guess, Portakabin is a registered Benelux trademark of Portakabin, Ltd.

Primakabin, on the other hand, sells new and used mobile buildings as well, although, from their website, it does not appear that the buildings they sell are generally as elaborate as the one above. However, Primakabin does sell used PORTAKABIN brand buildings. Here is a screen shot from Primakabin's website showing used PORTAKABIN brand buildings for sale.

The trouble started when Primakabin started using the PORTAKABIN trademark as a Google Adword to drive traffic to Primakabin's website. When an end user searched on the word "Portakabin," Primakabin's ad was displayed. The header of the ad read "used portakabins."

The Amsterdam trial court judge found that Primakabin's use of the PORTAKABIN mark was not infringement. The Amsterdam appellate judge found just the opposite and held that Primakabin had to stop using PORTAKABIN in advertising and, it could not use PORTAKABIN as a keyword if the ad had a link to a website that offered competing products. As you can see, this is clearly an issue about which reasonable, well informed and educated people can disagree.

On appeal, the ECJ found that it was not trademark infringement. Here are some interesting things to note about the case.

First, Primakabin was not using the PORTAKABIN adword merely to drive traffic to Primakabin's website. Primakabin was (and does) in fact sell used PORTAKABIN brand products.

Second, Primakabin was using the PORTAKABIN word solely to describe and identify the source of origin of the used PORTAKABIN brand buildings that were for sale.

From these first two observations, in the US, we might have said that, in the absence of the use as a keyword, this looks like a fair use. While the ECJ court didn't use the phrase "fair use" it is clear that this was part of the rationale for their holding.

Third, from the trademark owners perspective, clearly the use of the PORTAKABIN trademark as a Google Adword was likely to trade off of the goodwill associated with the PORTAKABIN trademark and result in the use of the trademark to drive traffic to the competitor's website where other brands of competing products were sold. This issue clearly caught the attention of the Amsterdam appeals court judge. The ECJ, however, ruled that the fact that competing goods were being sold on the same website was not enough to stop Primakabin from being able to use the PORTAKABIN trademark as a keyword, unless the volume or quantity of such other competing goods could lead to tarnishment of the PORTAKABIN mark.

On the one hand, this seems reasonably fair for resellers of branded goods. On the other hand, however, it is hardly satisfying compensation to trademark owners who see their brand being used as bait to draw potential customers to buy competing products (even if some of their own products are included in the mix).

Finally, the ECJ evaluated whether there was a likelihood of confusion by referring to the hypothetical "normally informed and reasonably attentive Internet user." However, the court did not indicate that there was any empirical evidence as to the actual end user experience of such users with respect to this particular case. Rather, they seemed to simply intuit what such a user's experience would be. So there you have it. The standard for likelihood of confusion in keyword advertising cases in the EU is now whether the use of the keyword makes it difficult for the "normally informed and reasonably attentive Internet user" to distinguish the trademark owner's goods from other goods.

Somehow, I don't think we've heard the end of this issue in the EU.