Trade marks with reputation harder for rivals to use in keyword advertising following German court ruling, says expert

Munich-based intellectual property law expert Igor Barabash of Pinsent Masons, the law firm behind Out-Law.com, said that a regional court in Frankfurt has ruled that the owner of a trade mark can claim its rights had been infringed by a rival on the basis that it had built up a reputation in that mark which its rival had taken unfair advantage of in a keyword advert online.

"The general understanding of the use of third party trademarks within Google AdWords has been that such use is admissible as long the ad does not contain the trade mark itself and is clearly marked as an 'ad' when it appears in Google's search results," Barabash said. "However, the ruling in this case shows that the owners of the concerned trade marks still have the possibility to object against such use in cases where the trade mark has sufficient reputation and the ad is taking advantage of such trademark."

"However, the decision shows that trade mark owners must overcome a big hurdle to provide sufficient evidence that the trade mark has sufficient reputation to overrule the general AdWords principle, since the proof of such reputation is hard to provide" he said.

The Frankfurt court was ruling in a case referred to it by Germany's Federal Supreme Court (FSC). The FSC had asked the Frankfurt court to determine whether adult entertainment business Beate Uhse had sufficiently reputational trade mark rights in its name to assert that a rival business, Eis.de, had infringed its rights within a keyword advert on Google.

Eis.de had used the Beate Uhse trade mark as a tag with which to prompt an advert of the savings available via its own erotic shop – "guaranteed savings up to 94%". The ad appeared when users searched for Beate Uhse using Google's search engine.

However, the Frankfurt court said that Beate Uhse had been able to demonstrate that its trade mark has sufficient reputation, in accordance with EU trade mark laws, to be said to have been taken unfair advantage of by Eis.de.

The court ruled that the average internet user would perceive Beate Uhse's trade mark negatively following Eis.de's advert. This is because, in comparison to what Eis.de was offering, the products Beate Uhse were selling on its own website would be seen as heavily overpriced and because customers were enticed to use the Eis.de site instead following Eis.de's advert which relied on Beate Uhse's trade mark, it said.