Is it legal to use someone else’s trademark in Internet advertising?
Use of other people’s trademarks as keywords may constitute trademark infringement if it is done without consent of the holder and the advertising steered to by the keywords may suggest legal or commercial ties between the advertiser and the holder.
This was the holding in Portakabin Ltd. v Primakabin BV (Case No. C-558/08) handed down by the European Court of Justice on 8 July 2010.
Use of someone else’s trademark as keywords in a search engine to steer to a specific website, advertisement, or sponsored link of the advertiser (typically a competitor of the holder) is common practice on the Internet.
In the ECJ case, in the AdWords referral service offered by the Google search engine, Primakabin paid for the keywords “portakabin,” “portacabin,” “portokabin” and “portocabin.” The last three variations in the keywords (with minor spelling errors) were chosen so that Internet users would not miss the Primakabin ad if they mistyped the keyword. Entering one of these keywords in the Google search engine displayed a sponsored link to the Primakabin website.
“Portakabin,” however, is the trademark of a competitor, Portakabin, which produces portable metal structures. Primakabin itself produces metal structures, but also leases and sells used metal structures from other producers, including Portakabin.
The ECJ ruled that if the content of the advertising in the sponsored link does not alert the user of the source of the advertised goods (i.e. whether they come from the holder of the trademark or an affiliated business, or from an unrelated third party), there is trademark infringement. This also applies to terms containing slight spelling errors differing from the holder’s mark. The advertiser also may not rely on a claim that it is using the competitor’s trademark for informational purposes, which would be deemed dishonest.
Use of a keyword that corresponds to a trademark used by the rightful owner may be regarded as legal only under certain conditions. Use of the competitor’s trademark may not suggest commercial or legal affiliations with the holder or trade on the holder’s renown. The trademark holder may not, however, prohibit use of the trademark by a seller of used trademarked goods in order to inform customers of its own business, which in addition to sale of goods of this brand also includes sale of other used goods, unless resale of the other goods may harm the image of the trademark holder because of the volume, presentation or quality of the advertiser’s activity.
The conclusion that may be drawn from this ruling is that use of trademarks in keywords is permissible only when the advertisement that appears when the keyword is entered is not misleading, and the advertiser does offer goods with the trademark term used in the keyword, even if it also sells other brands. In the latter case, the nature of the competitor’s activity must not endanger the image of the trademark holder.