More Adword fallout, the Portakabin case

The ECJ has given a further ruling, following its decision in the Louis Vuitton case, on the question of whether use of a third party’s trade mark (and misspelled variants of it) as an internet search engine keyword is capable of amounting to trade mark infringement.

Facts

Portakabin manufacture mobile buildings. They own a Benelux trade mark for the word PORTAKABIN for goods in classes 6 and 19. Primakabin are in the business of selling second-hand mobile buildings, including those manufactured by Portakabin.

Primakabin selected the word PORTAKABIN (and various misspellings of it including PORTACABIN, PORTOKABIN and PORTOCABIN) as a Google AdWord. Each time an internet user searched the word PORTAKABIN on Google (or one of the misspellings) Primakabin’s advert (consisting of the words “used portakabins” and a link to its website) appeared as a sponsored link on the results page.

Portakabin brought proceedings for trade mark infringement in the Dutch court. Several questions were referred to the ECJ.

Relevant law

Article 5 – Trade Marks Directive 89/104/EEC

Article 5(1)(a) entitles a trade mark owner (Portakabin) to prevent a third party (Primakabin) from using a sign in the course of trade which is identical to its own trade mark.

There must be an adverse effect on the function of the trade mark as a guarantee of origin. This will depend on the manner in which the advert is presented. There will be an adverse effect if the advert does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to originate from the owner of the trademark or an economically linked undertaking.

The misspellings of the trademark, PORTACABIN, PORTOKABIN and PORTOCABIN, could be identical to the trade mark only if the differences were so insignificant as to go unnoticed by an average consumer. If the misspellings were not insignificant then it would be for the national court to decide whether they were similar to the trade mark. If they were judged to be similar then there must also be a likelihood of confusion, namely a belief that the mobile buildings came from the same, or an economically linked, undertaking.

Defence under Article 6 TM Directive?

Under Article 6(1)(b) a trade mark owner cannot prohibit a third party from using, in the course of trade, indications concerning a characteristic of the goods or services. Internet search engine key words were not generally used to indicate such characteristics and therefore it was unlikely this would provide a defence to Primakabin.

Under Article 6(1)(c) a trade mark owner cannot prohibit a third party from using, in the course of trade, a trade mark where it is necessary to indicate the intended purpose of a product or service. The ECJ held that this was not restricted to situations involving accessories or spare parts. It was for the national court to decide whether Primakabin’s use of the word PORTAKABIN was to enable them to inform the public of a practical link between their goods and the goods of Portakabin so as to bring the use within Article 6(1)(c).

Article 6(1)(c) contains an important qualification that use must be in accordance with honest practices in industrial or commercial matters. However in circumstances where an advertiser deliberately chooses another business’ trade mark for its advert it is unlikely to be able to genuinely claim that it was unaware of the ambiguity caused by such use.
Defence under Article 7?

Article 7(1) provides that a trade mark owner cannot prohibit use of its trade mark in relation to goods which have been put on the market under that trade mark by the owner. This could potentially provide a defence to Primakabin since it had permission to resell Portakabin’s goods and a reseller is entitled to use the trade mark which the goods were originally sold under in order to bring to the public’s attention the further commercialisation of the goods.

The relevant question was whether Portakabin could show it had a legitimate reason to oppose further commercialisation of its goods (Article 7(2)). If Primakabin gave the impression of a commercial connection between its business and that of Portakabin this could be a legitimate reason since such advertising was not essential to the resale of goods.

The ECJ held that it was for the Dutch court to assess whether Primakabin’s advert would enable a normally informed and reasonably attentive internet user to ascertain whether Primakabin was independent from Portakabin or whether it was economically linked to it. However the ECJ did give some guidance to the Dutch court when deciding the issue:

• Use of additional wording such as “second-hand” and “used” in conjunction with the trade mark did not necessarily create the impression of an economic link between the two businesses or that the advert was detrimental to the reputation of the trade mark;
• If however a reseller de-branded the trade marked goods without consent and replaced it with its own mark (as Primakabin was alleged to have done) the trade mark owner was entitled to prevent the reseller using its trade mark to advertise the resale;
• The fact that the reseller sold other goods alongside the trade marked goods did not prohibit him using the trade mark providing the sale of the other goods damaged the image of the trade, e.g. because of their volume or poor quality.

Comment

The ECJ has once again confirmed the need for advertisers to make clear that there is no commercial connection between it and the trade mark owner whose mark is being used. If this is not clear then Article 6(1) will rarely provide a defence. Whilst there may be a defence under Article 7 the ECJ has provided helpful guidance on when a trade mark owner may be able to legitimately oppose such use (although they cannot prevent an advertiser using the words “used” or “second-hand” alongside the relevant trade mark).