Decision in the German AdWords referral

More AdWords ...! A quick lunch time post to let our readers know that the European Court of Justice's (CJ) decision in the German AdWord referral in " GmbH v BBY Vertriebsgesellschaft mbH", in short: "" (case C-91/09) has now been published. The case was originally called "Bananabay" in Germany (case reference: I ZR 125/07). For more background on this case, please see the IPKat's earlier posts here and here.

In a mere court order of 26 March 2010, the ECJ has now also answered the German Federal Supreme Court's (Bundesgerichtshof) question on AdWord use. The outcome is a bit of an anti-climax and if you think you have read it all before, well, you are not mistaken. The CJ's response in is almost identical to that given in the Austrian BergSpechte referral of 26 March 2010 (Case C-278/08, see the IPKat's post here) and very similar to the CJ's responses in Google France (joined Cases C-266 to 238/08, see the IPKat's post here and here) of 23 March 2010. The CJ cites joined Cases C-266 to 238/08 in almost every paragraph of Most notably the court refers to paragraphs 65-73, 79, 81, 83 -84, 89 - 90, 98 of cases C-266 to 238/08.

Please note that this blog post is based on the IPKat's translation of the German version of the order since we do not yet have an official English translation. The case was based on the following facts: the claimant and the defendant both sold adult entertainment products. The claimant who owned a trade mark registration for "bananabay" sought to stop its competitor's use of that trade mark as an 'AdWord' claiming trade mark infringement and seeking damages.

The Bundesgerichtshof had referred the following question to the CJ:
"Is there use for the purposes of Article 5(1)(a) of Directive 89/104/EEC where a third party provides as a keyword to a search engine operator a sign which is identical with a trade mark, without the consent of the proprietor of that trade mark, so that, on inputting the sign identical with the trade mark as a search term into the search engine, an electronic promotional link to the third party's website advertising identical goods or services appears in an advertising block set apart from the list of search results, that link is marked as a sponsored link and the advertisement itself does not comprise the sign nor contain any reference to the trade mark proprietor or to the products it is offering for sale?"
Here is the IPKat's translation of the German version of the CJ's response:

"Article 5(1)(a) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks must be interpreted as meaning that the proprietor of a trade mark is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical that trade mark 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, in the case where 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 trade mark or by an undertaking which is economically connected to it or, on the contrary, originate from a third party."

Well, says the IPkat, no surprises here then?

Wearing her German hat and munching away on her lunch time salad Merpel muses: nein, I am really not surprised either. The CJ's reasoning in large parts appears to be an extension of the Bundesgerichshof's advertising and technology friendly precedents in the pcb and Beta-Layout cases. However, while it is quite certain that the Bundesgerichtshof will decide that the origin function is not adversely affected, don't we think that the Bundesgerichshof might have to fine tune its line of argumentation just a tiny bit in relation to company names and AdWord use, with the CJ holding that it is not enough that the triggered ad is clearly labelled as a "sponsored link", the ad also must not be vague? What do our (German) readers think? And one more thing, why did the CJ only hand down an order and not a full judgment for the German referral?
Please click here to read the CJ's order in its German/French entirety.
Decision in the German AdWords referral Decision in the German AdWords referral Reviewed by Birgit Clark on Tuesday, May 11, 2010 Rating: 5


  1. quick! very quick again Kats!

  2. Dear Cat,

    Faster than the speed of light. Almost at least. Well..

    Taking into account that the BGH in its Bananabay decision [I ZR 125/07, par 19] has already stated that would be "rather far fetched" to assume that users would establish a connection between the search term entered and the ad displayed or to assume, on the basis of the ad, an indication about the origin of the advertised goods or services... I do expect the BGH to rule that ads not containing the TM will not" adversely affect" the function of indicating origin.

    So everybody, thumbs up for AdWords :)

    ...oh, sorry forgot about cats and not having thumbs... ;)

  3. hello again austrotrabant

    yes, i obviously agree that this is exactly what the bgh will say, that the origin function is not adversely affected and the tech savvy German consumer will understand how sponsored links "work". that is what i mean when i say that the cj's "reasoning in large parts appears to be an extension of the Bundesgerichshof's advertising and technology friendly precedents".

    i can see some differences dogmatically (i am sure you will agree) and i do maintain that some fine tuning might be necessary but the overall argument is the same.

    ps: indeed we have paws....

  4. The answer to why the CJ only handed down an order can be found in paragraphs 14-16:

    By virtue of article 104(3) of the Court of Justice Rules of Procedure, "Where a question referred to the Court for a preliminary ruling is identical to a question on which the Court has already ruled, or where the answer to such a question may be clearly deduced from existing case-law, the Court may, after hearing the
    Advocate General, at any time give its decision by reasoned order in which reference is made to its previous judgment or to the relevant case-law."


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