BGH decides in eis.de/Bananabay "AdWords" case

While we are still digesting the ECJ’s guidance concerning AdWords in eBay v L’Oreal (C-324/09, see the IPKat's post here) the German Federal Supreme Court (Bundesgerichtshof) has today finally published its eagerly and long awaited decision in Eis.de (otherwise known as the Bananabay case: see our earlier reports here, here and here).

The decision was already handed down in January 2011 but was only published today, with impeccable timing by Germany’s highest court in civil matters. By way of reminder, Eis.de 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 ECJ:

"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 ECJ's response in eis.de (Case C-91/09) -- this Kat has checked: Curia still does not offer an English translation and probably never will... :

"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."

Please find this Kat’s translation of the court’s head note (Leitsatz) in Bananabay II (case reference I ZR 125/07) set out below:

“Where a third party provides a sign as a keyword to a search engine operator 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 a specially marked advertising block set apart from the list of search results (AdWords advertisement), then this will not be use of that trade mark in the sense of Article 5(1)(a) of Directive 89/104/EEC, § 14 (2) No. 1 German Trade Mark Act where 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 and as long as the stated domain name indicates a different economic origin.”

In other words, the Bundesgerichtshof has thus confirmed that users can book a third party trade mark as a keyword, for example as a Google Adword, as long as the resulting ad (or sponsored link) is shown in a specially marked advertising block that is visually set apart from the list of natural (organic) search results. What is not allowed is any reference in that ad to the trade mark itself, the trade mark proprietor or the trade mark proprietor’s products and the URL shown in the ad must also indicate a different economic origin. Internet users looking at the ad must be able to realise that this is not the trade mark proprietor offering its goods or services but a third party. The Bundesgerichtshof has now helpfully told us how the ECJ’s guidance in Google France (no “vague” ads) should be applied by German courts.

Some German observers say that this decision equates to the Bundesgerichtshof giving its blessing to the AdWords business model. This Kat thinks that this (in her view) clear decision finally creates some legal certainty, which surely must be applauded.

Please click here to read the court's 17 pages decision (in German).