Circumstances in which resellers can use third-party mark as keyword outlined

European Union
The Court of Justice of the European Union (ECJ) has handed down its fourth ruling in as many months on the use of third-party trademarks as keywords which enable sponsored advertisements (as opposed to natural search results) to be displayed in internet search engine results following a search on a term incorporating the mark. The latest judgment, Portakabin Ltd v Primakabin BV (Case C-558/08, July 8 2010), goes further than the previous decisions by providing guidance on the use of third-party trademarks as keywords to advertise websites selling genuine goods under the marks.

This case was referred to the ECJ by the Supreme Court of the Netherlands in trademark infringement proceedings brought by the owner of the PORTAKABIN mark, Portakabin Ltd, which manufactures and supplies mobile buildings, against Primakabin BV. Primakabin sells and leases new and second-hand mobile buildings including those manufactured by Portakabin. Portakabin sought to prevent Primakabin from using the keywords 'portakabin', 'portacabin', 'portokabin' and 'portocabin' to display sponsored advertisements for Primakabin’s business (for further details please see "Supreme Court refers questions to ECJ in keying case"). 

In Google France (Joined Cases C-236/08 to C-238/08), the ECJ confirmed that a trademark proprietor can prevent the unauthorized use of a keyword which is identical with, or similar to, its trademark, in relation to goods or services identical to those in respect of which the mark is registered under Article 5(1) of the First Trademarks Directive (89/104/EEC) (now replaced by the Trademarks Directive (2008/95/EC)), where that advertising does not enable average internet users, or enables them only with difficulty, to ascertain whether the advertised goods or services originate from the trademark proprietor or from an undertaking economically linked to it (for further details please see "Google's use of trademarks as keywords does not constitute infringement").

In the case at hand, Primakabin sought to defend the action under:

  • Article 6(1)(b) of the directive, which concerns the use of a trademark to indicate characteristics - such as the kind, quality, quantity and intended purpose - of the goods or services; and
  • Article 6(1)(c), which concerns the use of the mark where it is necessary to indicate the intended purpose of a product or service. 
The ECJ confirmed that, although advertisers can seek to rely on these defences, they were unlikely to succeed where their keyword use falls within Article 5(1), as it would be hard to show use in accordance with honest practices in industrial or commercial matters. 

The ECJ also confirmed that an advertiser might rely on the exhaustion defence under Article 7 whereby a trademark owner cannot prohibit use of the mark in relation to goods which have been put on the market in the European Economic Area under that trademark by the proprietor or with its consent. Article 7 contains the proviso that exhaustion will not apply where there exist legitimate reasons for the proprietor to object, especially where the condition of the goods is changed or impaired after being put on the market.

While leaving the national court to apply the ruling to the facts of the case, the ECJ concluded as follows:

  • Use of the wording 'used' or 'second hand' in advertisements for goods being resold would not cause serious detriment to the mark’s reputation or give the impression of an economic link with the advertiser. 
  • National courts must find that there is a legitimate reason to oppose use of the mark where the reseller has removed the mark from genuine goods and replaced it with its own label bearing a different mark. 
  • National courts must find that a specialist second-hand goods reseller cannot be prevented from using a third party’s mark to advertise its resale activities while also selling other second-hand goods, unless the sale of those other goods in terms of their volume, presentation or poor quality of those goods risk seriously damaging the image of the proprietor’s trademark.
Louisa Albertini, Field Fisher Waterhouse LLP, London

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