Supreme Court considers use of trademarks in metatags for first time

The German Federal Supreme Court has ruled for the first time on the issue of whether the use of another party's trademark or company name in the metatags of a website violates trademark law (I ZR 183/03, May 18 2006). The question had proved controversial in Germany, with various courts coming to different conclusions (see Metatag issue divides German courts and Metatag use of trademark is not infringement).

In the case at hand, Impuls Medienmarketing GmbH, an online provider of insurance consulting services, sued the defendant for trademark infringement on the grounds that it had used the term 'impuls' in a domain name and as a metatag.

The case centred on the question of whether the use of another party's mark in metatags is use of the mark in commerce. According to the German Trademark Act (in line with the First Trademark Directive), the owner of a mark is entitled to prevent third parties from using its mark if and only to the extent that the mark is used in the course of trade.

The first instance court held that the use of the term 'Impuls' in the metatags of the defendant's website was not infringing because metatags are not visible to internet users and thus cannot be perceived by the public as an indication of origin, unlike domain names.

The Supreme Court rejected this opinion and held that it does not matter whether the term used in metatags is visible to internet users, since they use search engines to review the large number of websites containing the terms they are looking for and the search engines, as a rule, also screen the underlying code. According to the court, the decisive facts were that (i) the use of the mark in the metatags has an impact on the selection process carried out by the search engines, and (ii) the users may be diverted to a website containing the mark in its metatags. Therefore, the third party's mark is used to point to the website containing the respective metatag and the goods or services offered on that website. The court concluded that such use violates the exclusive rights conferred to the owner of the mark.

Significantly, the court suggested that the use of another party's mark in metatags may be allowed in two cases:

• firstly, in cases of admissible comparative advertising pursuant to Directive 97/55/EC on misleading advertising - that is, if a competitor accurately compares its goods or services with the goods or services of the owner of the mark used in the metatags; and
  
  
• secondly, in cases of admissible use of a third party's mark - that is, where it is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts, provided that in either alternative such use is in accordance with honest practices in industrial or commercial matters.

Matthias Sonntag, Gleiss Lutz, Stuttgart