Use of keyword through AdWords program constitutes unfair trade practice

The Specialized Division of the Milan Court, which has exclusive jurisdiction over IP-related matters, has issued its decision in the case opposing Multiutility SpA and Key21 Trading Company SpA.

Key21, the owner of the registered internet domain name 'www.Key21.com', alleged that Multiutility engaged in unfair competition by using Key21's domain name in sponsored links and, in particular, in conjunction with Google's AdWords program. It was alleged that Multiutility activated the AdWords application with the keyword 'Key21'. Therefore, when a client used the AdWords program, a sponsored link to Multiutility's website automatically appeared on the left-hand side the screen.

On August 7 2007 Key21 sought an injunction preventing Multiutility from using the keyword 'Key21' for the promotion and/or sale of products or services, and for the creation or support of links to Multiutility's activities and website.

Key21 alleged that:

• the sponsored links to Multiutility's website were likely to create confusion between the products and activities of the two companies;
  
  
• Multiutility's use of the sponsored links exploited Key21's good reputation; and
  
  
• Multiutility had increased its advertising opportunities in breach of Article 2598(3) of the Civil Code.

Key21 also requested that the decision be published.

The Milan Court found that use of the keyword 'Key21' did not constitute trademark infringement. According to the court, use of this keyword could not be regarded as 'distinctive use' under the principles set forth by Article 20 of the Intellectual Property Code. However, the court observed that the display of sponsored links could be seen as a misappropriation of a competitor's good reputation, which is punishable as an unfair trade practice under Article 2598 of the Civil Code.

Therefore, the court granted an injunction preventing Multiutility from using the keyword 'Key 21' in conjunction with Google's AdWords program, and Multiutility was ordered to pay all legal costs. However, the court held that the proceedings between Key21 and Google Italy Srl (in its capacity as internet provider) had lapsed.

Margherita Bariè and Pietro Pouchè, Carnelutti Studio Legale Associato, Milan