Trade marks and advertising keywords

The purchase of advertising keywords is the practice whereby an advertiser selects, in a paid referencing service, a term corresponding to a third party’s trade mark, so that its advertisement is displayed when an internet user enters that term in a search engine. The Court of Justice of the European Union has laid down the legal regime of this practice under Article 9 of Regulation (EU) 2017/1001 and Article 10 of Directive (EU) 2015/2436, which Article L. 713-2 of the French Intellectual Property Code transposes.

Use by the advertiser

The Court of Justice of the European Union holds that an advertiser who selects as a keyword a sign identical to a competitor’s trade mark uses that sign in the course of trade, in relation to goods or services, even if the sign does not appear in the advertisement. That use is, however, an infringement only if it adversely affects one of the functions of the trade mark. The origin function is adversely affected where the advertisement does not enable, or enables only with difficulty, a reasonably well informed and reasonably observant internet user to ascertain whether the goods originate from the trade mark proprietor, from an economically linked undertaking or from a third party. An advertisement that is vague as to origin, or that suggests a connection with the proprietor, infringes. An advertisement that clearly offers an alternative, without imitating the trade mark or creating confusion, does not.

The position of the referencing service provider

The provider that stores the keywords and displays the advertisements does not itself use the sign in the course of trade, since it merely enables its customers to do so. It cannot be held liable for trade mark infringement, but only, where appropriate, under the regime of hosting provider liability, where it has played an active role giving it knowledge of or control over the data, or where it has failed to remove unlawful advertisements expeditiously after becoming aware of them.

Trade marks with a reputation and other legal bases

For a trade mark with a reputation, selection as a keyword may amount to taking unfair advantage of the reputation where the advertiser offers imitations, or to dilution where it contributes to turning the sign into a generic term. By contrast, advertising that offers an alternative to the proprietor’s goods, without imitation or harm to the reputation, is fair competition. Where use of the trade mark is not established, unfair competition and free riding remain available, in particular where the text of the advertisement or the landing page creates confusion or diverts customers by unfair means.

Key points

Reserving a competitor’s trade mark as a keyword is not prohibited in itself, but the resulting advertisement must enable the internet user to identify the origin of the goods without difficulty. An ambiguous advertisement, or one suggesting a connection with the proprietor, infringes, whereas an advertisement that clearly presents an alternative does not. The text of each advertisement and the landing page, and not only the keyword, should be examined before taking action or launching a campaign.

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This glossary entry is general in scope and does not constitute legal advice.

Dhenne Avocats is a patent litigation firm. Matters outside that field, such as trade marks, designs, copyright and IT contracts, are handled by practitioners the firm works with regularly, and by the firm itself when they arise in a patent dispute.

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