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The Use of Trade Marks in Keyword Advertising

van der Laan, N.

2020

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van der Laan, N. (2020). The Use of Trade Marks in Keyword Advertising.

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III

2.3.1.4 Counterarguments 22 2.3.2 Incentive 25 2.3.2.1 Counterarguments 25 2.3.3 Natural Law/Reward 26 2.3.3.1 Counterarguments 27 2.3.4 Commercial Morality 28 2.3.4.1 Counterarguments 29 2.3.5 Sumptuary Code 30 2.3.5.1 Counterarguments 32 2.3.6 Expressive Autonomy 32 2.3.6.1 Counterarguments 33 2.4 Property Theory 33

2.5 Trade Mark Functions 36

2.5.1 Origin Function 38 2.5.2 Advertising Function 39 2.5.2.1 Informative Advertising 40 2.5.2.2 Persuasive Advertising 40 2.5.3 Investment Function 42 2.5.4 Quality Function 43 2.5.5 Communication Function 44

2.5.6 Other Trade Mark Functions 45

2.6 Further Considerations 45

2.6.1 Fundamental Rights 46

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V

2.6.1.2 Trade Marks and Fundamental Rights 48

2.6.1.3 Freedom of Expression 50

2.6.1.4 Right to Property 52

2.6.1.5 Freedom to Conduct a Business 53

2.6.1.6 Consumer Protection 54

2.6.2 Competition 55

2.6.2.1 EU Policy and Law 56

2.6.2.2 Economic Models 57

2.6.2.3 Trade Marks and Competition 58

2.6.2.4 Keyword Advertising and Competition 59

2.6.3 Unfair Competition 61

2.6.4 Internal Market 62

2.6.5 E-Commerce 62

2.7 Conclusion 63

2.7.1 The Notion of Goodwill 63

2.7.2 Rationales 63

2.7.3 Property Theory 65

2.7.4 Trade Mark Functions 65

2.7.5 Further Considerations 66

2.7.6 Application with Regard to Keyword Advertising 67

3 Trade Mark Use and Functions 69

3.1 Introduction 69

3.2 Relevance 70

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VI

3.3.1 Meaning of the Term “Use” 71

3.3.2 Art 10(2) TMD: Use in Relation to Goods or Services 72

3.3.2.1 Art 10(2)(a) TMD: Double Identity 73

3.3.2.1.1 Absolute Protection 73

3.3.2.1.2 Trade mark Functions 75

3.3.2.2 Art 10(2)(b) TMD: Likelihood of Confusion 76 3.3.2.3 Art 10(2)(c) TMD: Trade Marks with a Reputation 76

3.3.3 Art 10(3) TMD: Prohibited Uses 76

3.3.4 Art 10(6) TMD: Other Use 76

3.4 CJEU Jurisprudence Before Keyword Advertising 78

3.4.1 BMW v. Deenik 78

3.4.2 Hölterhoff v. Freiesleben 79

3.4.3 Arsenal v. Reed 79

3.4.4 Robelco v. Robeco 81

3.4.5 Anheuser-Busch v. Budĕjovický Budvar 81

3.4.6 Adam Opel v. Autec 82

3.4.7 Céline SARL v. Céline SA 84

3.4.8 O2 v. Hutchison 85

3.4.9 UDV v. Brandtraders 86

3.4.10 L’Oréal v. Bellure 87

3.4.11 Analysis of CJEU Jurisprudence Before Keyword Advertising 88

3.4.11.1 Distinguishing Goods or Services 89

3.4.11.2 Effect on Trade Mark Functions 92

3.4.11.3 Use Listed in Art 10(3) TMD 93

3.5 CJEU Jurisprudence Since Keyword Advertising 93

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VII 3.5.2 Bergspechte v. trekking.at 97 3.5.3 Eis.de v. BBY 98 3.5.4 Portakabin v. Primakabin 98 3.5.5 L’Oréal v. eBay 99 3.5.6 Interflora v. M&S 99

3.5.7 Analysis of CJEU Jurisprudence Since Keyword Advertising 101

3.5.7.1 Use in the Course of Trade 102

3.5.7.2 Use in Own Commercial Communication 102 3.5.7.3 Use in Relation to Goods or Services 103 3.5.7.4 Adverse Effect on Trade Mark Functions 104

3.5.7.5 Adverse Effect on Origin Function 105

3.5.7.6 Adverse Effect on Advertising Function 107 3.5.7.7 Adverse Effect on the Investment Function 108

3.5.7.8 Rejection of Functional Approach 109

3.6 Ideas for Improvement 111

3.6.1 Introduce Additional Limitations 111

3.6.2 Distinguish between Source-Identifying and Other Use 114 3.6.3 Restrict Art 10(2)(a) TMD to Source-Identifying Use 116

3.6.4 Preliminary Conclusion 118

3.7 National Debates 118

3.7.1 Trade Mark Use in the Netherlands 119

3.7.1.1 Dutch Jurisprudence 119

3.7.1.1.1 Farmdate v. Google Netherlands (Vzr. Rb. Amsterdam 2006) 119 3.7.1.1.2 Portakabin v. Primakabin (HR 2008) 120

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VIII

3.7.2 Trade Mark Use in Germany 122

3.7.2.1 German Jurisprudence 122 3.7.2.1.1 No Use as a Mark 123 3.7.2.1.2 Use as a Mark 124 3.7.2.1.3 Bananabay (BGH 2009) 125 3.7.2.1.4 Beta Layout (BGH 2009) 126 3.7.2.1.5 pcb (BGH 2009) 127

3.7.2.1.6 Liability of the Search Engine 127

3.7.2.2 German Literature 127

3.7.3 Trade Mark Use in the UK 129

3.7.3.1 Reed Executive v. Reed Business Information (CA 2004) 130 3.7.3.2 Wilson (Mr. Spicy) v. Yahoo! (HC 2008) 131

3.7.3.3 L’Oréal v. eBay (HC 2009) 131

3.7.3.4 Interflora v. M&S (HC 2009) 132

3.7.4 Trade Mark Use in France 133

3.7.4.1 Google v. Louis Vuitton (Cass. 2008) 133

3.7.5 Trade Mark Use in Austria 134

3.7.5.1 Glucochondrin (OGH 2005) 134

3.7.5.2 Wein & Co (OGH 2007) 134

3.7.5.3 Bergspechte (OGH 2008) 135

3.7.6 Trade Mark Use in the US 136

3.7.6.1 US Jurisprudence 137

3.7.6.1.1 Other Forms of Online Advertising 137 3.7.6.1.2 Rescuecom Corp. v. Google Inc. (Second Circuit 2009) 138 3.7.6.1.3 Network Automation Inc. v. Advanced Systems Concepts Inc. (Ninth Circuit 2011)

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IX 3.7.6.1.4 Rosetta Stone Ltd. v. Google Inc. (Fourth Circuit 2012) 140 3.7.6.1.5 1-800 Contacts Inc. v. Lens.com Inc. (Tenth Circuit 2013) 140

3.7.6.2 US Literature 140

3.7.6.3 State Legislation 146

3.8 Conclusion 147

3.8.1 Relevance 147

3.8.2 Indications in the Trade Mark Directive 147 3.8.3 CJEU Jurisprudence Before Keyword Advertising 148 3.8.4 CJEU Jurisprudence Since Keyword Advertising 149

3.8.5 Ideas for Improvement 151

3.8.6 National Debates 152

4 Consumer Confusion 154

4.1 Introduction 154

4.2 Global Assessment 154

4.2.1 Recognition on the Market 156

4.2.2 Likelihood of Association 158

4.2.3 Degree of Similarity of Signs and Products 160

4.3 Relevant Consumer 162

4.3.1 Empirical Research 162

4.3.1.1 Search Objectives 163

4.3.1.2 Search Expectations 164

4.3.1.3 Focus on Ad Text 164

4.3.1.4 Ability to Distinguish between Ads and Algorithmic Search Results 165

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4.3.2 Normative Standard 166

4.3.3 Relevance of Product Category 169

4.4 Transparency Requirement 169

4.4.1 An Adequate Compromise 170

4.4.2 Ad Text 171

4.4.3 Labelling and Graphical Separation of Ads 173

4.5 Pre Sale Confusion and Initial Interest 173

4.5.1 US Origin 174

4.5.2 Differentiate Between Pre Sale Confusion and Initial Interest 175

4.6 National Jurisprudence 177

4.6.1 Netherlands 177

4.6.1.1 Tempur v. Medicomfort (Hof Den Haag 2011) 177 4.6.1.2 SEB v. Philips (Rb. Den Haag 2013) 178 4.6.1.3 Otto Ooms v. Practicomfort (Rb. Den Haag 2013) 179 4.6.1.4 Serbo Serres v. Luxlight (Rb. Overijssel 2015) 180 4.6.1.5 Noosa v. Desir (Rb. Den Haag 2016) 180 4.6.1.6 Fleurop v. Topbloemen (Rb. Den Haag 2016) 181

4.6.2 Germany 182

4.6.2.1 Erotikartikel (OLG Frankfurt a.M. 2010) 182

4.6.2.2 Bananabay II (BGH 2011) 183

4.6.2.3 Impuls (BGH 2011) 184

4.6.2.4 B. v. E. Shop (OLG Düsseldorf 2011) 185

4.6.2.5 Most-Pralinen (BGH 2012) 185

4.6.2.6 Beate Uhse (BGH 2013) 187

4.6.2.7 Fleurop (BGH 2013) 187

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XI

4.6.2.9 Schlafwelt (OLG Hamburg 2015) 190

4.6.3 UK 191

4.6.3.1 Lush v. Amazon (HC 2014) 191

4.6.3.2 Interflora v. M&S (CA 2014) 192

4.6.4 France 194

4.6.4.1 Google v. CNRRH (Cass. 2010) 194

4.6.4.2 Google v. Auto IES (Cass. 2012) 195

4.6.5 Austria 196

4.6.5.1 Bergspechte (OGH 2010) 196

4.6.5.2 Wintersteiger (OGH 2010) 197

4.6.6 Special Circumstances 198

4.7 Likelihood of Confusion in the US 200

4.7.1 Brookfield Communications Inc. v. West Coast Entertainment Corp. (Ninth Circuit 1999) 201 4.7.2 Playboy Enterprises Inc. v. Netscape Communications Corp. (Ninth Circuit 2004) 202 4.7.3 Network Automation Inc. v. Advanced Systems Concepts Inc. (Ninth Circuit 2011) 205 4.7.4 Rosetta Stone Ltd. v. Google Inc. (Fourth Circuit 2012) 208 4.7.5 1-800 Contacts Inc. v. Lens.com Inc. (Tenth Circuit 2013) 209

4.8 Conclusion 209

4.8.1 Global Assessment 210

4.8.2 Relevant Consumer 210

4.8.3 Transparency Requirement 211

4.8.4 Pre Sale Confusion and Initial Interest 211

4.8.5 National Jurisprudence 212

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XII

5 Goodwill Protection 215

5.2 Reputation 216

5.3 Connection or Link in Mind of Public 217

5.4 Detriment to Distinctive Character 218

5.5 Detriment to Repute 221

5.6 Unfair Advantage of Distinctive Character or Repute 222

5.6.1 Google v. Louis Vuitton 223

5.6.2 Interflora v. M&S 224

5.6.3.1 Tempur v. Medicomfort (Hof Den Haag 2011) and SEB v. Philips (Rb. Den Haag 2013) 226

5.6.3.2 Beate Uhse (BGH 2013) and Beate Uhse II (OLG Frankfurt a.M. 2014) 226

5.7 Due Cause 227

5.7.1 Balance of Interests 227

5.7.2 Statutory Limitations 228

5.7.3 Broad Interpretation of Due Cause 229

5.8 Adverse Effect on the Trade Mark Functions 230

5.8.1 Advertising Function 230

5.8.2 Adverse Effect on Investment Function 231

5.8.3 Adverse Effect on Communication Function 232

5.11 Conclusion 232

6 Limitations 235

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XIII 6.2.1 Art 14 TMD: Limitation of the Efffects of a Trade Mark 236

6.2.1.1 Art 14(1)(a) TMD: Use of Name or Address 236 6.2.1.2 Art 14(1)(b) TMD: Descriptive and Non-Distinctive Use 236

6.2.1.3 Art 14(1)(c) TMD: Referential Use 237

6.2.1.3.1 Comparative Advertising: Within the Scope of Art 14(1)(c) TMD? 238 6.2.1.3.2 Keyword Advertising: Within the Scope of Art 14(1)(c) TMD? 239

6.2.2 Art 15 TMD: Exhaustion 240

6.2.3 Art 10(2)(c) TMD: Due Cause 241

6.3 Portakabin v. Primakabin 241

6.3.1 The CJEU’s Interpretation of the Statutory Limitations 242 6.3.2 The CJEU’s Interpretation of the Exhaustion Rule 243 6.3.3 Evaluation of Portakabin v. Primakabin 244

6.4 Fair Use in the US 246

6.4.1 Classic/Descriptive Fair Use 246

6.4.2 Nominative Fair Use 247

6.5 Conclusion 249

7 Unfair Competition Law 252

7.2 Misleading Advertising 254

7.3 Comparative Advertising 257

7.3.1 Definition Art 2(c) MCAD: Does It Cover Keyword Advertising? 258

7.3.2 Conditions Art 4 MCAD 260

7.3.2.1 Art 4(h) MCAD: Confusion 261

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XIV

7.3.2.3 Art 4(g) MCAD: Imitation 263

7.3.2.4 Art 4(d) MCAD: Discredit or Denigration 263

7.3.2.5 Remaining Conditions 264

7.3.3.1 Google v. Cobrason (Trib. Comm. Paris 2008) 265 7.3.3.2 Tempur v. Energy+ (Rb. Den Haag 2010) 265 7.3.3.3 Tempur v. Medicomfort (Hof Den Haag 2011) 267 7.3.3.4 Fleurop v. Topbloemen (Rb. Den Haag 2016) 268

7.4 National Unfair Competition Law 268

7.4.1 Bananabay II (BGH 2011) 269

7.4.2 Uhrenankauf im Internet - Rolex (BGH 2015) 270 7.4.3 Fleurop v. Topbloemen (Rb. Den Haag 2016) 271

7.5 Conclusion 271

8 Liability of the Search Engine 273

8.2 Primary Liability Under Trade Mark Law 273

8.2.1 Meaning of Use 274

8.2.2 Infringement Depends on Advertiser 274

8.2.3 Separation of Ads 276

8.2.4 Consequences of Primary Liability Under Trade Mark Law 277

8.2.5 Own Commercial Communication 278

8.2.6 Borderline Cases 279

8.2.7 Search Engine Not Primarily Liable Under Trade Mark Law 279

8.3 Secondary Liability 280

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XV 8.3.1.1 Google v. Louis Vuitton (CJEU 2010) 281 8.3.1.2 Hosting Exemption Applies to Search Engine 282

8.3.1.3 Borderline Cases 283

8.3.2 Level of Knowledge 284

8.3.3 Injunction 286

8.3.4 Keyword Matching, Suggestion and Insertion 288

8.3.4.1 Keyword Matching 288

8.3.4.2 Keyword Suggestion 289

8.3.4.3 Keyword Insertion 289

8.3.4.4 Consequences for Hosting Exemption 289

8.3.5.1 Google v. Louis Vuitton (Cass. 2010) 291

8.3.5.2 Google v. GIFAM (Cass. 2010) 292

8.3.5.3 Google v. SFL (CA Paris 2010) 292

8.3.5.4 Google v. Cobrason (Cass. 2013) 293

8.3.5.5 Google v. Voyageurs Du Monde (CA Paris 2014) 293

8.4 Separation of Ads 294

8.5 Search Engine Liability in the US 296

8.5.1 Primary Liability 296

8.5.2 Secondary Liability 297

8.5.2.1 Inwood Laboratories Inc. v. Ives Laboratories Inc. (Supreme Court 1982) 297 8.5.2.2 Lockheed Martin Corp. v. Network Solutions Inc. (Ninth Circuit 1999) 298 8.5.2.3 Tiffany (NJ) Inc. v. eBay Inc. (Second Circuit 2010) 298 8.5.2.4 Rosetta Stone Ltd. v. Google Inc. (Fourth Circuit 2012) 300

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XVI

8.6.1 Primary Liability 301

8.6.2 Secondary Liability 302

8.6.3 Separation of Ads 303

8.6.4 Search Engine Liability in the US 303

9 Conclusion 304 10 Outlook 308 Bibliography 310 Literature 310 Legislation 331 Jurisprudence 335

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