Is Using a Trademark as a Keyword for AdWord Marketing Legal?

The OLG Braunschweig (re 2 U 24/07 – Bananabay Decision) had to decide on July 12, 2007 if using a (registered) trademark, without owning it, as a keyword for AdWord marketing is legal or not.

The plaintiff owned the trademarked word “bananabay” and ran a sex shop – online under Bananabay.de. The defendant has a similar business and has an online shop under the address "www.exxxx.de/erotikshop". The defendant used as an AdWord for its marketing activities the keyword “bananabay”, i.e. the plaintiffs trademark, in its Google’s AdWord’s promotion. The plaintiff sued with the defendant on grounds of unfair competition and trademark infringement demanding forbearance and damages.

With payment of a fee, Google connected the keyword "bananabay", as given by the defendant, to the defendant’s homepage. So, whenever a user searches with "bananabay", he will find in the “Ads Box” the defendant’s advertisement which leads to his homepage.

The legal problems derive from trademark law and unfair competition law. The questions are whether the AdWord advertisement is use of a third-party trademark and if there is danger of confusion in spite of separate listings in an advertisement block.

The use of a trademark as a keyword within Google’s “Adword Advertisement" demonstrates using a trademark as such because when entering a certain keyword, you are utilizing the search engine to find certain products and therefore utilizing the special guiding function of the trademark. The main concept behind a trademark is to lead potential customers directly to one’s and not one’s competitor’s business.

The defendant argued that the use of a trademark as an AdWord does not constitute the brand’s infringement. The lower courts mixed up the words “metatag”, “keyword”, and “AdWord” as well as the facts connected with these words. This use of a trademark leads only to the normal search results and in a special box on a side margin with the headline “Ads by Google” containing advertisements triggered from a certain keyword or keywords. Practically seen, this situation is comparable to the phenomenon in print media, when two competitors have their ads on the same page under the heading “cars for sale”.

Beyond that, the defendant further argued, there is no danger of confusion because the advertisement is clearly set aside from the normal search results and marked as advertisement. Any person with an average education will recognize that the ads are not identical to the entered keyword. The ads are not considered as hits and therefore connected with the owner of the trademark.

The court held that the plaintiff has a claim pursuant to §14 II no. 1, V MarkenG that the defendant must forbear using the plaintiff’s trademark in advertisement. Such keywording constitutes the use of a trademark in terms of §14 I MarkenG. This section of the law says the branding of a trademark is constituted when it is to set off the product or service from competing services or goods. In other words, if you call your burgers “burgers” nobody will complain. But if call them “McBurgers”, McDonalds Inc. will have a problem with you. The plaintiff is doing exactly just that with its advertisement. It is irrelevant if the search results and the ads appear in two different blocks on the screen. The only difference is in how the results are presented. When vendors use third-party trademarks as keywords for their products, they are using the guidance function of a trademark to lead potential customers to their site. There exists a danger of confusion in the way the defendant employed the string "bananabay" to promote his products. Both parties are in the same business, selling sex articles, therefore the impression can come up that both companies might have contractual,




Published on the old CMS: 2008/2/25
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