Permissibility of AdWord Advertisement by Google

May you or may you not advertise with Google AdWords? On January 22, 2009 BGH decided in three cases on the trademark legality when using other persons trademarks as keywords in Google's AdWords. Two cases were decided against trademark owner and in the third case, the decision was submitted to the European Court of Justice to rule on.

So far, case law had been decided differently when a third person used a trademark or a similar symbol as an ad in order to be found in the "sponsored links". In the relevant cases, the ad contained neither the trademark or any other reference to the trademark when promoting the advertiser's sales or services.

In the first case (I ZR 125/07), the defending vendor of sex toys used "bananabay" as keywords. However, a competitor also selling erotic articles in the Internet sued him. The question in this case is: When will using keywords that are identical with trademarks constitute an infringement of a trademark (§14 MarkenG).  Since this law bases on harmonized European Law, the Federal Court of Justice suspended the case and submitted it to the European Court of Justice to obtain a preliminary ruling pursuant to art. 234 EU-Treaty.

In the second case - I ZR 139/07, two companies were competing in selling circuit boards. The plaintiff registered the trademark "PCB-POOL". The defendant used as a keyword "pcb" - in relevant circle of experts this acronym was understood as "printed circuit board". When searching for "pcb" as an AdWord the defendant was found in the ad section among the search results. The BGH dismissed this case because the trademark owner can usually not forbid the use of a describing term such as "pcb" even when it could confused with a trademark. The court held this use as not infringing. Therefore, it was not necessary to submit to the European Court of Justice.

The plaintiff of the second was also complaining in the third reported case (I ZR 30/07). The plaintiff has the company alias "Beta Layout GmbH". The defendant used as a keyword in Google AdWords the description "beta layout". And again here, the competing defendant was found in the ad section when searching for "Beta Layout". The Federal Court of Justice denied the plaintiff any rights, just as the lower court did, because there is no confusion that could lead to a right of forbearance. The Internet user would not assume that the advertisement in the ad section would relate to Beta Layout GmbH.