The Brussels Court of Appeal ruling of 11 February 2009 in the Polo Ralph Lauren v eBay case in the light of CJ Judgment of 23 March 2010 in joined cases Google v Louis Vuitton

21 June 2010

Laurent Masson

On 23 March 2010, the ECJ delivered its judgment in joined cases Google v Vuitton (cases C-236/08, C-237/08 and C-238/08) regarding questions as to whether Google’s AdWords™ advertising system can involve trade mark infringement. Alongside its search engine service, Google operates its AdWords™ system which allows advertisers to bid on keywords, with the effect that their advertisements (referred to on the site as “Sponsored Links”) are displayed to search engine users who typed a keyword in their search query.

The judgment of the CJ has ruled that an internet referencing provider such as Google which stores, as a keyword, a sign identical with a trade mark and organises the display of advertisements on the basis of that keyword, is not liable for trade mark infringement because it does not “use” the trade marks within the meaning required to constitute infringement.

However, the CJ found that the use of keywords by advertisers may constitute trade mark infringement where the advertisement does not make it clear to the average internet user whether the sponsored link is advertising a genuine product originating from the trade mark owner or from an unrelated party.

In this context, the CJ held that use by an advertiser of a sign identical with a trade mark as a keyword in the context of an internet referencing service may fall within the concept of ‘use in relation to goods or services’.

On this point, it is interesting to note that the Court of Appeal of Brussels came to a similar conclusion, when considering the position of re-sellers or intermediaries such as eBay, in its judgment of 11 February 2009 as to whether eBay infringed The Polo/Lauren Company’s trade mark rights by using the latter’s well-known trade marks “Ralph Lauren” and “Polo Sport” in relation to Google AdWords™ ads, in order to attract consumers to its fashion area, as alleged by the Polo/Lauren Company.

The Polo/Lauren Company claimed that eBay’s use of these trade marks infringed The Polo/Lauren Company’s rights under article 2.20.1.d of the Benelux Convention on Intellectual Property (C.B.P.I.), corresponding to article 5§5 of former directive 89/104 CEE, which prohibits the use of a trade mark, other than for the purpose of distinguishing goods, where such use unduly takes advantage of, or is detrimental to, the distinctive character or reputation of the trade mark.

By a decision of 24 January 2008, the President of the Brussels Commercial Court followed the Polo/Lauren Company’s point of view as it ruled that eBay’s use of The Polo/Lauren Company’s well-known “Ralph Lauren” and “Polo Sport” trade marks unduly took unfair advantage of their reputation and that such use was exclusively for the purpose of advertising eBay’s own online marketplace.

However, the Court of Appeal of Brussels quashed this decision by its judgment of 11 February 2009. The Court of Appeal of Brussels held that, to the extent that it is based on article 2.20.1.d of the C.B.P.I., the claim of Ralph Lauren is not well founded, since eBay did not use the trade mark other than for the purposes of distinguishing the goods or services. Indeed, the Court first noted that the purpose of the use by eBay of the “Ralph Lauren” and “Polo Sport” trade marks is to identify the products which are put on sale on its website and distinguish them from other products on sale on the same website. The Court then stressed that merely because eBay buys as AdWords™ keywords consisting of well-known trade marks (such as “Ralph Lauren” and “Polo Sport”) it cannot be deduced that eBay intends to advertise its own online marketplace by using the advertising function of these trade marks. As products bearing very well known trade marks are put on sale on eBay’s website, the Court accepted that eBay purchases as Adwords™ the keywords corresponding to such trade marks in order to inform the search engine users that they can purchase those products on eBay. The Court concluded that the use by eBay of the “Ralph Lauren” and “Polo Sport” trade marks is made in relation to goods and services, so that it dismissed The Polo/Lauren Company’s action based on article 2.20.1.d of the C.B.P.I.  The decision is final.

The CJ judgment of 23 March 2010 in joined cases Google v Louis Vuitton did not concern use of AdWords™ by resellers or intermediaries (like eBay) which advertise sales of products produced by the trade mark holder. In this respect, we await with interest the judgment to be ruled by the CJ on the request for a preliminary ruling submitted on 17 December 2008 by the Dutch Hoge Raad in the proceeding between the companies Portakabin Limited and Portakabin BV (trade mark holders) against Primakabin BV (reseller of second hand Portakabin products which uses Portakabin as a keyword to trigger its Google AdWords ™ ads).