The Juzgado de lo Mercantil de Madrid núm. 9 (sitting as Court specialised in commercial matters including intellectual property rights) has ruled on 22 December 2011 that use of an identical or confusingly similar mark as a keyword in a search engine (“keyword advertising”) may infringe third party trade mark rights.
The ruling, generally concerning trade marks and the internet, bases its reasoning on the doctrine contained in the judgments of the ECJ of 23 March 2010 (Joined Cases C-236/08 to C-238/08 Case Google France SARL y Google Inc. vs. Louis Vuitton Malletier SA; Google France SARL vs. Viaticum SA y Luteciel SARL; Google France SARL vs. Centre national de recherche en relations humaines (CNRRH) SARL and others) and 12 July 2011 (Case C-324/09 L’Oreal SA, Lancome and others vs. eBay International AG and others).
The facts are as follows: Maherlo Ibérica S.L. owns a number of Spanish trade marks comprising or containing the word MASALTOS and MASALTOS.COM (fig.) registered in connection with shoes with a raised insole. Calzados Fernando García S.L. is a competitor in the shoe business which, for the purposes of advertising its own products, used MASALTO and MAS ALTOS as reference words in a search engine. Additionally, Calzados Fernando García S.L. used the word MASALTO in the URL of its website www.hiplus.com/masaltos and in the website itself.
Maherlo Ibérica S.L. instituted trade mark infringement actions requesting cessation and prohibition of the unauthorised use of the above trade marks by Calzados Fernando García S.L. as well as damages derived from such use, pursuant to Spanish Trade mark Act 17/2001. Calzados Fernando García S.L. filed a counter-action seeking nullity of the Maherlo Ibérica S.L. trade marks on the ground of descriptiveness in connection with shoes with a raised insole. Although MASALTO is not a word as such, it is comprised by two separate words, the superlative “MAS” and the adjective “ALTO”, meaning literally “higher”.
The Court first addressed the nullity counterclaim concluding that, while the separate words MAS ALTO formed a descriptive expression in connection with shoes with a raised insole, the juxtaposed words coined a distinctive term with a minimum distinctiveness, helped by a characteristic figurative design and, in the case of MASALTOS.COM, with the added element “.com”. Therefore it could be successfully argued that exclusive trade mark rights marks could derive from the expressions MASALTO and MASALTO.COM.
The Court then considered the issue of whether the use of the words MASALTO and MASALTO.COM by a competitor as a reference words in a search engine to advertise its own products, which compete with the goods protected by identical trade marks, could amount to a use of a mark in the course of trade and, if so, if this use could affect an essential function of the trade marks concerned, including its advertising function.
The Court considered that there is use of such marks in the course of trade inasmuch as Calzados Fernando García S.L. is using them in order to distinguish the shoes it is promoting on its website. According to the Judge, Calzados Fernando García S.L. cannot be exempted on the basis of a fair use of the descriptive expression MAS ALTOS if it is also using such words together as a fanciful expression (“MASALTOS”) and with “.com”, as keywords to advertise its own goods. The Court further held that the restriction of the number of characters available to compose the ad does not justify the juxtaposition of such words into a single term.
Further, the Judge considered that the defendant, by using the mark MASALTOS in the URL linked to its website, such www.hiplus.com/masaltos, and in some of the statements of its website, such as “Hiplus- Men MASALTOS. Shoes with raised insole to be MASALTOS”, is a trade mark use calculated, together with the using thereof as keywords in a search engine, to lead to confusion in the relevant consumer. The function of the MASALTOS trade mark as indication of source of origin and its advertising function are impaired by such use.
Nevertheless, the claimant could not prevent Calzados Fernando García S.L. from using the expression MAS ALTO (separated words) in order to describe its own raised insole shoes. Indeed, Calzados Fernando García S.L. continues to use such expression (“MAS ALTO”) as keywords to target consumers interested in that kind of goods.
The Court awarded damages to Maherlo Ibérica S.L. consisting of 1% of the defendant’s turnover derived from trade mark infringement up to 6,059.25 pursuant to Article 43 Spanish Trade mark Act 17/2001. By this provision, the successful claimant is entitled automatically to damages up to 1% of the infringer’s turnover without the need to prove damages.
The decision is still confusing: does the Judge consider that use the use of keywords identical to a third party trade mark amounts per se to a trade mark infringement or that this can only be asserted in this case because of the combination with clear infringing uses (e.g. the misleading mention of the trade marks on the defendant's website, etc.)? Previous judgments of the CJEU - e.g. Case C‑558/08 Portakabin Ltd and Portakabin BV v Primakabin BV of 8 July 2010; Case C-323/09 Interflora Inc and Interflora British Unit v Marks & Spencer plc and Flowers Direct Online Limited of 22 December 2011 and the German Bundesgerichtshof's decision of January 2011 after the CJEU's decision in Eis.de GmbH v BBY Vertriebsgesellschaft mbH known as the Bananabay case (case reference: I ZR 125/07) - have made clear that use of a third party trade mark as a reference word may be non-infringing in many circumstances. The discussed judgment should be correctly read in the light of such CJEU rulings: an interpretation of this judgment leading otherwise to the conclusion that the mere use of a trade marked term in a keyword can lead to a trade mark infringement would run counter to the CJEU doctrine and recent subsequent EU Member States' case law applying such doctrine.