Legal Alerts / 15 Dec 2014

Legal Alert – Helsinki Court of Appeal Rules on the Use of a Trademark in Domain Names and Google Adwords

Helsinki Court of Appeal rendered a judgment (No. 1204, Final) on 11 June 2014 concerning the use of a trademark in internet advertising. The case concerned the respondent’s use of plaintiff’s trademark on the internet as a domain name, in respondent’s website as well as a keyword in Google AdWords in connection with respondent’s advertisement. The Court found all these actions to infringe plaintiff’s trademark. From the legal point of view, the Court explored two interesting questions in its decision:

Domain Name Use and Time Priority

First, the Court considered whether the use of a domain name infringes a trademark in a situation where the trademark has a later registration date than the domain name.

The Court stated that registering a domain name does not create any positive or negative rights or exclusive right for the domain name to its holder but merely a contractual right to use the domain name as long as the registration is in force. The Court referred to legal literature stating that, for example, a trademark or trade name proprietor may usually intervene in the use of the domain name regardless of the fact that the domain name may have been registered before the term of the trademark has begun.

The Court concluded that the domain name’s registration date was not of great significance in the matter. It was sufficient that the trademark was in force at the time of the claimed infringement, i.e. the trademark proprietor could prohibit the use of an infringing domain name as long as the other conditions under the Finnish Trademarks Act were met. However, the Court concluded that since domain names are global by nature and may not be limited to a certain product class, the use of a domain name may also be prohibited in its entirety.

Domain Name as a Keyword in Google AdWords Advertising

Another interesting legal aspect highlighted in this judgment concerns Google AdWords search engine advertising. It was undisputed in the case that the respondent had used a keyword that was identical to plaintiff’s trademark and that the respondent’s products were similar to those protected by the trademark. Therefore, the Court considered whether this kind of activity was to be considered as an infringement.

The Court referred to two preliminary rulings issued by the Court of Justice of the European Union (“ECJ”), namely joined cases C-236/08-238/08 Google France and Google, Inc. v Louis Vuitton Malletier, Viaticum SA, Luteciel SARL, Centre national de recherche en relations humaines (CNRRH) SARL, Pierre-Alexis Thonet, Bruno Raboin and Tiger SARL and Case C-323/09 Interflora Inc. and Interflora British Unit v Marks & Spencer plc and Flowers Direct Online Ltd.

Based on the ECJ rulings, the Court established that under these circumstances using the trademark as a keyword is considered as trade use and relating to the products even if the trademark does not appear in the advertisement. Furthermore, the ECJ provided that the trademark proprietor may invoke its exclusive right only if one of trademark’s functions is infringed, such as in this case the function of indicating the origin of the goods to consumers.

The Court further applied the main rule established in ECJ case law and referred to in Section 44 of the Case C-323/09 which states as follows:

“The question whether a trade mark’s function of indicating origin is adversely affected when internet users are shown, on the basis of a keyword identical with the mark, a third party’s advertisement, such as that of a competitor of the trade mark proprietor, depends in particular on the manner in which that advertisement is presented. That function is adversely affected if the advertisement does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the advertisement originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party (Google France and Google, paragraphs 83 and 84, and Portakabin, paragraph 34).”

In this case the Court confirmed the trademark infringement in the context of AdWords. The Court considered it difficult to distinguish from the defendant’s advertisement whether there is a connection between defendant’s online store and plaintiff’s trademark. Moreover, the fact that the products were identical and the defendant had earlier also sold the trademark protected products was of great significance in the matter.

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