Buying Your Competitors’ Trademarks - A Comparative Look at Treatment of Keyword Advertising under EU and U.S. Trademark Law

Abstract

The Internet poses new challenges to the legal world. One of those challenges is the sale of someone else’s trademark as a keyword in different referencing service programs on the Internet. This issue has, in the recent years become an important topic and a much-litigated issue. The referencing service providers earn big profits on their referencing service programs and the biggest provider for a referencing service on the market today is Google and its AdWords program.

When an Internet user searches for a product or a service on the Google search engine, the results that best correspond to the keywords the Internet user has typed into Google, and the "sponsored links" are both shown to the user. To have one’s website shown under the "sponsored links" section, an advertiser can buy keywords to trigger the display of their advertisement when an Internet user does a search on the Google search engine based on the purchased keywords. The controversy of keyword-triggered advertisements arises when the referencing service allows advertisers to select protected trademarks as keywords and as a result trigger the display of advertisements that link to third-party websites not associated with the trademark owners.

Within the European Union, the Trademark Directive and the Community Trademark Regulation govern the European Union trademark law. Article 5 of the Trademark Directive and Article 9 of the Community Trademark Regulation sets out circumstances where a trademark owner has the right to prohibit a third party’s use of the trademark owner’s trademark. Many Member States’ national courts have struggled with the question of whether or not an unauthorized use of someone else’s trademark as a keyword in an advertisement on the Internet constitutes trademark infringement. Given that the Member States’ courts have reached different conclusions on the issue, national courts have referred questions to the Court of Justice of the European Union for the Court to interpret the Trademark Directive and the Community Trademark Regulation. The Court of Justice of the European Union began to rule on the issue in 2010, when it reached decisions in three different cases it was faced with. These three judgements mark the formulation of the Community case law regarding keyword-triggered advertising within the EU, and the Court is expected to hand out more verdicts in the near future.

In the United States, the Lanham Act governs trademark law. Section 32 of the Act provides the basis for infringement of a federally registered trademark, while section 43 of the Act provides the basis for common law trademarks. For trademark infringement to be found, the trademark has to be valid, the accused infringer must have used the trademark in commerce without the permission from the trademark owner and the unauthorized use has to be likely to cause confusion concerning the source or origin of the goods or service. The U.S. case law on keyword-triggered advertising has mostly focused on the requirements “use in commerce” and “likelihood of confusion”.

• author: Hammarbro, Johanna
• supervisor: Ulf Maunsbach
• organization: Department of Law
• alternative title: Köp av konkurrenters varumärken - en komparativ studie hur sökordsbaserad annonsering behandlas inom EU och USA
• course: JURM01 20111
• year: 2011
• type: H3 - Professional qualifications (4 Years - )
• subject: Law and Political Science
• keywords: Intellectual property, trademark law
• language: English
• id: 1969737
• date added to LUP: 2011-05-26 11:30:52
• date last changed: 2011-05-26 11:30:52