The European Court of Justice decides on “Keyword Advertising”

In a decision the European Court of Justice decided on using third parties’ trademarks in an internet search engine (“Keyword Advertising”) under the aspect of trademark infringement. The Court sees an infringement if that use of the keyword is liable to have an adverse effect on one of the functions of the trademark, such as indicating the origin, the trademark’s advertising function and the trademark’s “investment” function. Moreover, in the case of a trademark with a reputation, it has to be considered whether the competitor takes unfair advantage of the distinctive character or repute of the trademark (free-riding) or whether the advertising is detrimental to that distinctive character (dilution) or the repute (tarnishment). If these specific adverse effects are not present, keyword advertising is allowed to show an alternative to the goods or services of the proprietor of that mark.