The Spanish Supreme Court (TS) has recently ruled on the legality of using someone else’s trademark as a keyword to trigger sponsored ads in Google Adwords. The case is Maherlo v Charlet (pdf, in Spanish).
The claimant, Maherlo Ibérica S.L., commercializes elevator shoes for men—shoes with raised insoles that make people look taller. It owns two EU Community Trademarks which bear the words “Masaltos” and “Masaltos.com.” The defendant, Charlet S.A.M., is also in the business of selling elevator shoes, under a different trademark—Bertulli. The defendant selected the trademarked words “Masaltos” and “Masaltos.com.” to trigger ads in Google Adwords. The text of the ads, however, did not include those words. The commercial link in the ads pointed to the defendant’s website, where the plaintiff’s trademarks where not used, either.
Both the first instance court and the court of appeals (pdf, in Spanish) found that such a use was not a trademark infringement. In its ruling, the Supreme Court affirms.
Just like the court of appeals, the Supreme Court follows the case law from the EU Court of Justice (CJEU), particularly the well known cases Google France (2010) and Interflora (2011). In Interflora the CJEU held that
the proprietor of a trade mark is entitled to prevent a competitor from advertising – on the basis of a keyword which is identical with the trade mark and which has been selected in an internet referencing service by the competitor without the proprietor’s consent – goods or services identical with those for which that mark is registered, where that use is liable to have an adverse effect on one of the functions of the trade mark. Such use:
– adversely affects the trade mark’s function of indicating origin where the advertising displayed on the basis of that keyword does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services concerned by the advertisement originate from the proprietor of the trade mark or an undertaking economically linked to that proprietor or, on the contrary, originate from a third party;
– does not adversely affect, in the context of an internet referencing service having the characteristics of the service at issue in the main proceedings, the trade mark’s advertising function; and
– adversely affects the trade mark’s investment function if it substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty.
The assessment of the facts corresponds to national courts. Therefore, the CJEU case law does not prevent the finding by a national court that, in a particular case, the challenged use of the trademark adversely affects a trademark function. In fact, the Inteflora case was finally decided in favor of the plaintiff by the national UK judge, finding that there was a likelihood of confusion.
In Maherlo v Charlet, the Spanish Supreme Court upholds the lower court’s ruling that the use at issue use was not liable to have an adverse effect on any of the functions of the trademark. In particular, the TS upholds the conclusion that there was no risk of confusion or association (and thus no adverse effect to the origin function) because the text of the ad did not include the claimant’s trademarks. The plaintiff had argued that 63 internet users, out of 5,051 who googled the trademarked words, eventually purchased goods from the defendant. According to the claimant, this would indicate that they were misled into thinking that they were buying the goods from the plaintiff. The court of appeals rejected that contention, and noted that the absence of the trademark in the text of the ads clearly showed to the users that the advertiser was in fact a competitor, and thus the origin function was not jeopardized.
While there have been a number of rulings dealing with the use of trademarks as keywords by first instance courts and courts of appeals in Spain, this is the first time the Supreme Court tackles the issue. It must be noted that the same plaintiff has also sued other merchants on these issues, and lower courts have sometimes granted its claims, though on somewhat different factual situations.