In a judgment of January 13, 2011 the German Federal Supreme Court concretized the European Court of Justice’s case-law concerning use of third parties’ trademarks as keywords in Google’s “AdWord” program (e.g. ECJ, judgment of July 12, 2011, case C-324/09 L’Oréal vs. eBay; ECJ, judgment of July 8, 2010, case C-558/08 Portakabin vs. Primakabin; ECJ, judgment of March 25, 2010, case C-278/08 Die BergSpechte Outdoor Reisen vs. trekking.at Reisen; ECJ, judgment of March 23, 2010, case C-236/08 Google vs. Louis Vuitton).

Google’s “AdWord” program

“Google offers a paid referencing service called ‘AdWords’. That service enables any economic operator, by means of the reservation of one or more keywords, to obtain the placing, in the event of a correspondence between one or more of those words and that/those entered as a request in the search engine by an internet user, of an advertising link to its site. That advertising link appears under the heading ‘sponsored links’, which is displayed either on the right-hand side of the screen, to the right of the natural results, or on the upper part of the screen, above the natural results” (ECJ, judgment of March 23, 2010, case C-236/08 Google vs. Louis Vuitton, para. 23).

The Federal Supreme Court’s judgment

According to the European Court of Justice a trademark owner can oppose to a third party’s use of his trademark as a keyword triggering an advertisement for third parties’ products if such use poses a risk to the trademark’s function of indicating origin. In its judgment of January 13, 2011, I ZR 125/07 (“Bananabay II”) the German Federal Supreme Court now found that this trademark function will, generally speaking, not be harmed under the following conditions:

1. the advertisement triggered by the search request is clearly separated from the search result list and appears under a headline like “Anzeigen” (“advertisements”, “sponsored links”), and

2. the text of the advertisement does not contain any reference to the trademark used as keyword, and

3. the hyperlink in the advertisement leading to the advertiser’s internet presence does not show any reference to the trademark used as keyword.

As a consequence, it will be very difficult for a trademark owner to successfully oppose to a third party’s use of his trademark as a keyword in Google’s “AdWord” program if the text of the advertisement (including the hyperlink contained therein) does not show any reference to the trademark.