The use of third-party trademarks in Google Ads

Introduction

In my recent work for a client, I was again confronted with a recurring theme: The use of third-party trademarks in Google Ads. While the warning I had to issue in this context was not particularly challenging for me, it did motivate me to take a closer look at this issue. Many advertisers are unaware of the legal pitfalls that come with using brand names in Google Ads. This blog post is therefore intended to help bring clarity to this complex topic and to point out important rulings and decisions.

Keyword Advertising Basics

Google Ads, also known as Keyword Advertising or AdWords, is a powerful tool in online marketing. But using brand names as keywords can lead to legal conflicts. The question that arises here is: When is the use of third-party trademarks in Google Ads illegal?

Decisions of the ECJ

The European Court of Justice (ECJ) has brought clarity to this issue in several decisions. In a case against the French offshoot of Google, “CNRRH ./. Google France SARL”, the ECJ found that Google itself does not commit any trademark infringement, as it only creates the technical conditions for customers to book keywords identical to trademarks. In another judgment, “Interflora Inc. v. Marks & Spencer,” the ECJ ruled that the booking of another’s brand name is generally permissible. However, a trademark infringement exists if the average Internet user cannot clearly recognize whether the advertised products originate from the trademark owner or a third party.

Decisions of the BGH:

In recent years, the Federal Court of Justice (BGH) has ruled intensively on the use of third-party trademarks in Google Ads and developed important principles for practice.

In the “Bananabay II” decision, the BGH clarified a central point: The mere booking of another’s trademark as a keyword does not in itself constitute a trademark infringement. This applies in particular if the resulting advertisement does not contain any direct mention of the trademark or references to the trademark owner. This means that advertisers are perfectly capable of booking keywords that are identical to other people’s brands, as long as they make sure that their ads are not directly related to those brands.

The “MOST chocolates” decision of the BGH went one step further and established a two-step test to determine the question of trademark infringement. First, it must be examined whether the average Internet user would assume that the advertiser and the trademark owner are economically connected. If this is not the case, the second step is to check whether it is clear from the advertisement itself that the products or services advertised do not originate from the trademark owner or an affiliated company.

Another landmark ruling is the “BEATE UHSE” decision. Here, the BGH emphasized that well-known trademarks that have a high degree of recognition enjoy extended protection. This means that special care must be taken when using such brands in Google Ads. A trademark infringement may exist in particular if the advertiser offers products that are imitations of the trademark owner’s products or if the trademark is presented in a negative context.

In summary, with these decisions the BGH has created important guidelines for the use of brand names in Google Ads, which advertisers should definitely observe in order to avoid legal risks.

When is the use of third-party trademarks permitted?

The use of third-party brands in Google Ads is a sensitive issue that should be approached with caution. In principle, the use is permitted as long as it does not have the purpose of misleading the consumer or presenting the trademark in a negative light. It is important to emphasize that advertisers should always keep in mind the intent and perception of the average consumer.

A good example of a permissible use is descriptive trademark use. Here, the trademark is not used in its primary function as an indication of origin, but in its secondary, descriptive meaning. Take, for example, the “Tempo” brand of handkerchiefs. If someone uses the term “speed” in an advertisement to refer generally to the speed of a service or product without any reference to handkerchiefs, this may be considered a descriptive use.

However, there is an important restriction here: the descriptive use must not have the effect of misleading the consumer as to the actual origin of the goods or services. If, for example, a competitor of “Tempo” uses the term in a way that creates the impression that its handkerchiefs are a “Tempo” product, this would be misleading and therefore inadmissible.

In addition, advertisers should always be careful not to use the brand in a context that disparages or denigrates it. This could be the case if negative attributes or criticisms are mentioned in direct connection with the brand.

A common example is also is linking to blogposts that compare products or services from different brands. Such comparisons can be used to highlight the advantages and disadvantages of each branded product. As long as it is clear that this is an objective comparison and no attempt is made to present a brand in an unjustified negative light, this may be permissible.

However, it is important to emphasize that this area of trademark law is highly controversial. While descriptive or comparative use may be permissible in some cases, there is always a risk that the trademark owner will claim infringement of its trademark rights. This may be the case, in particular, if the descriptive or comparative use creates the impression that there is an economic link between the advertiser and the trademark owner or if the distinctive character of the trademark is impaired.

Therefore, it is of utmost importance to be extremely careful when using trademarks in a descriptive or comparative context. Without sound legal advice, this can be very tricky and lead to costly legal disputes. Advertisers should therefore always be aware that they are entering uncertain territory when they use trademarks in a descriptive or comparative context without first securing legal protection.

Conclusion

The use of third-party trademarks in Google Ads is a complex legal field that is subject to constant change and interpretation. Advertisers often face the challenge of designing their marketing strategies effectively without running into legal pitfalls. It is therefore essential to keep up to date with the current legal framework and court decisions. In case of doubt, legal advice should always be sought to ensure that the advertising measures are not only effective but also compliant with applicable law. In particular, descriptive trademark use, whether in a comparative context or in direct reference, may be permissible in certain cases. However, it requires a high degree of diligence and understanding of the subtle nuances of trademark law. Advertisers should therefore always act with caution and be aware of the potential risks associated with using third-party brands in advertisements.