OGH: Dynamic Search Ads Are Trademark Violations

Feb 10, 2023 Benn-Ibler Rechtsanwälte GmbH

An advertisement created by a third party that uses a specific trademark as a keyword does not violate the rights of the trademark’s owner only if and when viewed as a whole, it is reasonably simple for an averagely informed and reasonably observant internet user to conclude from such an advertisement that the goods or services thus advertised are neither from the trademark owner nor from a business commercially affiliated with the trademark owner.

The plaintiff runs an unregistered sole proprietorship and is the trademark owner of AIRBUTLER, under which he sells air purifiers. The defendant sells air purifiers as well. During a Google search by the plaintiff, four entries marked ‘advertisement’ appeared, referring to the trademark. The defendant was using dynamic Google search ads. A manual exclusion of the trade mark as a search term would have been possible ‘but not realistically implementable’, according to the defendant. The plaintiff thus sought appropriate compensation under Section 53(1) and (3) of the Austrian Trademark Protection Act (Markenschutzgesetz, hereinafter MSchG), as well as an injunction against use of the trademark.

The court of first instance dismissed the claim. However, the court of appeal as well as the Austrian Supreme Court (Oberster Gerichtshof) ruled in favour of the plaintiff, stating:

Pursuant to Section 51 MSchG, the infringed party has a claim to appropriate compensation, which does not require any fault on the part of the violator. Under trademark law, owners are also liable for the risk associated with the beneficial use by ancillary persons. It depends on whether the business owner has the legal ability to prevent or stop violations on the basis of his or her relationship with the violator. Even if the defendant argues that the linking of their advertisement with the plaintiff's trademark had happened without their intervention, meaning without specifically defining a keyword relating to the trademark, they still made use of the dynamic search ad where Google algorithms inexplicably accessed the defendant's content and placed an advertisement. With reference to case law and legal doctrine on third-party liability for trademark infringement, the Austrian Supreme Court did not see any reason why there should be no liability in this case.

OGH 4 Ob 134/22t (22.11.2022)