Federal Court of Justice on luxury brands in Google AdWord ads

The “General Trademark Complaint” offered by Google is a useful tool for trademark owners to protect their rights. After filing such a Complaint, no one else but the owner can use the protected sign in AdWords ads, unless the owner explicitly consents. Only then Google will “unblock” the use of the trademark in question.

On 12 March 2015 for the very first time the German Federal Court of Justice (BGH) had to decide a case involving such a “Trademark Complaint” (Az. I ZR 188/13). The plaintiff is a company buying and selling, i.a., Rolex brand watches. The defendant manufactures those watches and is the owner of the Community trademark “Rolex”. The plaintiff wanted to advertise its watches using Google AdWords ads, display the word “Rolex” in the ad itself. However, because the defendant had filed a “General Trademark Complaint”, Google did not permit the use of the AdWord “Rolex”. The defendant further refused its consent for the use of such AdWord.

The plaintiff was of the opinion that in view of ss. 8 I, 3 I, 4 (10) of the German Unfair Competition Act (UWG) (“unfair restraint of competitors”) the defendant is obliged to give its consent. In its judgement the BGH now agreed with the plaintiff.

However, the judges pointed out that in general the “Trademark Complaint” as such does not qualify as an unfair restraint of competitors because the Complaint is a ligitimate tool aimed at preventing trademark infringements. Furthermore, competitors have the possibility to ask the trademark owner to give his/her consent to the use of the trademark in ads. 

But, in view of the Court, it does qualify as an unfair restraint of competitors, if the trademark owner refuses to consent although the ads of the competitor would not infringe trademark rights. In the underlying case, the plaintiff did not infringe the defendant’s trademarks because such rights are “exhausted”. Therefore the defendant must give its consent to the use of the sign “Rolex” by the plaintiff in its Google AdWords ads.

In summary, trademark owners may still use the tool of a “Trademark Complaint” to protect their trademark rights. However, if the action of a competitor does not infringe the trademark owner’s rights, the owner is obliged to give its consent to the use of the protected sign in Google Adwords ads. Thus, trademark owners will have to verify whether there is such an infringement for each such request they receive.