Authors: Kristina Vilkiene, Assistant Attorney-at-Law in METIDA, Reda Zaboliene, Managing Partner, Attorney-at-Law, Patent Attorney in METIDA
While the newest market and sociological research assess which of the social media measures is the most effective place to expand the market one thing is clear – all of these measures work in the common space – the Internet. On the Internet specific elements, like domains, keywords or metatags, occur apart from the traditional and classical marketing measures like trademarks. Consequently, a question arises what protection can be applied to these separate objects and how much freedom there is in their selection and usage in advertising?
In a case Belgian Electronic Sorting Technology BV versus Peelaers the Court of Justice of the European Union was analysing a request about a preliminary decision which was asking to provide an explanation of a concept of “advertising” in terms of Directive 84/450/EEC article 2 and Directive 2006/114/EC article 2 (regarding the misleading and comparative advertising).
Belgian Electronic Sorting Technology BV (BEST) and Visys NV produced and sold sorting devices in which laser technologies were used. BEST devices were sold under Helius, Genius, LS9000 and Argus names. A former employee of BEST along with their congenials founded the company Visys in 2004 and in 2007 the same employee register a domain www.bestlasersorter.com under company Visys name. The content of this website was identical to other Visys websites created with areas of the Internet addresses www.visys.be and www.visysglobal.be.
After a year BEST filed and application to register Benelux trademark for class 7, 9, 40 and 42 goods and services according to the international Nico classification.
It was determined that in the search system www.google.be after entering searchable words Best Laser Sorter the second after BEST website will be provided link to Visys website. The later uses the following metatags in its website: Helius sorter, LS9000, Genius sorter, Best+Helius, Best+Genius, <…> Best nv.
Thinking that domain’s www.bestlasersorter.com registration and usage as well as the usage of these metatags damage its commercial name and its trademarks, violate provisions in the misleading and comparative advertising area which are associated with illegal domain name registration BEST sent a request to the court to obligate B. Peelaers and Visys to suspend this apparent damage and violations. In response to this application B. Peelaers and Visys filed an adversative application in which they were asking to remove the visual Benelux trademark BEST.
Antwerp court acknowledged BEST requirements as unreasonable except a requirement to acknowledge that while using the analysed metatags the provisions in misleading and comparative advertising area are violated. Also, the adversative application by B. Peelaers and Visys was rejected.
Both countries appealed against this decision to the court. Antwerp Court of Appeal having analysed BEST and B. Peelaers and Visys appeals rejected all BEST requirements including the ones associated with the violations of provisions in comparative and misleading advertising area, and it also removed the visual Benelux trademark BEST due to the lack of a distinctive character.
BEST filed an appeal in cassation regarding the decision. The court rejected BEST grounds of appeal in cassation except the one associated with legal violations in comparative and misleading advertising area and decided to terminate case analysis as well as pose a preliminary question to the Court of Justice:
“Does <…> directive [84/450] <…> article 2 and <…> directive [2006/114] <…> article 2 concept of “advertising” have to be explained as it encompasses not only domain name’s registration and usage but also metatags usage in website metadata?”
In Directive 84/450 article 2 point 1. and Directive 2006/114 article 2 point ‘a’ the advertising is defined as any form of presentation of information in connection with trade, business, craft or profession in order to promote the supple of goods and services.
The Court of Justice has already noted in its jurisprudence that according to this very wide description the advertising can be of various forms, therefore it cannot be limited with classical advertising forms.
In pursuance of determining whether certain activity is a form of advertising, how it is perceived in regards to previously mentioned provisions more concentration should go towards the goal in the article 1 in these directives to protect the traders from misleading advertising and its unfair consequences and conditions should be set by which the comparative advertising is allowed.
With these conditions, as the Court of Justice stated regarding Directive 84/450 and is it can be seen from Directive 2006/114 8, 9 and 15 stating parts, it is an aspiration to assess different interests which can be affected by the authorisation to use comparative advertising allowing the competitors to objectively show the advantages of the different comparative goods in order to promote competition associated with consumers’ interests. It is also aspired to prohibit the practice which can distort the competition, be harmful to the competitors and have a negative impact on consumers’ choice (18 June 2009 Decision’s L’ L’Oréal and others, C487/07, ECR I5185, point 68. and 18 November 2010 Decision’s Lidl, C159/09, ECR I11761, point 20.).
In addition, from Directive 2006/114 3, 4 stating parts and 8 stating part’s second sentence as well as from the concept of “misleading advertising” and “comparative advertising”, in provided Directive 84/450 article 2 2. and 2a. points and in Directive 2006/114 article 2 b. and c. points it can be seen that the publisher of Union’s laws with these directives intended to completely regulate the announcement of any form of advertising because of which a contract can or cannot be signed and tried to avoid the harm this advertising could potentially cause to consumers and traders as well as cause a distortion of a competition in internal market.
And thus, the concept of “advertising”, as it is perceived according to directives 85/450 and 2006/114, cannot be explained and applied in a way that the fair competition rules determined in these directives are not applied to the company’s actions made by the trader to promote the buying of that company’s products or goods which can affect consumer’s economic behaviour and thus make an impact on this trader’s competitors.
In the main case it was determinded that B. Peelaers registered domain name www.bestlasersorter.com under Visys name and used this domain name as well as metatags “Helius Sorter, LS9000, Genius sorter, Best+Heliu, Best+Genius, <…> Best nv” during the implementation of company’s commercial activity. The countries do not agree whether these B. Peelaers and Visys actions can be considered as “a form of [information] presentation” performed “in order to promote the supply of goods and services” as it is perceived according to Directive 85/450 article 2 point 1. and Directive 2006/114 article 2 a. point.
The court agreed with the general attorney-at-law conclusion that the registration of domain name is a mere formality when the domain name management company asked for a fee to register this domain name on its database and redirect Internet users who enter that domain name. Domain name registration does not necessarily mean that the domain name will be used to create a web site, and Internet users will be able to familiarize themselves with this domain name. The registration of the domain name does not mean that this domain name will be used to create a website, therefore the Internet users will be able to get accustomed to this domain name.
According to directives 85/450 and 2006/114 goals such a formality which does not necessarily include potential Internet users opportunity to familiarise themselves with the domain name and therefore cannot affect their choices cannot be considered as a form of information presentation by which it is aspired to promote domain name proprietor’s supply of goods and services as it is perceived according to Directive 85/450 article 2 point 1. and Directive 2006/114 article 2 a. point.
The court acknowledged that, as BEST claimed, after domain name registration the competitors are deprived of the opportunity to register and use this domain’s name for their websites. However, it also noted that only the registration of this domain name is not a presentation of advertising but only this competitor’s limitation of opportunities to present information whose realisation can also be limited with other legal provisions.
In addition, to the extent related to the use of a domain name, it is clear that in the main case a question arises regarding Visys use of domain name www.bestlasersorter.com on the website whose content is identical to the usual Visys websites content accessed using domain names www.visys.be and http://www.visysglobal.be
The goal of such use is an obvious domain name proprietor’s supply of goods and services promotion. Therefore, opposite to the claim of B. Peelaers and Visys this proprietor promotes their goods and services supply not only on the website, which is linked to upon entering domain name, but they also use the domain name itself which was carefully chosen for promotion of a bigger number of the Internet users visiting this website and getting interested in its proposal.
Also, this domain name’s, which holds a link to certain goods and services or to company’s commercial name, usage is information presentation form, which is meant for potential consumers and by which it is offered to them to find the website under this name associated with previously mentioned goods and services or the mentioned company. Moreover, praising words can constitute a part of a whole domain name, or it can perceived that the goods and services’ best qualities are praised by it which are linked to with this name.
In the case a question was also raised regarding the fact that Visys inserted metatags, like “Helius sorter, LS9000, Genius sorter, Best+Helius, Best+Genius, <…> Best nv“, into its metadata and its website programming code which match certain goods names and BEST commercial name’s abbreviation.
These metatags that consist of keywords (keyword metatags), which are read by search systems when they browse the Internet trying to provide numerous website links, are one of the factors allowing these systems to classify websites according to their importance taking into account the entered by the Internet user search word.
Therefore, the use of such metatags that match competitor’s goods names and their commercial name generally determines that when the Internet user enters one of these names or titles into the search system when looking for competitor’s goods the announced natural result is modified on behalf of the proprietor of these metatags and the link to their website is provided in the results list of this search, and in some cases next to the link to the competitor’s website.
It was determined in this case that when the Internet user entered words like “Best Laser Sorter” into the search system www.google.be, they were directed to Visys website, as the system provided them with the second result after BEST website.
In many cases the Internet user tries to find the information about this particular product or about this company and its goods’ selection by entering company product’s name or company’s name with associated offers as a search word. And thus, when links to websites where this company’s competitor’s goods are offered are announced in the natural search results list, the Internet user may perceive these goods as offering an alternative to this company’s goods or they can also think that by these goods the website is linked where this company’s goods and services are offered.
A fortiori occurs in cases when links to this company’s competitor’s website are provided among the primary search results next to the same company’s websites or when the competitor uses domain name, which holds a link to its commercial name or one of their product’s name.
Taking these conclusions into account, the court stated that since the use of metatags,which match competitor’s goods name or their commercial name, in website programming code determines that it is offered for the Internet user to enter one of the product’s names or this commercial name as a search word which this website associates with its search, the use can be considered to be as a form of information presentation as it is perceived in Directive 84/450 article 2 part 1 and Directive 2006/114 article 2 a. point.
According to court’s assertion, in this situation the fact that these metatags remain invisible to the Internet user and that not them but the search system is their first direct addressee is not significant. From this aspect it is enough to state that according to the previously mentioned provisions the “advertising” concept clearly encompasses all information presentation forms, including indirect information presentation forms when a fortiori they can have an impact on consumer’s economic behaviour and affect the competitor to whose name or products a link is provided through metatags. In addition, it is beyond any doubt that the use of metatags is an advertising strategy as much as it aims to encourage the Internet user to visit the website and become interested in their goods or services.
Taking this into consideration, it was stated that Directive 84/450 article 2 point 1. and Directive 2006/114 article 2 a. point have to be explained in a way that the concept of “advertising” described in these provisions, as in the analysed case, encompasses the use of domain name and metatags in website metadata. However, this concept does not contain domain name registration.