1. The Facts of the case
The legal issue was whether the appellee, Bank Norwegian, as s part of its marketing strategy, could use the claimants’ “distinguishing marks” as paid keywords in Google Ads. The claimants: Komplett Bank ASA, Ikano Bank AB (publ) – Norway Branch, and BRAbank ASA, were all other banks that offered the same products as the appellee. By using Google’s paid referencing service – ‘AdWords’ – a link to Bank Norwegian’s website would appear when an internet user googled keywords corresponding to the claimants’, or part of their, trademarks/signs. The purpose of the appellee’s advertisement was to offer consumers alternatives to the claimants’ loan offers.
The parties agreed that such use of competitors’ trademarks did not constitute a trademark infringement. However, the claimants argued that the appellee’s use of their trademarks violated the general clause in section 25 of the Marketing Control Act (the “MCA”), stating that “no action shall be performed in the course of trade which conflicts with good business practice among traders.” As the Court of Appeal concluded, the advertising practice was in line with the “good business practice” standard set out in the MCA.
The Federation of Norwegian Enterprise (“Virke”) supported the banks, while Google PLC supported Bank Norwegian.
2. The considerations and opinion of the Supreme Court
The Supreme Court referred to the jurisprudence of the European Court of Justice (the “ECJ”) stating that otherwise lawful advertising by the use of keywords corresponding to trademarks with the purpose of offering an alternative to, as opposed to an imitation of, the product or service concerned and without adversely affecting the functions of the trademark, falls, as a rule, within the ambit of fair competition in the sector for the goods or services concerned and is thus not considered a trademark infringement.
However, the central issue before the court was whether section 25 of the MCA provided supplementary protection in this regard. The Supreme Court has previously resolved that the statutory provisions of the Trademark Act shall not be considered exhaustive and thus, do not exclude the application of provisions relating to unfair competition. The Court’s position in this matter corresponds to what is laid down in the preface to the EU Directive 89/104/EEC of 21 December 1998 (Trademark Directive), which is not formally binding for Norway. Consequently, section 25 of the MCA may provide supplementary protection even though the disputed act is within the field of trademark law. Nevertheless, such protection is only considered relevant where there are elements in the case that are not otherwise captured by the provisions of the Trademark Act and typically apply to matters of a different nature than those regulated by the Act. Moreover, considerations of fair and healthy competition must favor supplementary protection of the interests concerned. Whether section 25 of the MCA is applicable must be decided based on the individual case.
In the following, the Supreme Court referred to the Google France Case C-238/08 where the ECJ stated: “Although it thus proves to be the case that advertisers on the internet can, as appropriate, be made liable under rules governing other areas of law, such as the rules on unfair competition, the fact nonetheless remains that the allegedly unlawful use on the internet of signs identical with, or similar to, trademarks lends itself to examination from the perspective of trade-mark law.”
Even though the Supreme Court emphasized that EU law does not provide binding guidelines for the interpretation of the provisions of the MCA, the Supreme Court pointed out that the ECJ already had assessed the considerations prevailing in the present case; more precisely, the trademark holder’s need for protection of the effort and money invested in building the trademark versus the desire to promote fair competition. As the ECJ previously has decided that otherwise lawful sponsored advert that takes the Internet user to a site offering “alternatives” to the trademark owner’s goods/services would be “fair competition,” such advertising could not be considered unfair and prohibited according to the MCA. Finally, the Supreme Court emphasized that industrial practice, including the prevailing views within the business, could not be decisive for the outcome of the legal assessment.
3.1. The Relationship between the MCA and Trademark Law
The decision clarifies that the application of section 25 of the MCA, in addition to more specific rules in trademark law, is subject to a high threshold. However, section 25 of the MCA provides guidance on a legal standard not necessarily captured by relevant statutory provisions within trademark law. The assessment of whether section 25 is applicable in the current case must be based on whether the case addresses interests and considerations of a different kind than those considered relevant in trademark law. Hence, the scope of trademark law is crucial to the application of the MCA when it comes to the question of supplementary protection.
3.2. The Impact of EU Law
Concerning the scope and interpretation of relevant trademark legislation, the jurisprudence of the ECJ has a significant impact on national trademark law. However, despite the Supreme Court emphasizing that EU law does not provide binding guidelines for the interpretation of the MCA, the case law of the ECJ is given decisive weight. The ECJ has already assessed whether such methods of advertising as in the present case shall be considered as “tak[ing] unfair advantage of, or is [considered] detrimental to, the distinctive character or the repute of the trademark” pursuant to the Trademark Directive. The ECJ has stated that an otherwise lawful sponsored advert that takes the Internet user to a site offering “alternatives” to the trademark owner’s goods/services would be “fair competition” and will not be considered as “free-riding.” Concerning the position of the ECJ, the Supreme Court argues that the MCA cannot, in a similar case, provide supplementary protection to trademark law.
The Supreme Court decision clearly illustrates that jurisprudence of the ECJ, which plays a prominent role in the interpretation of trademark law provisions, will also provide guidance for the scope of applicable supplementary provisions. Use of signs identical with, or similar to, trademarks lend itself to examination from the perspective of trade-mark law even though rules governing other areas of law may apply.
3.3. Industrial Practice
The Supreme Court places little or no weight on industrial practice. The Norwegian Council, dealing with unfair marketing practices (in Norwegian: Næringslivets Konkurranseutvalg, hereinafter referred to as “NKU“), has previously stated that the use, as keywords in an internet referencing service, of signs which correspond to trademarks, without consent having been given by the proprietors of those trademarks, is considered a violation of section 25 of the MCA. Hence, we expect the NKU and the courts to adjust their practice accordingly in the future.
It remains to be seen whether the decision in the Bank Norwegian case will affect the industry’s perception and its practice. Nevertheless, the legal requirements to the advertisement itself are not changed; a company may be using a trademark as keywords in advertising that offers an alternative to the proprietor’s goods or services concerned unless that advertisement offers a mere imitation of them, causes dilution or tarnishment or adversely affects the functions of the trademark.
The decision in the Bank Norwegian case clarifies the scope of section 25 of the MCA for search engine advertising. Nevertheless, the judgment provides limited guidance on the scope and applicability of the supplementary protection under section 25 of the MCA in general. Moreover, we still seek further clarity on what is considered unfair competition and thus contrary to “good business practice.”
Carl A Christiansen, IDI Country Expert for agency and distribution in Norway