An important decision of the European Court of Justice (ECJ) last month in the case of Portakabin Limited and Portakabin BV v Primakabin BV, has further clarified the question of liability in relation to the use of registered trade marks as part of ‘keywords’ used within Google’s AdWords service. Interpreting a 1988 European Directive to member states, the ECJ held that the use of a trademark in AdWords without consent will be unacceptable if it does not enable an average internet user (or only enables such a person with difficulty) to ascertain whether the goods or services referred to by the advertisement originate from the proprietor of the trade mark or from an undertaking economically linked to it or, on the contrary, originate from a third party. The ECJ also held that advertisers cannot generally rely in such circumstances on the “honest practices” exception. Importantly, the decision also applies with respect to key words which are similar to registered marks. Interestingly, the ECJ considered that advertisements by resellers should be generally permitted unless there is a legitimate reason for the rights holder to oppose the advertising, such as giving the impression that the advertiser and the rights holder are economically linked or use which is seriously detrimental to reputation. The Court was of the view that the advertising for sale of second hand and used goods of itself should not be a ground for opposition. However, if the reseller were to replace or conceal the registered trademark with its own label this would not be acceptable. Also, a specialist reseller of second-hand goods may advertise to the public its resale activities with respect to second hand goods both under the registered mark of another person and in respect of other goods provided that the sale of the other goods does not seriously damage the image of the third party registered mark. The presentation, quality and volume of such goods would be a relevant factor. The Portakabin case follows the ECJ decision in Google France v Louis Vuitton earlier this year. The Google France case also ruled that an internet referencing service provider (including Google) will not be liable for trade mark infringement in relation to the display of AdWords that contain trade marks. The rationale for the decisions was that Google does not itself use the marks. Trademark owners in Australia are in a more advantageous position. Google will not allow the use of registered trade mark rights as part of AdWords once it has been notified of the owner’s rights. This is in light of the March 2010 Federal Court decision in Mantra Group v Tailly case which restrained the use of AdWords that correspond with a registered trade mark. Mantra v Tailly is also authority with respect to the unauthorised use of a trade mark in a domain name or meta data on a website. We still await a decision in the Australian Competition and Consumer Commission (ACCC) action against Google in the Federal Court. As distinct from the ECJ cases, the ACCC case is understood to concern alleged misleading and deceptive conduct under the Trade Practices Act 1974. For more information relevant to your particular circumstances, please contact Gary Rogers on +61 (0)2 9300 3101 (direct), or +61 (0)411 110 303 (mobile), or by email at grogers@blueprintlaw.com.au, or click to call by Skype.