The enemy of the BEST? Metatags come to court

The driving forces of information and communication technology have raced ahead so swiftly in the past decade and a half that words like 'metatag' have an almost prehistoric air to them.  Not so prehistoric, though, that Europe's favourite IP court doesn't have to deal with it.  The case in question is Case C‑657/11 Belgian Electronic Sorting Technology BV v Bert Peelaers, Visys NV, a ruling from the Court of Justice of the European Union (CJEU) which was published yesterday on a request for a preliminary ruling made by the Belgian Hof van Cassatie in December 2011 [Merpel notes that, even inclusive of the time taken to ask the Advocate General for an Opinion, and possibly even to read it, the CJEU dealt with this reference in less than 20 months; the momentum towards swifter answers for national courts' questions continues apace]. 

BEST and Visys both made and sold sorting machines and sorting systems which used laser technology.    BEST’s machines were sold under the names ‘Helius’, ‘Genius’, ‘LS9000’ and ‘Argus’.  Visys was set up in October 2004 by, among others, Peelaers, a former employee of BEST.

In January 2007 Peelaers registered, on behalf of Visys, the domain name www.bestlasersorter.com. The content of the website hosted under that domain name was -- and still is -- exactly the same as that of Visys's other websites, which were accessible under the Belgian domain names www.visys.be and www.visysglobal.be.

In April 2008 BEST applied for the Benelux figurative trade mark BEST for goods and services in Classes 7, 9, 40 and 42 of the Nice Agreement.  Later that month a court official established (i) that, when the words ‘Best Laser Sorter’ were entered in the Belgian version of Google, the second search result to appear, directly after BEST’s website, was a link to Visys’s website and (ii) that Visys used for its websites the following metatags: ‘Helius sorter, LS9000, Genius sorter, Best+Helius, Best+Genius, ... Best nv’.

Since it considered that the registration and use of the domain name www.bestlasersorter.com and the use of those metadata both infringed its trade mark and trade name and constituted infringements of the law concerning misleading and comparative advertising and the law concerning the unlawful registration of domain names, BEST sued Peelaers and Visys, seeking injunctive relief; Peelaers and Visys counterclaimed for annulment of the BEST mark.

In September 2008 the President of the Antwerp Commercial Court dismissed BEST's claims, with the exception of that alleging a breach, by the use of the metatags in question, of the law on comparative and misleading advertising. He also dismissed the counterclaim brought by Peelaers and by Visys.

BEST appealed and Visys cross-appealed to the Antwerp Court of Appeal which, in December 2009, dismissed all BEST's, including the claim alleging a breach of the rules concerning misleading and comparative advertising, but cancelled the registration of BEST's figurative mark on the ground that it lacked distinctive character.

BEST then appealed to the Hof van Cassatie on a point of law. That court rejected BEST's grounds of appeal -- with the exception of that alleging infringement of the provisions on comparative and misleading advertising. However, that court decided to stay proceedings and to refer the following question to the Court:

‘Is the term ‘advertising’ in Article 2 of [Directive 84/450 [on misleading advertising]] and in Article 2 of [Directive 2006/114 [on misleading and comparative advertising]] to be interpreted as encompassing, on the one hand, the registration and use of a domain name and, on the other, the use of metatags in a website’s metadata?’

Yesterday the CJEU ruled thus:

"Article 2(1) of Council Directive 84/450, ... as amended ..., must be interpreted as meaning that the term ‘advertising’, as defined by those provisions, covers, in a situation such as that at issue in the main proceedings, the use of a domain name and that of metatags in a website’s metadata. By contrast, the registration of a domain name, as such, is not encompassed by that term".

Looking more closely at the CJEU's train of thought:

• Articles 2(1) of Directive 84/450 and 2(a) of Directive 2006/114 define advertising as a representation in any form made in connection with a trade, business, craft or profession in order to promote the supply of goods or services.  That particularly broad definition means that the forms which advertising may take are very varied and that definition is not therefore limited to traditional forms of advertising [it would be difficult to convince the CJEU that the definition should be restricted only to those forms of advertising that EU legislators knew about, says Merpel, given the open weave of the definition].
  
• The term ‘advertising’ cannot be interpreted and applied in such a way that steps taken by a trader to promote the sale of his products or services that are capable of influencing the economic behaviour of consumers and, therefore, of affecting the competitors of that trader, are not subject to the rules of fair competition imposed by those directives ["Capable of influencing the economic behaviour of consumers" is an important concept in modern EU law; it pervades EU trade mark law too. There's a sort of legal functionalism here: if a given act is capable of influencing consumer behaviour, then it must be covered by one piece of EU legislation or another].
  
• The registration of a domain name is nothing other than a formal act by which the body designated to manage domain names is asked to enter, in exchange for payment, that domain name into its database and link internet users who type in that domain name only to the IP address specified by the domain name holder. The mere registration of a domain name does not automatically mean, however, that it will then actually be used to create a website and that, consequently, it will be possible for internet users to become aware of that domain name. Such  a purely formal act which, in itself, does not necessarily imply that potential consumers can become aware of the domain name and which is therefore not capable of influencing the choice of those potential consumers, cannot be considered to constitute a representation made in order to promote the supply of goods or services of the domain name holder [this is much the same as registration of a company name: if the company is registered but does not trade, and consumers do not get to know of it, relief based on influence upon consumer behaviour will be hard to obtain].
• It is irrelevant that the registration of a domain name has the consequence of depriving competitors of the opportunity to register and use that domain name for their own sites. However, the mere registration of such a domain name does not in itself contain any advertising representation, but constitutes, at most, a restriction on the communication opportunities of that competitor, which may, where appropriate, be penalised under other legal provisions.
  
• In contrast, the use of a domain name, which makes reference to certain goods or services or to the trade name of a company, constitutes a form of representation that is made to potential consumers and suggests to them that they will find, under that name, a website relating to those goods or services, or relating to that company. A domain name may, moreover, be composed, partially or entirely, of laudatory terms or be perceived, as such, as promoting the goods and service to which that name refers.
  
• The exclusion, provided for in Article 2(f) of Directive 2000/31 [the E-Commerce Directive], of certain information and communications from the definition of commercial communication does not mean that that information and those communications are also excluded from the concept of ‘advertising’ within the meaning of Article 2(1) of Directive 84/450 and Article 2(a) of Directive 2006/114, that concept being defined by expressly including any form of representation.
  
• With regard to the use of metatags in a website’s metadata, such metatags consisting of keywords, which are read by search engines when they scan the internet to carry out referencing of the many sites there, constitute one of the factors enabling those engines to rank sites according to their relevance to the search term entered by the internet user. Accordingly, the use of such tags corresponding to the names of a competitor’s goods and its trade name will, in general, have the effect that, when an internet user looking for the goods of that competitor enters one of these names or that trade name in a search engine, the natural result displayed by it will be changed to the advantage of the user of those metatags and the link to its website will be included in the list of those results, in some cases directly next to the link to that competitor’s website. In the majority of cases, an internet user entering the name of a company’s product or that company’s name as a search term is looking for information or offers on that specific product or that company and its range of products. Accordingly, when links to sites offering the goods of a competitor of that company are displayed, in the list of natural results, the internet user may perceive those links as offering an alternative to the goods of that company or think that they lead to sites offering its goods. This is particularly the case when the links to the website of that company’s competitor are among the first search results, close to those of that company, or when the competitor uses a domain name that refers to the trade name of that company or the name of one of its products [the implication being that this may influence the consumer's behaviour].
  
• [And, spelling things out for the avoidance of doubt] So far as the use of metatags corresponding to the names of a competitor’s goods and its trade name in the programming code of a website has the consequence that it is suggested to the internet user who enters one of those names or that trade name as a search term that that site is related to his search, such use must be considered as a form of representation within the meaning of Article 2(1) of Directive 84/450 and Article 2(a) of Directive 2006/114. The concept of advertising expressly encompasses any form of representation, and therefore including indirect forms of representation, particularly where they are capable of influencing the economic behaviour of consumers and, therefore, of affecting the competitor whose name or goods are referred to by the metatags.

No surprises here, says the IPKat.  Merpel wonders, though, whether there is consistent treatment as between competitors' trade marks when they are keywords, which one purchases from Google, and competitors' trade marks that you don't pay for but just happen to use as metatags.

The enemy of the Best here and, per Voltaire, here

A katpat goes to Véronique Pede (Eubelius Attorneys at law, acting for Bert Peelaers and Visys NV) for reminding this Kat that he hadn't posted anything on this decision.