Argentine court ruling concludes that using a well-known trademark as a keyword in Google Adwords by a competitor constitutes trademark infringement and unfair competition.
Organización Veraz filed a trademark lawsuit against Open Discovery S.A. for the unauthorized use of its well-known trademark VERAZ as a keyword in Google’s online advertising service, Adwords. The use redirected users to the defendant’s website when searching for those trademarks, generating consumer confusion, diversion of clientele, and undue exploitation of the plaintiff’s reputation. The plaintiff sought injunctive relief and full compensation for damages based on trademark infringement and acts of unfair competition.
The trial court recognized the notoriety of the trademarks, ordered the defendant to cease the unauthorized use, and awarded damages. On appeal, Chamber III of the National Civil and Commercial Federal Court raised the damages and found that the conduct also constituted an act of unfair competition. (See Court Decision I)
However, the Supreme Court overturned that ruling, holding that the appellate court had failed to properly assess whether the use of the plaintiff’s trademarks could generate a likelihood of confusion or association. The Supreme Court instructed the lower court to issue a new ruling in accordance with federal trademark principles, particularly those requiring at least some degree of connection between the infringing use and the trademark holder in cases involving well-known marks.
In its revised judgment (See Court Decision II), Chamber I of the same appellate court based on the new standard set forth by the Supreme Court and the Attorney General’s opinion found trademark infringement and unfair competition. It confirmed that the plaintiff’s trademarks were indeed well-known and that their use as keywords constituted unauthorized “use in the course of trade.” The court found that this use generated an undue association with the well-known mark Veraz, thereby constituting trademark infringement. It further held that the advertisements and the landing page of the respondent lacked sufficient graphic or textual elements to alert the average consumer that the services were provided by a different entity, increasing the risk of association. Consequently, it upheld the order to cease use and confirmed the award of ARS 3,336,468 in damages for trademark infringement, but also includes the ruling on unfair competition, as that issue was considered to be an act of unfair competition.
This ruling adds to other argentine cases where competitors’ use of keywords is deemed illegal. For a comment of the Supreme Court ruling see the article written by Dr. Octavio Mitelman.
