Use in the search advertising on net "Internet" of word designations that are confusingly similar to the registered trademarks

In this article I would like to dwell upon the problem of the legal uncertainty in relation to the issue touching upon the use in the search advertising on net "Internet" of word designations that are confusingly similar to the registered trademarks, in relation to the homogeneous goods or services for which this trademark provides for the legal protection.

Besides that, I suggest to consider the variants of the word designations use in which an advertising provider can be recognized a breaker of the exclusive right for a trademark, premised on the settled judicial practice. Thereby, it is worth pointing out that the courts' conclusions on this category of the disputes are rather controversial and no uniform vector has been still worked out.

In the epoch of the digital technologies an issue of activity on net "Internet" is especially acute, and increasingly frequently the persons' actions in the world wide web are becoming a ground for an emersion of disputes and legal lawsuits. One of such actions is placement of search advertising in the search systems such as Yandex or Google, by means of the services "Yandex-direct" Google AdWords.

First and foremost it is necessary to look into the matter of what the search advertising is, let us try to do it through an example of the service "Yandex-Direct".

Yandex. Direct – is the system of placement of the search and topic-based contextual advertising, therefrom it appears that the service "Yandex. Direct" is created and used to distribute advertisement.

The appropriation of the system "Yandex. Direct" – is holding of advertisement campaigns. The work of the system "Yandex. Direct" is based on the key words use that address a consumer to an advertisement.

Besides that, premised on the data on the service "Yandex. Direct", in particular, in section 'the website support' placed in a common access at address yandex.ru/support/direct/index.html, it appears that the essence of the legal relations that arose between an advertising provider and Yandex LLC, has no doubt the advertising nature appearing between an advertising provider and advertising distributor.

According to the glossary, search advertising – is the principle of an advertisement show at advertising places, according to which an Advertisement show is made provided that there is a word/word combination in a respective Search request of a user, specified by an Advertising provider as a criterion (key word/word combination) for this advertisement show. Thereby other (additional) criteria of the Advertisement show (geotargeting and others) can be also taken into account.

According to the legal position outlined in decree of the Office of the Federal Antimonopoly Service for city of Moscow dd. 13.04.2016 on case No. 4-14.3-381/77-16, "An advertisement (a banner) placed on net Internet represents a graphic presentation or text message of a small size which function is addressing of a user to a person's website who has placed a banner. A banner itself can't be considered separately from a website to which is gives a link, and is not in itself a ground for a decision taking by a person who has seen it, on making use of a service or on acquiring goods. Actually a banner that is inextricably connected with a website is a part of that website that is opened after a "click" to a banner and can't be considered in isolation from the very website".

Thereby it is worth pointing out that the service "Yandex. Direct" does not draft advertisements. Direct drafting of the texts of advertisements, including the specification of means of individualization in an advertisement text is made directly by the advertising providers, and the objective of Yandex LLC is to provide a respective opportunity to use a resource.

So in clause 1 of Decree of the Plenary Assembly of the Supreme Arbitration Court of the Russian Federation dd. 08.10.2012 No. 58 "Concerning certain issues of practice of use by the arbitration courts of Federal law "Concerning advertisement" it is explained that "according to clause 1 of article 3 of the Advertising Law,  the information distributed by any way, in any form and using any means addressed to an uncertain set of people and aimed at attracting attention to an advertised object, forming or supporting an interest to it and its promotion at the market is an advertisement and in connection therewith shall comply with the requirements lodged by the Advertising Law".

Article 5 of the Advertising Law specifies the general requirements to an advertisement, inter alia clause 2 of the article which is commented on, specifies that the following advertisement is unfair: such that represents an advertisement of the goods which advertisement is prohibited by this metgod, in this time or in this place, if it is made under the veil of an advertisement of other goods, which trademark or service mark is identical or confusingly similar to a trademark or service mark of the goods, in relation to advertisement of which the respective requirements and limitations are set, and also under the veil of an advertisement of a manufacturer or seller of such goods;

Thereby according to subclause 7 of clause 3 of this article, that advertisement is recognized unauthentic that contains the data, divorced from reality, on the exclusive rights for the results of the intellectual activity and the means of individualization of a legal entity, the means of individualization of the goods equivalent to them.

In case of the advertisement legislation breach, an advertising provider, an advertising producer or an advertising distributor can be brought to responsibility according to article 14.3. of the Code of Administrative Offences.

Together with it, in my article I place my emphasis not on breaches of the advertisement legislation, but rather on the exclusive rights breaches for the trademarks allowed in the search advertising on net "Internet", and their subsumption by courts when the right holders apply for the infringed right protection.

So, let us resort to the Civil Code according to clause 1 of article 1484 of the Civil Code of the Russian Federation (hereinafter – CC RF) "a person in whose name a trademark is registered (right holder) owns the exclusive right to use a trademark according to article 1229 of  CC RF by any method not contradicting to the law (the exclusive right for a trademark). A right holder can dispose of the exclusive right for a trademark".

According to clause 2 of article 1484 of CC RF "the exclusive right for a trademark can  be exercised for individualization of the goods, works or services in relation to which a trademark is registered, in particular, through a trademark placement: on the goods including on the labels, packages of the goods that are manufactured, offered for sale, sold, demonstrated on the exhibitions and trade fairs or otherwise brought into the civil commerce in the territory of the Russian Federation or stored or transported with this goal, or imported to the territory of the Russian Federation; when performing works, rendering services; on the documents associated with bringing of the goods to the civil commerce; in the offers on the goods sale, on the works performance, on the services rendering, as well as in the advertisements, on plate signs and in the advertisement; on the net "Internet", including in a domain name and in other means of addressing".

"Nobody is entitled to use, without a permit of a right holder, the designations similar to his/her trademark in relation to the goods, for which individualization a trademark is registered, or homogeneous goods, if as a result of such use there appears a probability of confusion" (clause 3 of article 1484 of the Code).

According to article 1250 of CC RF "the intellectual rights are protected by the methods stipulated by the Code, with due regard to the essence of an infringed right and consequences of this right infringement".

Article 1252 of CC RF provides for "the exclusive rights protection for the intellectual activity results and for individualization means is made, in particular, by lodging a claim on the actions suppression that infringe a right or create a threat of its infringement, - to a person committing such actions or implementing the necessary preparations to them; on compensation for losses - to a person who has used unlawfully the result of the intellectual activity or the individualization means without an agreement conclusion with a right holder (non-contractual use) or to a person who has otherwise infringed his/her exclusive right and inflicted him/her harm".

Besides that, according to subclause 1 of clause 4 of article 1515 of CC RF, a right holder is entitled to claim, at his/her option, a compensation payout from a breaker instead of compensation for losses: in the amount ranging from ten thousand to five million rubles, determined at a court's discretion premised on the nature of a breach.

Clause 43.2 of the joint decree of the Plenum of Supreme Court of the Russian Federation and the Plenary Assembly of the Supreme Arbitration Court of the Russian Federation dd. 26.03.2009 No. 5/29 "On certain issues appeared in connection with introduction into effect of the forth part of the Civil Code of the Russian Federation" explains that a compensation is subjected to collection if the fact of a breach is proved.

Premised on the specified legal norms, a conclusion can be made that the fact to be proved under a claim on the right protection for a trademark comprises the following circumstances: the fact of this right belonging to a plaintiff and the fact of its infringement by a respondent through using an identical designation or that designation which is similar to a trademark in relation to the goods or services, for which individualization a trademark is registered, or homogeneous goods or services, if as a result of such use there appears a probability of confusion.

If in relation to the fact proof of the exceptional right belonging to a plaintiff for a trademark a situation is rather comprehensive (it is sufficient to present to the court a certificate for a trademark), then in relation to the fact proof of a breach and the fact what will be a breach in this case, it is not quire clear, it remains a puzzle in what case the claims of a right holder will be satisfied.  

So, let us at first provide an insight into the stages of a breach proof that are the most comprehensive in this category of the cases.

1. Establishment of identity or confusing similarity of a word designation used in an advertisement and trademark.
2. Establishment of homogeneity of the goods and/or services that were advertised by means of search advertising and goods and/or services that are provided with the legal protection to a right holder's trademark.

As far as is known to the majority of the legal professionals practicing in the field of the intellectual property protection, the courts when assessing the confusing similarity are guided by the explanations contained in clause 13 of the Review of the practice of the cases consideration by the arbitration courts relating to use of the intellectual property legislation approved by information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dd. 13.12.2007 No. 122, according to which an issue on the designations similarity is an issue of the fact and can be resolved by court without commissioning of expert evidence. The issue on confusing similarity of two word designations used on the goods of a plaintiff and respondent can be resolved by the court from a position of an ordinary consumer and does not require any special knowledge.

As stated in clause 37 of the Judicial review on the cases relating to settlement of disputes on the intellectual rights protection, approved by the Presidium of the Supreme Court of the Russian Federation dd. 23.09.2015, upon detection of confusing similarity of the designations, a general impression is taken into account that they create on the whole on an average consumer  of the respective goods or services.

So, the main objective of a right holder when proving the confusing similarity, is to convince the court in it having proved, as far as possible, the availability of sound, graphic and semantic criteria of similarity.

When proving homogeneity one should be guided by clause 45 of the Rules of drafting, filing and consideration of the documents that are a ground for the legally significant actions commission for state registration of the trademarks, service marks, collective trademarks approved by the Order of the Ministry of Economic Development of the Russian Federation dd. 20.07.2015 No. 482, according to which "When establishing homogeneity of the goods, a possibility in principle is determined of a concept emersion in a consumer of these goods belonging to one of the manufacturers.

Thereby the following things are taken into account: type, kind of the goods, their consumer properties, functional purpose, type of material they are manufactured of, complementarity or interchangeability of the goods, conditions and channels of their implementation (a common place of sale, resale through a retail or wholesale network), a range of consumers and other characteristics.

A conclusion on homogeneity of the goods is made based on the results of an analysis of the enumerated features in their totality in case the goods or services, due to their nature or appropriation, can be referred by the consumers to one and the same source of origin (manufacturer)".

Let us assume that you have managed to provide an evidence to the court that you are a right holder, that a word designation used in search advertising is confusingly similar to your trademark, and, inter alia, is used in relation to the homogeneous goods or services.

And now you are sure of your victory and approaching triumph of justice, you think only of the fact if the court will satisfy claims on a compensation collection to the full extent or will decrease a compensation premised on the necessity to restore the material position of a right holder.

The zero hour is in store, a judge comes out of a consultation room, you are prone to anxiety, he/she starts announcing the substantive provisions of a decision: "… in the name of the Russian Federation … the court has DECIDED: In satisfaction of the asserted claims – to abjudicate" – like a bolt out of the blue, and at the same minute all hopes break down, dreams of restoration of justice collapse, the brain starts, in a fussy and disorderly manner, bringing back to memory the legal position fragments set out in a statement of claim, the evidence taken as basis of a lawsuit, the quotations from the Code swarm as a crowd of bees, you start bringing back to memory your speech and your opponent's speech trying to find out an answer to a question: "Why abjudication?"…

You will get a reply to this question not later than in five business days after the substantive provisions announcement, together with a substantiated court decision.

Now I suggest to come back down to earth with a bump/bang, to abstract your mind from this lyrical digression which a reader has sinked into, imaging oneself in a courtroom, and to proceed with the main question of this article regarding the fact what is unlawful use in search advertising on net "Internet" of a word designation that is identical or confusingly similar to a trademark, in relation to the homogeneous goods or services.

Unlawful use of a word designation that is confusingly similar to a trademark will be recognized, if a right holder proves that this designation has been used directly in the text of an advertisement (of an advertising banner) containing the promotional information and a reference addressing to a advertising provider's website (a would-be breaker).

If a confusingly similar designation is used as a key word in a user's search request specified by an Advertising provider as a criterion (of a key word/word combination) to show this Advertisement, then the asserted claims satisfaction will be more likely abjudicated by the court on the grounds that the "Key words used on net Internet, being a technical parameter, are needed for the users to search information and can't be the individualization means of the goods and services, in connection therewith the exclusive rights infringement of a plaintiff for the trademarks is absent, because the key words are used on net Internet to search information on part of the users and represent a technical parameter defined by an advertising provider that is specified by this parameter by means of the respective configuration tools in the systems of online-advertisement, that's why the key words can't be attributed to the methods of a trademark use".

Is a court abjudication legally valid on these grounds? It is you to decide.

This question has not been properly examined and described both by the legislator and by the courts, in connection therewith both the participants of the business intercourse and judges still don't have an unambiguous answer what is to be regarded as a breach in this situation.

At the end of my article I gave the third opinion that has been arisen in the community of judges, which actually consists in the following: "Use by a respondent of disputable designations namely as the key words makes it possible for a respondent to attract the consumers' attention to the goods being sold by a respondent, because they create the necessary technical conditions for an advertisement show (advertising banner) of a respondent to an interested consumer, in which the goods advertised by a respondent can be perceived by a consumer as those having a name of a "TRADEMARK", as well as it creates the conditions for an easy link immediately to a respondent's website, where a respondent advertises legally his/her goods that are similar to the goods for which individualization the disputable trademarks are registered".

When recognizing the fact of breach in this case, the court stated that these words choice by a respondent (that are similar to the trademarks of a right holder) as the key words to be used in a search request, is the deliberate use of them in their advertising activities. A consumer that initially manifests an interest in the goods labeled with the disputable trademarks, adds to a search box a name of trademarks and comes across a respondent's advertisement offering the goods for sale similar to those offered by a plaintiff, thereby the key words, they also are – the trademarks of a plaintiff, they neighbor with a name of the goods having the consumer functions, in which acquisition a consumer is interested, and with a reference to a respondent's website, which single use (click) readdresses a consumer to a respondent's website in which the latter places legally advertisement of the goods manufactured and sold by it.

In my opinion, in this case the court has made the correct conclusions witnessing that not only use in an advertisement text of a word designation that is confusingly similar to a trademark can be recognized as a breach, but also these designations use without a right holder's permit as the key words for use in a search request is their deliberate use in one's advertising activity.

Together with it, it should be noted that not any use of the word designations that are confusingly similar to the trademarks as the key words in the search systems, shall be recognized a breach but only a deliberate action aimed at technical conditions creating to show an advertisement (advertising banner) to an interested consumer, aimed at an interest attracting in one's goods or services, what gives an advantage in the entrepreneurial activity due to a reputation use of another person's trademark.

So, when adopting this judicial act the court has made a step in the direction of establishment of more precise "game rules" on net "Internet", because the World Wide Web although has penetrated deeply enough into our life, but still there are no unambiguous rules in relation to many criteria of the network users' behavior. Summing up the total of my article I would like to end it with a famous quotation of Ancient Greek philosopher Socrate: "Truth is sprout in discussion".