The EU Trade Mark Court of Alicante has held that an advertisement containing third-party trade marks, in the context of keyword advertising, undermined the indication-of-origin, advertising, and investment functions of the asserted EU trade marks. This judgment is now final.

The claimant, Wolters Kluwer, was represented by David Fuentes Lahoz, author of this article.

Online referencing services such as Google Ads

Online referencing services, like Google Ads, are advertising platforms that enable businesses to create and disseminate ads. Typically, these ads appear on Google’s search engine when users enter certain keywords. Advertisers bid on specific keywords so that their ads show up in sponsored results or on partner websites. The main goal is to drive relevant traffic to their website, increase visibility, and generate leads or sales.

For illustrative purposes, imagine a business wanting to promote “the tastiest Spanish omelette in the European Union”. With Google Ads, each click on the ad becomes a potential customer stepping into your “virtual store”.

When a user searches on Google, the search engine displays two types of results:

1. Natural or organic results: sites that best match the keywords used.
2. Sponsored links or ads: those that have paid to reserve certain keywords.

Background to the A3 Case

Wolters Kluwer is the holder of the following trademark registrations (the “Invoked Trade marks”): 

• EU figurative trademark (No. 004379781), in force, for goods and services in classes 9, 16, 35, 36, 38, 41, 42, and 44.
• EU word trademark "WOLTERS KLUWER" (No. 002771129), in force, for goods and services in classes 9, 16, 35, 36, 38, 41, and 42. 
• Spanish trademark "A3 SOFTWARE" (No. 2680542), in force, for goods and services in classes 9, 16, 37, 38, 41 and 42.
• Spanish word trademark "A3ERP" (No. 2938747), in force, for goods and services in class 9.
• Spanish word trademark "A3INNUVA" (No. M4010635), in force, for goods and services in classes 41 and 42.

These Invoked Trade Marks are widely recognised, and the claimant successfully proved their reputation in the European Union and, where applicable, in Spain, relying on rankings, awards, annual sales, promotional efforts, prestige, quality, customer loyalty, and public information.

The defendant, Holded Technologies, S.L., used the Invoked Trade Marks without authorisation on its websites. The pages included statements such as: “Holded is the easiest and most intuitive alternative to A3 Software” and “automate your accounting and avoid unnecessary headaches”, highlighting the alleged advantages of Holded’s products without an objective comparison between A3 Software and other market alternatives. For instance:

Furthermore, Holded used the Invoked Trade Marks in the text of ads it ran via Google Ads. As a result, when the Invoked Trade Marks—specifically “A3 software,” “A3 innuva,” or “A3ERP”—or related terms (“A3 nomina,” “A3 contabilidad”) were entered as keywords, Holded’s website, along with any references to the Invoked Trade Marks, would appear in the sponsored link:

Wolters Kluwer filed an action before the EU Trade Mark Court of Alicante against Holded, contending that the defendant infringed the Invoked Trademarks by using them (i) on its websites and (ii) within Google Ads advertisements. The core arguments were:

1. A likelihood of confusion existed among consumers regarding the source of the products or a possible economic link between Wolters Kluwer and Holded (e.g., a joint venture or co-branding arrangement).
2. Holded’s use of the Invoked Trade Marks took unfair advantage of their reputation (by gaining a competitive edge in search engine rankings) and tarnished both their distinctiveness and their reputation, through the mere use of the trade marks and the presentation of Holded’s products as an “alternative to” the products sold under the Invoked Trade Marks (based on ECJ in L'Oréal v Bellure and Intel).

Concerning the use of the Invoked Trade Marks as keywords, the claimant acknowledged that using a third-party trade mark as a keyword can be lawful, provided that the trade mark does not appear in the ad text or on the advertiser’s website, in line with ECJ rulings (e.g., Google France and Interflora). In this case, however, the Invoked Trademarks did appear both in the ad text and on Holded’s website, potentially misleading consumers.

The decision

The Court ruled in favour of Wolters Kluwer, finding a clear case of trade mark infringement. It emphasized that Holded’s use of the Invoked Trade Marks undermined several core trade mark functions:

1. Essential function (indication of origin). The use created the false impression that A3 was linked to Holded.
2. Advertising function. Using the Invoked Trademarks in Holded’s ads impaired their role as a promotional tool and part of Wolters Kluwer’s commercial strategy.
3. Investment function. The ad text conveyed misleading information to consumers, risking harm to the reputation of the Invoked Trade Marks.

Additionally, the Court found that the defendant’s use of the Invoked Trademarks did not qualify as “descriptive use” (Article 37.1.c of the Spanish Trade Mark Act), nor did it meet the criteria for lawful comparative advertising (Article 10 of the Spanish Unfair Competition Act), because the advertisement failed to objectively compare essential, relevant, verifiable, and representative features of both parties’ goods and services.

Conclusions: Beware the use of third-party trade marks

This case is especially noteworthy because the EU Trade Mark Court of Alicante ruled that an ad containing third-party trade marks selected via an online referencing service undermined the core functions of the asserted EU trade marks. Essentially, this decision could serve as a landmark in Spain, confirming the persistent trend of Spanish courts to protect trade mark holders against infringers.

It is worth noting that the EU Trade Mark Courts of Alicante, which allow claims with pan-European effects, are known for taking a pro-rights-holder stance. This Spanish judgment addresses key issues and risks every company should consider when advertising its products or services through online referral services. It clarifies that using a third party’s trade mark as a keyword may be lawful, provided that the trademark does not appear in the advertisement text or on the advertiser’s website. Otherwise, the rights holder’s trade mark functions may be harmed, resulting in clear trademark infringement.