According to this article, Germany’s Federal Court of Justice has “sent” a case to the European Court of Justice to seek clarification [query: Is this like a federal court certifying a question to a state supreme court in the U.S.?] of whether the purchase of a competitor’s trademark as a Google AdWord constitutes “use” of a trademark under “EU trademark rules.”
This issue has been hotly contested in the United States, because if the purchase of another’s trademark as a Google AdWord is not a “use in commerce,” (at least as long as the competitor’s trademark did not appear in the text of the Google ad), then that effectively forecloses trademark liability for the action. Cases can be dismissed early on in the proceedings. Google’s revenue stream is left intact. One circuit court has bought that argument. In the Second Circuit (which includes New York) courts have found that the mere purchase of the competitor’s trademark as a Google AdWord does not constitute a “use in commerce.” Courts in the rest of the country, however, have not been so gracious, and at least allow the cases to continue. For example at least one federal district court in Minnesota (pdf) indicated that, based upon all of the circumstances, purchase of a competitor’s trademark as an AdWord could be an infringing use.
Google, perhaps to avoid personal liability, as implemented a DMCA-like “notice and takedown” procedure. Its US, UK, Ireland, and Canada policy states that if the competitor’s trademark appears in the header or body text of a competitor’s ad, the competitor may contact Google and the trademark term will be removed from the ad. This policy tracks with a decision by a Court in the Eastern District of Virginia that determined that trademark “use in commerce” could exist if a competitor used a trademark in body text or headers of advertisements seen by consumers, but that “use in commerce” could not exist if the trademark merely triggered the ad to be shown. In Europe, if a trademark owner discovers that a competitor has purchased Google AdWords containing the trademark, Google will disable those keywords. Perhaps this suit tests whether Google can implement a US-style takedown.