The law on comparative advertising has been harmonised throughout the EU by the Directive on Misleading and Comparative Advertising which aims to protect consumers, competitors and the interest of the public in general against misleading advertising and its unfair consequences.
This Directive covers any form of representation which is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of goods or services. It is clear that a misleading TV advert or a misleading billboard fall foul of EU rules. It was not clear, until the ruling given recently by the Court of Justice of the European Union (CJEU), whether the use of so-called “metatags” can be considered as a form of advertising.
Metatags are the hidden keywords read by internet search engines and used to rank the results displayed to a user. They store information about a webpage but are not displayed in a web browser. Metatags, for instance, provide information such as a description of the page and keywords that are relevant to the page. Many search engines use the information stored in metatags when they index web pages.
Companies make discreet use of these metatags to ensure that customers making an online search for the brand name or trademarks of a competitor are also presented with their own website containing their products.
The Luxembourg-based court recently dealt with a referral made to it by the Belgian courts for a preliminary ruling in proceedings instituted by Belgian Electronic Sorting Technology NV (Best) against Visys NV. Both parties to the proceedings are manufacturers of laser sorting equipment. Visys went on to embed in its website various metatags containing the names of popular Best sorters, and to register the domain name www.bestlasersorter.com, at which it set up a mirror image of its own website.
Best brought trademark infringement proceedings and proceedings against Visys under the comparative advertising legislation for use of the domain and of metatags that included Best’s trademark.
The referral was preceded by a judgment delivered by the Belgian Court that had rejected Best’s claims in their entirety. On appeal however, the Belgian Court stayed the comparative advertising claim and sought guidance from the CJEU on whether or not the term “advertising” encompasses the registration and use of a domain name and the use of metatags in a website’s metadata.
In its ruling, the CJEU noted that the definition of advertising under EU legislation was particularly broad and not limited to traditional forms of advertising. Basing itself on the dual purpose of the Directive, the court considered that steps taken by a trader to promote the sale of his products or services are subject to the rules of fair competition laid down in EU legislation insofar as they are capable of influencing the economic behaviour of consumers and, therefore, of affecting the competitors of that trader.
The court further ruled that the use of metatag corresponding to the brand name or trademark of a competitor’s goods in the programming code of a website can constitute advertising, as it suggests to the searching users that the site bearing the tag is related to their search.
In this regard, the ECJ considered it irrelevant that metatags are invisible to the internet user. The court concluded such use of metatags is a promotion strategy in that it aims to cause the internet user to visit the site of the metatag user and to take an interest in its goods or services.
On the other hand, the CJEU considered that the registration of a domain name does not constitute a form of advertising, although the use of such domain name is a form of representation to the consumer designed to promote goods or services. Visys’ use of the domain name www.bestlasersorter.com to host a website, the content of which was identical to its existing websites, was deemed to be a form of advertising.
Effectively, therefore, companies that include key trademarks or brand names in the metatags of their own website will be subject to the same rules applicable for other conventional forms of advertising.
Josette Grech is an associate with Guido de Marco & Associates and heads its European Law division.