German Federal Supreme Court shows red card to Amazon for misleading advertising – Landmark decision for brand owners at the German Federal Supreme Court
The highest German court for civil cases dismissed an appeal on the points of law by online trader Amazon with a decision that could have effects on the entire area of search engine advertising. The market leader in German eCommerce had run AdWords adverts on the search engine Google using the Ortlieb trademark in order to attract potential customers towards products of various manufacturers on its own platform. Ortlieb – which is a medium-sized sports equipment manufacturer from the Nuremburg area and well-known for its waterproof bicycle bags – successfully proceeded against this abuse of its trademark.
In the specific case, which was now heard at the German Federal Supreme Court (docket no. I ZR 29/18), Amazon had run adverts on Google using and showing keywords like “Ortlieb Fahrradtasche“ [Ortlieb bicycle bag] or “Ortlieb Outlet“. However, the advertising was linked to mixed lists of offers on Amazon.de, which did not only show Ortlieb products, but also products of other manufacturers, without pointing this out specifically. According to the German Federal Supreme Court, this is misleading: If an advert contains the keyword Ortlieb the customer would expect to find Ortlieb products and not an overview of offers from different manufacturers.
Medium-sized company obtains successful decision against Amazon
The decision by the German Federal Supreme Court on Amazon’s Google advertising is an important success for Ortlieb as a first dispute regarding Amazon’s internal result lists had not been successful. Dr. Andreas Lubberger of the law firm Lubberger Lehment, who represented Ortlieb in the Federal Supreme Court hearing, comments this as follows: “I congratulate my partner Martin Fiebig on the success of his case. It is difficult, however, to understand how the Federal Supreme Court had rendered contradictive judgments in Ortlieb I and Ortlieb II which we had seen as parallel matters.” Partners Lubberger and Fiebig share the conviction that “in each case a trademark is used as a search term, the “pilot-function” of the mark should steer the results; not only in the case of Google’s misleading AdWords links.”
Ortlieb intentionally does not distribute products to Amazon and authorized Ortlieb dealers are not allowed to sell the products to Amazon. Instead, the manufacturer located in Heilsbronn, Franconia, uses a selective distribution system through expert dealers which can provide individual advice to the customers. “We deliver high-quality products and want to provide long-time consumer satisfaction to our customers. This does not go together with the trading model of market places like Amazon”, explains Martin Esslinger, head of distribution at Ortlieb.
“This is about the future of our company, our business model and of our employees and we are very glad that we were able to obtain this successful decision this time“, says Mr. Esslinger. Previously, Ortlieb had won the first instance proceedings at the Munich District Court (Landgericht – docket no. 17 HK O 22589/15) and the appeal proceedings at the Munich Court of Appeals (Oberlandesgericht – docket no. 29 U 486/17). In earlier proceedings regarding the result lists of the Amazon search engine the German Federal Supreme Court took the stand that consumers would not expect to only be presented products of the specific brand they were searching for (Decision German Federal Supreme Court of 15 February 2018, docket no. I ZR 138/16).
Protecting their own brand remains an essential challenge for companies
The continuous increase of online advertising illustrates the importance of brand protection on the internet for companies. According to a forecast of Emarketer, a market research subsidiary of the Axel Springer publishing house, in 2019 companies will globally considerably increase their expenses for online advertising again – for the first time every second dollar will be invested in digital advertising.
The law firm Lubberger Lehment, which has offices in Berlin, Hamburg and Munich, regularly deals with proceedings on the protection of brands in platform trade and all aspects of selective distribution. Only recently, in June 2019, it obtained a decision against Amazon regarding the burden of evidence with respect to gray market imports at the Court of Appeals Berlin (Kammergericht – docket no. 5 U 1/18).