Russian Court Decision: Using trademarks as advertising keywords can now constitute IP infringement

business-dreyfus-8-150x150January 14th, 2014− A recent Russian Court decision, Eldorado v Ulmart, found that the use of a trademark’s keywords in advertising can constitute intellectual property infringement and specifically, trademark infringement. This marks a departure to the current global consensus on this issue, as most jurisdictions have refrained from providing any clear legal insight.

The facts of the Eldorado case are as follows: Eldorado sued its competitor Ulmart for trademark infringement. Eldorado is a major Russian electronics retailer and an exclusive licensee of a number of Russian trademarks, including “Eldorado” and “Territory of low prices”. The suit concerned Ulmart’s purchasing and utilization of these keywords from third party search engine, Yandex: “Eldorado of low prices. Here!” “Ulmart: territory of service. Shops, delivery, fair prices, bonuses!”

Evidence presented in the Commercial (Arbitrazh) court of Saint Petersburg and Lennigrand region, suggested that when users typed “Eldorado” into Yandex, that potentially the first three sponsored links were affliated to Ulmart. That being said, the first link contained the keywords, “Eldorado of low prices. Here!” Upon activating the link, users would be transferred to, the defendant’s website.

In agreement with the plaintiff, the court decided that the use of “Eldorado” with “low prices” increased a brand association between the plaintiff and defendant and that such use on the part of Ulmart risked confusion within the public. Additionally, the court noted that the words “Eldorado” and “low prices” appeared in a bigger font than the other textual elements of the advertisement. In drawing attention to these words through an increased font size, trademark affiliation and ultimately confusion with Eldorado seemed even more probable. This also contributed in favor of the plaintiff’s case.

Conversely, Ulmart argued that there could be no confusion between the two websites and that there was no visible link to the name “Eldorado”. Ulmart also put forth the argument that Eldorado was a generic word, which did not deserve protection. The court was not persuaded by either argument and ultimately dismissed both.

The Commercial (Arbitrazh) court of Saint Petersburg and Lenningrand region’s first decision was subsequently supported by the 13th court of appeal, on May 8th, 2014. Although Ulmart claimed that the use of the word “Eldorado” was purely descriptive and too broad of a term, meaning “land rich with gold and other resources” in Russian, the court could not separate the use of the term from the trademark itself and therefore rejected the defendant’s appeal. Ulmart also expressed disagreement to the amount of damages claimed but again, the 13th court of appeal reiterated the court’s decision at first instance. Finally, the appeal court confirmed that so long as a trademark is protected, the owner or exclusive licensee can enforce its rights against third parties.

Here are some preliminary observations that can be noted. Reflected within the decisions of both courts, the use of a protected trademark as a keyword and in the text of a sponsored search result equates to trademark use. Eldorado did not sue Yandex, the third party search engine. The use of a mark or confusingly similar sign in advertising in respect of similar goods is also recognized by Russian law as trademark use. Russian law accounts for “internet use” so the use of a mark in a keyword could fall within “internet use”. The way in which the trademark is used in an advertisement plays a crucial role to the ultimate judicial outcome. The court noted that had the trademarks “Eldorado” and “lower prices” not been placed in the text, the outcome of the case could have been different.

The Eldorado case marks the first of what will predictably be many cases to follow in Russian law that deals with keywords and trademark. In the future, it is still unclear as to whether or not claims will be brought onto advertisers alone, or to advertisers and search engines alike. Similarly, the court did not condemn the keyword practice per se, but only that the use of a trademark as a keyword constituted trademark infringement.