Liability of affiliate programme operator for metatags of affiliates

The operation of an affiliate programme for one's own Internet offering obligates one to contractually ensure that the advertising partner (affiliate) does not use the names of competitors in metatags. In the event of complaints, a mere request to the advertising partner to confirm that the trademark infringement has been discontinued is insufficient to avoid the operator's own liability as an intermediary (Störerhaftung).

The plaintiff operates a mail-order business for cycling articles, which it also advertises on the Internet under its own domain. It is the proprietor of several trademarks containing the word "rose" for cycling articles and clothing. The defendant is a competitor. It uses an affiliate programme to promote its offering. Registered advertising partners receive a commission for every sale that comes about as a result of the customer reaching the defendant via a link on their Internet page and making a purchase there.

For a period of time, the Internet page of an advertising partner of the defendant appeared in Google search results at position 8 (out of 1.5 million search hits) when searching for "rose" and "bike".

The court's decision

In the opinion of the Regional Court (LG) Cologne (judgment of 06.10.2005 – 31 O 8/05), there is a presumption that this good search engine ranking is attributable to the use of corresponding meta-tags, since it cannot otherwise be explained. The defendant did not provide evidence to the contrary.

In accordance with the now seemingly general view that the use of third-party trademarks in metatags can constitute trademark infringement, the court therefore assumed a trademark infringement to exist. Exceptions would be conceivable if the appearance of the page ruled out the possibility that the use of the third-party trademark would be understood as an indication of origin. However, such a situation was not found to exist in the present case. In particular, the title used "fahrrad rose bike wear" spoke against this.

The defendant's liability (so-called liability as an intermediary – Störerhaftung) for this trademark-infringing use of the trademark by its advertising partner thus arises, in the court's view, from the fact that the defendant delegated its advertising through the affiliate programme to the advertising partner and, by holding out the prospect of commissions, induced the latter to generate as much traffic as possible to its Internet offering. In doing so, it had co-caused the trademark infringement and was accordingly liable for the metatags of the advertising partner.

The court did not consider the request made to the advertising partner via email after the trademark infringements became known, asking it to send a confirmation to the effect that the legal violations had been discontinued, to be a sufficient control measure. Rather, there would have been a need for an express contractual prohibition of the mention of competitors of the operator of the affiliate programme – which could be listed given their manageable number – together with monitoring of the advertising partners' compliance with such prohibition.

Conclusion

Following publication of this judgment, there was presumably an audible murmur through the ranks of operators of their own and intermediaries of other affiliate programmes. In fact, should it stand – it has far-reaching consequences for one of the fundamental and important distribution forms on the Internet. It would in any case be scarcely possible and practicable to review not only the contractual obligation – possibly sanctioned with a contractual penalty – but also the design of each and every individual HTML page, including source code, of affiliates for their trademark and competition law compliance.

In particular, the court's reasoning that the relationship between programme operator and its affiliates should be compared with that between an enterprise and an advertising agency, in which liability for the latter is readily affirmed, can scarcely be convincing. Properly considered, the comparison should be based on the relationship between the enterprise (programme operator) and the bill-posters (advertising partners). However, the liability for bill-posting at a location infringing rights is extremely questionable.

It thus remains to be hoped that in the appeal against this judgment there will be at least a significant restriction of this far too extensive liability.