New decision on keywords reaffirms trademark infringement

In a split decision issued in December 2024, the Supreme Court overturned the judgment issued by Division III of the Federal Court of Appeals in the case “Organización Veraz S.A. c/ Open Discovery S.A. s/ Cese de uso de marca”. In such judgement it had been ruled that the use of  a well-known trademark as a keyword in Google's Adwords system -with the purpose of taking advantage of the prestige and renown of the trademark and its owner and positioning in the market- constituted trademark infringement and an act of unfair competition.

Therefore, the highest court ordered the issuance of a new ruling according to the following guidelines:

• The use of a well-known trademark as a keyword in Google's sponsored links advertising system does not constitute per se trademark infringement or an act of unfair competition.
• For such practice to be considered trademark infringement or an act of unfair competition, it must undermine the distinctiveness of the trademark by generating probable confusion in the consumer.
• It is not enough to claim an advantage of the third party’s prestige; such advantage must also be improper or illegitimate.
• If the advertisement -the result of the sponsored link- is recognized by consumers as an alternative offer to the products or services of the trademark owner, it does not constitute trademark infringement or act of unfair competition.

On June 3, 2025, Division I of the Federal Court of Appeals issued a new ruling in accordance with the guidelines established by the highest court. After examining in detail the arguments made by the Supreme Court and the Attorney General, it ruled that the defendant’s use constitutes trademark infringement and an act of unfair competition for the following reasons:

• The essence of the contracted service -associating or linking the defendant’s website with the well-known trademark used as a keyword- was what motivated the contracting of Google’s sponsored links service.
• The sponsored link lacks elements that indicate to the internet user the alternative nature of the search result. Likewise, when entering the defendant’s website -which appears as the first search result- there are no elements that, at first sight, allow identifying that said site does not belong to the trademark owner.
• The parties provide commercial report services, which increases the risk and likelihood of confusion. In such circumstances, the unauthorized use of a well-known trademark as a keyword implies taking advantage of the positioning and outreach achieved by the owner of the registered trademark and represents an undermining of its individualizing function.
• The defendant used the plaintiff’s trademark and name as a keyword without authorization, as a strategy to position itself in the same commercial field and take advantage of another’s prestige and effort.
• The defendant obtained an economic benefit by parasitizing the prestige of a competitor.

In short, applying the guidelines established by the Supreme Court, Division I reached the same conclusion previously reached by Division III: the use, by a competitor, of a well-known trademark as a keyword in Google’s sponsored link service constitutes trademark infringement and an act of unfair competition, when it is proved that such use may create confusion among consumers and entails an illegitimate advantage of the recognition and positioning achieved by the trademark owner.