WELCOME TO CHARLES RUSSELL SPEECHLYS.
We would like to place strictly necessary cookies and performance cookies on your computer to improve our website service.
Otherwise, we'll assume you are OK to continue. Please close this message
On 21 May 2013, Interflora obtained judgment in the High Court in London against Marks & Spencer (“M&S”) for use of Interflora’s registered trade marks as a Google AdWord.
In essence the judgment says that M&S infringed Interflora’s trade marks because, having purchased from Google certain keywords containing “interflora”, in its advertisements which came up on a Google search using those keywords, M&S failed to make clear to internet users that the M&S flower delivery service had no connection with Interflora. A significant proportion of internet users were led to believe that M&S’s flower delivery service was part of the Interflora network.
A further hearing on the level of damages payable by M&S will take place. This may not be the end of this long running dispute between the parties; M&S may well decide to appeal the decision.
The effect of the ruling is that, if a third party’s trade mark is used as an AdWord, the advertisement must make clear that it does not originate from (nor is it economically connected with) the trade mark owner, and the onus is on the advertiser to do this. How this will work in practice remains to be seen.
It should be noted that the judgement does not prevent the use of third parties’ trade marks as Google AdWords in the UK (and, since M&S did not attempt to defend the claim by contending that its advertisements were comparative advertising, does not deal with the issue of trade mark use in comparative advertising, whether on the internet or otherwise).
The issue of the use of trade marks as keywords still varies considerably between jurisdictions, even within the European Union.
The claimants, Interflora Inc and Interflora British Unit (together “Interflora”), operate the well known online flower delivery service which enables orders for flowers to be placed over the Internet.
Interflora Inc. is the registered proprietor of two registered trade marks:
The defendant, “M&S”, operates an online flower delivery service through the M&S website.
Google operates the well-known internet search engine google.co.uk, one of the most popular websites in the UK. Google’s main source of revenue is from advertising and the principal way in which Google provides advertising is via its AdWords service. This works as follows:
It is also worth noting the following factors, mentioned in the judgment, which can also affect both the positioning of advertisements with Google AdWords and how users are influenced by advertisements:
M&S purchased from Google several AdWords containing the name “interflora”. This meant that advertisements for M&S’s flower delivery service would be displayed on the SERP whenever an internet user entered the search term “interflora” (or similar terms) on the Google search engine.
Prior to May 2008, Google would block a keyword from being purchased as an AdWord by a third party if the trade mark owner notified Google that the keyword had been registered as a trade mark. On 5 May 2008, Google changed its policy for the UK and Ireland and ceased to block keywords registered as trade marks.
On 6 May 2008, M&S started bidding on “interflora” and other keywords relating to “interflora” - this had the effect of triggering the display of advertisements for M&S’s Flowers Online service on the SERP. Notably, the advertising text in the M&S advertisement did not incorporate or reference the Trade Marks - there was no reference to Interflora.
In January 2012, Interflora implemented a “golden box” brand defence strategy - ensuring that all Interflora related sites appeared in the shaded box and ensuring that M&S’s advertisements were excluded. This meant that Interflora incurred additional bidding costs payable to Google, but as a result M&S’s share of internet traffic declined.
In 2008, Interflora brought proceedings against M&S alleging infringement of the Trade Marks under Article 5(1)(a) and Article 5(2) of the Trade Mark Directive1. Article 5(1)(a) of the Trade Marks Directive (89/104/EC) confers on a trade mark proprietor the right to prevent third parties using (without consent) in the course of trade “any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered”.
Article 5(2) provides that a proprietor may prevent all third parties not having his consent from using in the course of trade “any sign which is identical with or similar to the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark”.
There was no dispute between the parties concerning the validity of the Trade Marks nor did M&S dispute that Interflora had acquired a substantial reputation in the UK and elsewhere in the European Union in relation to flower delivery and the operation of a flower delivery network.
Case law of the Court of Justice of the European Union (“CJEU”) has established that a trade mark proprietor can only succeed in a claim under Article 5(1)(a) of the Directive if six conditions are satisfied:
By the time of the trial, there was no dispute as to the first five conditions and it was common ground between Interflora and M&S that the signs used by M&S were identical to the Trade Marks.
The sixth condition is satisfied if the use of the sign affects or is liable to affect one of the functions of the trade mark, the functions being:
following Case C-487/07 L’Oréal SA v Bellure NV  ECR I-5185 at -.
The Judge, Mr Justice Arnold, concluded that, as at the relevant date of 6 May 2008:
The judge made the following points of note in his judgment:
This ruling does not mean the end of services offering cost per click advertising. Although Google no longer operates a trade mark complaints procedure in the UK by which trade mark owners can apply to block their trade marks being chosen as keywords, other search engines, such as Microsoft’s Bing and Yahoo!, do offer such services. Thus the decision will not be of current practical relevance to all search engines.
There were several points of law that were not raised by M&S, in particular the issue of comparative advertising that could have an impact on any future case.
The overall “take” is that there is nothing in the judgment that appears detrimental to the interests of trade mark owners wishing to protect their rights, and the judgment certainly does not give a blanket right to third parties to use another’s trade mark as a keyword. Nor does it prohibit the use of trade marks as keywords.
Rather the judgment indicates that if a third party’s trade mark is used as a key word, any content appearing on the screen of the person conducting the search (other than the natural results of that search) must make it clear that such content does not originate from (or is not economically connected with) the trade mark owner.
This will have marketeers scratching their heads before any purchase, trying to ensure that there could be no implication of connection. For some brands, with obvious public rivalry like Coca Cola and Pepsi, the argument may be harder to run simply because they are so publicly not connected.
For more borderline cases, the choice of advertising text becomes key, especially balancing the desire for snappy creative with the need to make clear there is no connection. How this will work in practice remains to be seen. Interesting times may still be ahead!
It is clear that the use of keywords in advertising on the internet should be properly controlled – and any policy in this respect carefully reviewed and adhered to. This is particularly the case where it may be expected that the advertisements shown as a result of the use of keywords will be seen in more than one jurisdiction.
For more information please contact Ian Wood, Partner
T: +44 (0)20 7203 5124