The High Court has delivered its judgment in the long running case between Interflora and Marks & Spencer (M&S), an eagerly awaited decision due to the potentially significant impact on the way in which companies use third party trade marks in their advertising.
Google operates an AdWords service, whereby a company can purchase specific keywords which cause that company’s advert to be displayed on the search results page when the purchased keyword is typed into the Google search engine by an internet user. The case turned on whether the M&S advertisement which was displayed when users typed in the word "Interflora" into their search engine was infringing Interflora’s registered trade marks.
M&S purchased the keyword "Interflora" so that on searching for “Interflora”, an advertisement for M&S’ own online flower delivery service would appear in the list of sponsored links at the top of the search results page. Interflora claimed that this infringed its registered trade marks under Section 10(1) Trade Marks Act 1994 which provides that the proprietor of a registered trade mark may prevent third parties from using in the course of trade an identical mark in respect of goods and service which are identical to those for which the mark is registered.
Reference to the Court of Justice of the European Union (CJEU)
M&S denied any infringement and the trial judge, Mr Justice Arnold, referred a number of questions to the CJEU and, in particular, whether the use of a mark as an advertising keyword constituted “use in the course of trade” so as to amount to trade mark infringement. The CJEU held that if the use of keywords could incorrectly lead “reasonably well-informed and observant internet users” to believe that the advertiser was economically linked to the trade mark owner, then this could have an effect on one of the main functions of a trade mark i.e. to distinguish the origin of goods or services and would amount to infringement. The case was then referred back to the UK High Court.
High Court Decision
In applying both the CJEU’s ruling and well-established case law, Arnold J also reviewed a number of issues in order to determine whether a user was likely to be confused as to the origin of the flower delivery service.
One of the points reviewed was whether an internet user's general knowledge of the market was such that they would know that M&S was not part of the Interflora network. The M&S Google adverts themselves were also reviewed to determine whether they informed the user that M&S was not part of the Interflora network.
In his decision, Arnold J held generally users would not be aware that M&S were not in the network and that M&S’ advertisements did not enable internet users to determine whether the flower delivery service originated from Interflora or not. He observed that the nature of the Interflora network made it unusually difficult for a user to determine whether M&S was part of the Interflora network or not, as the network allows members to trade under their own names and, in particular, Interflora already had links with other large retailers.
The conclusion therefore was that M&S' key word use of the registered trade mark "Interflora" in keyword advertising adversely affected the origin function of the marks, and as such infringed the registered trade mark.
Impact of the case
Whilst the outcome has been welcomed by trade mark owners seeking to restrict use of their registered trade marks by their competitors on the Google AdWords service, the case needs some careful consideration, given the particular facts of this case and the nature of the Interflora business model.
Notably, the decision does not constitute an absolute prohibition on the use of a competitor’s registered trade mark in keyword advertising. Each case will turn on its own facts, and infringement will only be found where the averagely observant internet user is confused as to origin.
This case has seen the first attempt to apply the guidelines laid down by the CJEU about the circumstances in which use of Adwords can result in infringement. Given the importance of key word advertising to online businesses, there are likely to be many arguments still to be run about where the line lies between legitimate and infringing use.
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at June 2013. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.
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