25 June 2013 #Dispute Resolution
A recent High Court decision ruled on whether Marks and Spencer had infringed trademarks belonging to Interflora through its use of keyword advertising (Interflora Inc and another v Marks & Spencer plc and another  EWHC 1291 (Ch)).
The Google AdWords service allows businesses to purchase keywords, known as “AdWords”. When an internet user searches for the keyword on Google, the purchaser’s sponsored advertising link will appear at the top of the page in a pale yellow box, above the other natural search results. The purchaser pays a fee to Google for every user who clicks on the sponsored link.
In around 2008, M&S wanted to promote its online flower delivery service and purchased several keywords containing the word “Interflora” and variations of it. Interflora, which owns both UK and Community trade marks in the word “Interflora”, is the largest online flower delivery provider in the market and therefore M&S’s main competitor for this area of business.
The case has been a long running one. Interflora brought proceedings against M&S for trade mark infringement in 2009, but the case was adjourned by the High Court so that it could be referred to the European Court of Justice for clarification on certain issues. Following the ECJ’s ruling in 2011, the case was sent back to the High Court and judgment was finally handed down in May.
The High Court dismissed various of Interflora’s complaints, including that the advertisements had an adverse effect on the reputation of Interflora, that the advertisements caused a dilution or tarnishment of the trade marks, and that M&S had taken unfair advantage of the trade mark’s distinctive character. However, Interflora succeeded in its claim that the M&S sponsored advertisements constituted an infringement of Article 5(1)(a) of the Trade Marks Directive, which provides that a trade mark owner has the right to prevent third parties from using his trade mark in relation to goods and services that are identical to those for which the trademark is registered.
The Court confirmed that keyword advertising of this kind did not in itself constitute trade mark infringement. As a general rule, this type of advertising is permitted and promotes healthy competition. However, the Court found that a reasonably well-informed and attentive internet user, who typed “Interflora” into the search engine, would not have been able to ascertain from the search results, including the M&S advertisements, whether the M&S service referred to was being provided by Interflora (or a company associated with it), or by an unconnected third party. The evidence was that many internet users in the UK do not understand the difference between natural search results and paid advertisements. This is compounded by the fact that Interflora is a company which has many partner organisations and retailers who operate under their own brand names as part of the Interflora network. In view of this, there was a particular risk that consumers who clicked on the advertisements would not understand that M&S was not a part of the Interflora network.
The fact specific nature of the case means that it will be difficult for other trade mark proprietors to rely on it to challenge their competitors who use keyword advertising in this way. Nevertheless trade mark owners would be advised to regularly monitor the use of their trade marks in Google searches, and to seek advice on whether there may be any grounds for bringing an action against their competitors.