Brands Bulletin - September 2011 STOP PRESS Edition

Friday 23rd September 2011

 

Interflora v Marks & Spencer - a blooming good judgment?

Regular readers of this e-publication will recall that there has, over the past year or so, been a number of decisions handed down by the  European Court of Justice ("ECJ") concerning the issue of trade mark infringement, where a third party competitor buys a registered trade mark owner's trade mark as a keyword in respect of Google's AdWord internet referencing service. 

The reason competitors do this is so that when internet users conduct a search, using Google, for the trade mark in question, an advert for their rival product or service will be displayed, rather than one for the trade mark owner's product or service.

Yesterday, the ECJ handed down its judgment in Interflora v Marks & Spencer, a case which concerns the thorny issue of whether or not this sort of activity constitutes registered trade mark infringement.  In this case, when people searching on Google for Interflora's flower delivery service typed in the word INTERFLORA they were presented with an advertisement promoting Marks & Spencer's rival flowery delivery service.  Unsurprisingly, Interflora objected to this and issued proceedings in the English High Court.  The judge hearing the case decided to refer certain points of law to the ECJ, as he felt the law was not clear.

The ECJ's judgment is long and detailed.  In summary, the most crucial points are as follows:

• Each case will turn on its individual facts.  In some cases the displaying of an advert, in response to a keyword which is identical with a registered trade mark, will constitute infringement.  In others, it will not;
  
  
• Where an advert displayed does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services concerned by the advert originate from the trade mark owner or an undertaking linked to that owner or, on the contrary, originate from an independent third party, then this will constitute infringement;
  
  
• Trade marks have an "investment" function (namely, it may be used to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty).  If the investment function is affected then this can constitute trade mark infringement.  This will happen where a third party's use of a sign identical with a trade mark in relation to goods or services identical to those for which the mark is registered "substantially interferes" with the owner's use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty.  The fact that a third party's use may prompt some consumers to switch from goods or services bearing the trade mark does not suffice for this purpose.  Nor is it if the only consequence of the use is to oblige the trade mark owner to adapt its efforts to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty;
  
  
• The selection as internet keywords of signs corresponding to trade marks with a "reputation" and which belong to other persons can, in the absence of any "due cause", be construed as a use whereby the advertiser rides on the coat-tails of the trade mark with a reputation in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of its own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark.  If that is the case, the advantage thus obtained by the third party must be considered to be unfair and can be trade mark infringement.  This is particularly likely to be the conclusion in cases in which internet advertisers offer for sale, by means of the selection of keywords corresponding to trade marks with a reputation, goods which are imitations of the goods of the proprietor of those marks; and
  
  
• By contrast, where the advertisement displayed on the internet on the basis of a keyword corresponding to a trade mark with a reputation puts forward – without offering a mere imitation of the goods or services of the proprietor of that trade mark – an alternative to the goods or services of the owner of the trade mark with a reputation, such use is not without "due cause" and thus does not constitute trade mark infringement.  
  

In conclusion, the ECJ is saying that it is very important that advertisers make it clear in their adverts which appear when a trade mark is typed into Google as a keyword that the products/services highlighted by the adverts do not originate from the trade mark owner or an economically linked undertaking.  Further, if they are promoting genuine (non imitation) alternatives to the goods or services of the owner of the trade mark with a reputation, such use will not constitute trade mark infringement.  However, whether Marks & Spencer's use qualifies under either of these exemptions is a question that the English High Court will now have to decide. 

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IAshfords LLP is regulated by the Solicitors Regulation Authority. The information in this note is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice or as an alternative to taking professional advice relating to specific circumstances. Links to other sites and resources provided by third parties are included for your information only. We have no control over the content and accept no responsibility for them.