United Kingdom: Interflora v Marks & Spencer: the keyword clash continues

Contributed by Reynolds Porter Chamberlain LLP

Advocate General Jääskinen has delivered his opinion on the questions referred to the European Court of Justice (ECJ) by the English High Court in Interflora, Inc v Marks & Spencer plc. In his view, use by Marks & Spencer of 'Interflora' (and variations) as a Google AdWord infringed Interflora, Inc's trademark rights. If his opinion is followed by the ECJ (as seems likely), it will reconfirm that use of third-party marks as keywords cannot in itself constitute trademark infringement, unless it has some adverse effect on the functions of the trademark. The ECJ's ruling is expected later this year.

Facts

Interflora operates under the UK and Community trademarks INTERFLORA. UK retailer Marks & Spencer provides, among other things, a flower delivery service. Marks & Spencer used Google's AdWord internet search engine service to purchase the keyword INTERFLORA and close variations thereof, so that when a Google user searched for INTERFLORA, a link to Marks & Spencers' flower delivery service was shown as a sponsored link, above the 'natural' search results. Interflora alleged that this practice infringed its trademarks and brought proceedings against Marks & Spencer (and a second defendant, Flowers Direct Online Limited, which has since settled with Interflora) in the High Court. The court referred four questions to the ECJ (for further details please see "Unlocking keyword disputes?").

Opinion

The advocate general held as follows:

• A sign identical to a trademark is used "in relation to goods or services" when it has been selected as a search engine keyword without the consent of the trademark proprietor and the display of adverts is organised on the basis of the keyword. Trademark owners may prohibit use if an average internet user cannot readily ascertain whether the goods or services referred to in the advert originate from the trademark owner or an undertaking economically connected to it (a licensee), or from a third party. If the competitor's sponsored link would lead some members of the public to believe that the competitor is a member of the trademark owner's commercial network when it is not, infringement exists.(1)
• Trademark owners may prohibit use of a sign as a search engine keyword in relation to goods or services identical to those covered by an identical trademark with a reputation(2) when:
• adverts are found by internet users following a search using a trademark with a reputation as a search engine keyword and these adverts mention or display that trademark; and
• either the trademark is used as a generic term covering a class or category of goods or services, or the advertiser attempts to benefit from its power of attraction, its reputation or its prestige and to exploit the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark.
• The fact that the internet search engine operator does not permit trademark owners in the relevant geographical area to block the selection of signs identical to their trademarks as keywords by other parties is immaterial to the advertiser's liability.

The advocate general observed that the purchase and use of keywords could amount to infringing use under Article 5(1)(a). He further suggested that such use infringes trademark rights if it is not sufficiently clear from the sponsored link that the goods or services do not originate from the trademark owner. If Marks & Spencer's sponsored link had included the trademark INTERFLORA in its text, which it did not, then he considered that Marks & Spencer would be liable and that EU law on comparative advertising would need to be followed.

In the advocate general's opinion, the INTERFLORA trademark has achieved a secondary meaning, signifying a commercial network of florists delivering flowers according to a set procedure. It bears some similarity to a collective mark. He went on to say that for this reason, the INTERFLORA trademark had a certain reputation among consumers. Where Marks & Spencer fell down, in his opinion, was that there was likely to be confusion among consumers searching using the keyword INTERFLORA; consumers may view the Marks & Spencer sponsored link in the belief that Marks & Spencer was part of or associated with Interflora's commercial network of florists. The essential origin function of the INTERFLORA trademark would be adversely affected and use by Marks & Spencer would constitute trademark infringement.

Comment

It appears that should the ECJ agree with the advocate general's view on the existence of a likelihood of confusion, this will undoubtedly be a big win for Interflora. However, such a decision is unlikely to impact on the majority of online advertising using keywords, which do not involve trademark owners that are part of commercial networks similar to Interflora. Advertisers seeking to use third-party trademarks or variations thereof as keywords for online searches will generally welcome this opinion. At the same time, advertisers should bear in mind that if challenged, a court might find against them where there is any ambiguity over the origin of its advertised goods or services. If the ECJ follows the advocate general's position on comparative advertising, Marks & Spencer would do well to make it clear that it is offering an alternative service so that the EU Comparative Advertising Directive applies.(3) However, following the opinion and pending a decision from the ECJ, the advice must be not to include third-party trademarks in the text of sponsored links.

For further information on this topic please contact Andrew Hobson or Tom Cadwaladr at Reynolds Porter Chamberlain LLP by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email (andrew.hobson@rpc.co.uk or tom.cadwaladr@rpc.co.uk).

Endnotes

(1) Article 5(1)(a) of the EU directive governing national trademarks and Article 9(1)(a) of the EU regulation governing Community trademarks.

(2) Article 5(2) of the directive and Article 9(1)(c) of the regulation.

(3) See O2 Holdings Ltd v Hutchison 3G [2006] EWHC 2571 and L'Oreal SA v Bellure NV Case C-487/07