We have previously reported on the ongoing dispute between the internet florist Interflora and the leading UK retailer Marks & Spencer. The dispute concerns Marks & Spencer's activity of bidding on the "Interflora" name as a "keyword" in order for its own florist services advertisements to appear as a higher ranked "Sponsored Link/AdWord" in internet search engine results. "Interflora" is a registered trade mark in the UK, and Interflora has sued Marks & Spencer in the UK Courts for trade mark infringement.

In the first instance High Court proceedings, the judge (Arnold J) held that Marks & Spencer's bidding activity was an infringement of Interflora's UK trade mark registration. However, as we previously mentioned, it is felt that this decision was reached primarily due to the particular business model that Interflora adopts (and that the decision might not, therefore, necessarily extend to key word bidding activity where different business models are utilised).

Marks & Spencer successfully appealed. The UK Court of Appeal has, somewhat unusually, ordered a re-trial of the issue in the High Court. In essence, the Court of Appeal considered that Arnold J made errors in his initial findings, and the Appeal judges could not be certain that the same outcome would be achieved had those errors not occurred. It ordered the re-trial, because the Appeal judges did not feel confident that they could decide the issues properly, having not heard/seen all of the original evidence.

As mentioned previously, this issue largely centres on whether the "average consumer" (who is deemed to be reasonably well informed, and reasonably observant and circumspect), upon seeing Marks & Spencer's advertisement, is unable to ascertain (or is only able to do so with difficulty) whether the goods/services advertised originate from Interflora, or some undertaking that is economically linked to Interflora. This is not to be determined as some form of statistical/research test, and the Court of Appeal emphasised that the Court should exercise its judgement in accordance with reasonable principles of proportionality.

The Court of Appeal stated that Arnold J was wrong to decide that the onus was on Marks & Spencer to establish that its advertisements did not cause this confusion as to the origin of the goods/services being advertised. On the contrary, the Appeal judges determined that the onus is on the registered trade mark owner to show that the advertisements did cause confusion. This was one of the main reasons that the Court of Appeal felt that Arnold J might have come to a different conclusion had he not considered the matter in this way.

The Court of Appeal also determined that Arnold J was wrong to import and apply the doctrine of "initial interest confusion" into EU trade mark law to these particular facts. The doctrine of "initial interest confusion" (which originated in US trade mark law) arises when a consumer may be confused as to the origin of goods/services prior to the purchase of those goods/services (in particular when the sign is used in promotional materials), but is not confused when the purchase occurs or afterwards. The Court of Appeal said that the issue is whether the advertiser has enabled the average consumer to determine the origin of the advertised goods/services in order to make an informed decision at purchase.

The Court of Appeal additionally found that there were certain irregularities concerning some of the evidence that was admitted in the High Court proceedings.

Conclusion

This battle between Interflora and Marks & Spencer has been ongoing for some 6 years, and now would appear to have gone back to square one. It remains to be seen whether the re-trial will be as straightforward as the Court of Appeal considers it should be, as there may yet be further thorny issues to be resolved.