In a much anticipated decision, the High Court has recently ruled that M&S had infringed Interflora’s registered trade marks by its use of advertising keywords for “Interflora” that produced Google search results for M&S’s flower delivery services.
Background (and a re-cap on AdWords!)
Google operates the best known internet search engine in the UK. Its principal source of income is advertising which is by means of a service Google calls AdWords. Companies pay Google to display advertisements for their goods or services on the search engine results page when an internet user uses Google’s search engine to search for certain specified keywords.
In May 2008, Google changed its policy in the UK and ceased blocking keywords registered as trade marks. The effect was that third parties were then free to bid for keywords registered as trade marks without restriction. This included the ability to bid on a competitor trade mark as a keyword.
In this case, there was evidence that less than three hours after Google changed its policy, an individual in M&S’s online marketing department sent an email saying “we are reading this thinking how we can nick traffic from the opposition cheaply, admit it. (Interflora, Interflora!)”.
M&S paid to display advertisements for its flower delivery service on the results page when a user searched for “Interflora”. Interflora contended that this amounted to trade mark infringement and sued M&S in the High Court, which referred the case to the Court of Justice of the EU (CJEU) in 2009. The CJEU provided guidance in 2011 and the High Court heard the case again in April 2013.
In his decision, Mr Justice Arnold stated that keyword advertising is not inherently or inevitably objectionable from a trade mark perspective. The question, however, was whether, on the specific facts of the case, M&S had infringed Interflora’s trade marks.
Mr Justice Arnold concluded that the M&S advertisement did not enable reasonably well-informed and reasonably attentive internet users, or enabled them only with difficulty, to ascertain whether the service referred to in the advertisements originated from the proprietor of the trade marks or from a third party. He stated that a significant proportion of the consumers who searched for “Interflora” that then clicked on M&S’s advertisements displayed in response to those searches, were led to believe, incorrectly, that M&S’s flower delivery service was part of the Interflora network. As a result, M&S had infringed Interflora’s trade marks.
This decision is a positive and important one for brand owners. It clearly establishes that the use of advertising keywords can amount to trade mark infringement but represents an evolution, rather than revolution, of the law relating to AdWords. It is important to note, however, that this decision does not mean that brand owners can always prevent competitors or third parties using their trade marks as advertising keywords. As the CJEU made clear, the nature of the Interflora network was particularly important in this case. The nature of the network made it particularly difficult for reasonably well-informed and observant internet users to determine whether M&S’s service was part of the network or not as it is a feature of the Interflora network that members often trade under their own names and Interflora had commercial tie-ups with several large retailers. In the future, where there is a risk of confusion on the part of the average internet user then brand owners are likely to be in a strong position.
What is very clear about this decision is that future cases relating to the purchase of a keyword containing a third party’s Trade Mark will be decided on the facts.
This case was decided on the circumstances. Because of how Interflora’s network works, it was not implausible that M&S may have been part of the same network. This was compounded by the fact that M&S had not made it clear to the consumer that they were not part of the Interflora network. This would indicate that M&S had made it clear on their website that they were not part of the Interflora network but had still used their Trade Mark as a keyword, they would not have been held to infringe Interflora’s rights.