The ECJ has delivered its judgment in the long awaited “keyword” advertising case Interflora v Marks & Spencer plc (M&S)1, on a reference from the English High Court made in June 2010.

Background

Interflora, the flower delivery network, objected to M&S buying the word “Interflora” as a Google Adword so that M&S’ flower delivery site would show up prominently in the sponsored links when a user searched for the term “Interflora”. Interflora sued in the English High Court for trade mark infringement. Several questions were referred to the ECJ.

The ECJ followed its approach in previous cases and held that M&S’ selection of the “Interflora” keyword was “use” of Interflora’s trade mark, but such use could only be restricted if the use has an adverse effect on one of the “functions” of a trade mark.

The key function of a trade mark is as a guarantee of origin, but the ECJ confirmed there are other functions – significantly as an “instrument of commercial strategy used to acquire reputation to develop customer loyalty” (termed the “investment function”).

Guarantee of origin

So far as the “guarantee of origin” function is concerned, there will be an infringement if the keyword advertisement “does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the advertisement originate from the proprietor of the trade mark or an undertaking economically connected to it”.

On the facts of this case, this means that Interflora’s trade mark will be infringed if the English High Court considers that “the display of M&S’ keyword may lead users to believe that the flower-delivery service offered by M&S is part of Interflora’s commercial network” . The ECJ followed in the path laid by the Advocate General by suggesting that, because the Interflora business model depends on the recognition the Interflora brand brings to a network of independent florists, there is a higher risk of infringement on these facts than might arise in most other keyword disputes.

Investment function

So far as the “investment function” is concerned, there will be an infringement if the keyword advertisement “substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty.”

On the facts of this case, this means that Interflora’s trade mark will be infringed if the English High Court considers that “the display of M&S’ keyword jeopardises the maintenance by Interflora of a reputation capable of attracting customers and retaining their loyalty”.

Marks with reputation

Finally, the ECJ stated that the use of keywords is capable of constituting an infringement under Article 9(1)(c) of the Community Trade Mark Regulation (and analogous national provisions in respect of national trade marks) if such use amounts to “riding on the coat-tails of a trade mark with a reputation in order to benefits from its power of attraction…without paying financial compensation”.