Returning to a case which we first reported back in March of 2011 (concerning an Advocate General's opinion) and again in September of the same year (that time relating to a preliminary ruling of the Court of Justice of the European Union), we provide our readers with a further update, here regarding the decision of the High Court of England and Wales in the now famous litigation between Interflora and Marks & Spencer (M&S).

Background

To recap, Interflora sued M&S for trade mark infringement on the basis that M&S' selection of the term INTERFLORA as a Google AdWord was liable to create confusion amongst Internet users. Interflora argued that this was so, as such users might find it difficult to determine whether the goods/services displayed in the M&S 'advert' originated from the proprietor of the trade mark (Interflora) or from a third party (M&S).

For those who may be less familiar with the intricacies of Google's AdWords facility, Google allows parties to bid on certain keywords or terms which, when entered into Google's search engine by a user, provide that user with a list of results including a sponsored link to the successful bidder's website and some brief wording (constituting the 'advert'). These sponsored links appear at the top of the page and therefore have a preferable position.

Turning to the decision of the High Court of England and Wales (handed down on 21 May 2013), Mr Justice Arnold determined that M&S' use of the term INTERFLORA did infringe Interflora's trade mark rights and he provided particularly detailed reasons for his decision.

First, it was acknowledged that in order to infringe a proprietor's trade mark rights, use of the mark by a third party must offend one or more of the functions of a trade mark which, principally, include the function of indicating origin (at its most basic level, allowing the relevant user to determine who provides the goods/services).

In order to determine whether the function of indicating origin had been offended by M&S' selection and use of the INTERFLORA mark, Arnold J determined that a number of factors needed to be considered:

  1. Whether the relevant user is deemed to be aware (on the basis of their own general knowledge of the market) that M&S is separate from (and in competition with) Interflora's network;
  2. Whether M&S' 'adverts' enable the relevant user to tell that they are not part of Interflora's network (the onus being on M&S to ensure that the user can distinguish between the two undertakings); and
  3. The nature of Interflora's commercial network.

Reminding the parties that 'initial interest' confusion is sufficient for the purposes of assessing confusion as part of a successful trade mark infringement action, Arnold J held that, in relation to point one above, he was not satisfied that it was generally known to the 'reasonably well-informed user' (either at the time of the initial infringement in 2008 or even now) that M&S' flower delivery service is separate from that of Interflora's.

Furthermore, in relation to point two, Arnold J was similarly unconvinced that M&S' advert did itself enable the 'reasonably well-informed Internet user' to tell that M&S' flower delivery service is separate from Interflora. On point three, Arnold J also considered that, given the unique distribution system operated by Interflora (Interflora having a large network of independent entities and involving tie-ups and commercial arrangements with a number of companies across the world), it is particularly difficult for the 'reasonably well-informed user' to tell whether the service offered by M&S is separate from the service offered by Interflora.

For those reasons, the origin function of Interflora's trade mark was deemed to have been offended by M&S' selection and use of the INTERFLORA mark.

Having established infringement on the basis of identical infringement, Arnold J did not go on to consider at great length, the issue of infringement under Article 5(2) (taking unfair advantage of a mark 'without due cause') although the Court of Justice did say that use of a mark as a Google AdWord could indeed be use 'without due cause' – it would have been interesting to hear his views on the same.

Commercial implications

Whilst at face value, the decision may appear to be bad news for companies who may be using third party trade marks as Google AdWords (and indeed for Google itself!), the circumstances in this particular case are such that the outcome of the decision may not be transferrable to other cases and its value consequently weakened. Arnold J recognised that the particularly sophisticated and unusual network operated by Interflora is such that it does not allow the 'informed user' to easily distinguish its services from those of its competitors.

Such a finding may not have been made in relation to other companies in direct competition, who may for example have much more basic commercial structures. Perhaps then in this case, M&S was just unfortunate to have an opponent who operates such a unique system? Hopefully future decisions in this area will provide some clarity.

What this decision suggests is that, if you use Google AdWords, you must make clear in your 'advert' that there is no room for any confusion with the trade mark owner if you are selling competing goods or services.

Finally, of potential interest to clients who may be worried by the decision in this case, Arnold J made a (brief) reference to the potential use of a comparative advertising defence (within the meaning of Article 4 of the Misleading and Comparative Advertising Directive). Whilst this defence was not raised in the case (and so could not be considered on its merits), Arnold J did say that it would be interesting to see whether it could be successful in future cases.

Of perhaps more interest are Arnold J's findings that even today, a significant number of Internet users do not know that sponsored links are triggered by someone having paid for them and that 'initial interest confusion' may be sufficient for a finding of trade mark infringement.

Comment

This case (which is likely to go to appeal) has only resolved some of the uncertainties surrounding trade mark infringement in Google AdWords cases and a number of questions still require answers.

What this case does suggest is that competitors who use Google AdWords need to be very careful in their approach.

Useful links

Full decision of INTERFLORA, INC. INTERFLORA BRITISH UNIT Claimants and MARKS AND SPENCER PLC FLOWERS DIRECT ONLINE LIMITED: http://dycip.com/interflora2013