In Interflora Inc v Marks & Spencer Plc (21 May 2013) the High Court ruled that M&S had infringed Interflora’s registered trademark INTERFLORA by using this term as a Google AdWord to trigger adverts for M&S’ own flower delivery service.

The decision emphasised that the starting point is that keyword advertising is not inherently objectionable from a trademark perspective, although infringement could occur if one of functions of the trademark is adversely affected.

The decision by Arnold J was the culmination of lengthy litigation and involved a referral by the High Court to the European Court of Justice (ECJ) of various questions concerning the approach of European trademark law (see article 'Leading online customers up the garden path?' in our Commercial and IP update - November 2011).

It was not disputed that M&S had used a sign that was identical to Interflora’s mark in the course of trade, without Interflora’s consent, for goods and services that are identical to those covered by Interflora’s trademark registration. The dispute centred on whether or not M&S’ use of Interflora’s mark as a Google AdWord affected or was liable to affect one of the functions of the trademark.

The case emphasised the following principles in relation to keyword advertising:

  • The origin function of a trademark (which tells the customer the origin of the goods and services) is adversely affected by keyword advertising triggered by the trademark if the advertisement does not enable reasonably well-informed and observant internet users to tell, without difficulty, if the advertised goods or services come from the trademark owner or from an unconnected third party. A reasonably well-informed and observant internet user is not particularly technically literate and does not know how AdWords works.
  • It is for the advertiser to ensure that the use of the trademark is clear, so that there is no real risk of these users being confused about the origin of goods or services.
  • Use of another party’s trademark as an internet keyword does not affect the trademark’s advertising function. The trademark owner is still free to use its mark to advertise its own goods and services, even though it might have to expend more effort in doing so. For example, it may have to pay more to display its search results more prominently to contend with a competitor who is also using its mark as a keyword to highlight alternative goods or services to consumers.
  • Keyword advertising could adversely affect the 'investment' function of a mark (which allows the trademark owner to use its mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty) if the advertising damages the reputation or image of the trademark.

In this case, the judge accepted Interflora’s evidence that internet users were clicking on the M&S advertisement and then moving from the M&S page to an Interflora page. Interflora argued that this showed the users’ initial confusion in thinking that M&S was part of the Interflora network, as the user then searched for an Interflora page when realising (on visiting the M&S site) that this was not the case. M&S did not produce any evidence to counter this argument. The judge decided that Interflora could rely on this 'initial interest confusion' to show an adverse effect on the origin function of the trademark.

The fact that Interflora ran a network of commercial flower delivery partners who operated under their own brands was also significant. The court was satisfied that, on the basis of their general knowledge of the market, the relevant internet users would not be aware that the M&S flower delivery service was not part of the Interflora network.

As the decision in this case was based on quite specific facts, trademark owners should be cautious before relying on it to take action against anyone using their trademarks as sponsored search engine terms.  However, advertisers who are contemplating using third party trademarks as keywords should consider their strategy carefully to assess the infringement risks.