In a decision handed down on 5 November 2014 the Court of Appeal overturned the first instance decision of Mr Justice Arnold in the now long running trade mark infringement case concerning the use by Marks & Spencer of the Interflora trade mark as a sponsored keyword in Google searches. The Court of Appeal held that Mr Justice Arnold had made a number of errors in his judgment and that they were far from confident that he would have come to the same conclusion had he not made the errors. This left them with the option of either determining the issues of infringement themselves or to remit the case for retrial before the High Court. The Court of Appeal expressed their concerns about having to make a determination on infringement without the benefit of having seen and heard any of the witnesses give their evidence and without the opportunity to consider all of the documents. As such the Court of Appeal decided they had no alternative but to remit the case to the High Court for a retrial. The Court of Appeal was also influenced in this decision by the fact that this was a case of considerable importance to the parties and one in which the parties have invested substantial time and resources. It is very unusual for a trade mark infringement case in the English courts to be remitted back down to the lower court for a retrial. In a further decision handed down by the Court of Appeal on 12 November 2014 the Court confirmed that the retrial will be heard by a different Chancery Division judge and that the pre-trial and trial costs of the first High Court trial will be held over for the judge hearing the retrial to deal with. The Court of Appeal ordered that £1.1 million that Marks & Spencer had been required to pay under the order from the first High Court trial must be repaid. Main Issue in the Appeal The main issue in the appeal was whether the use of the Interflora trade mark by Marks & Spencer as a sponsored keyword in the Google search engine to trigger an advert for Marks & Spencer’s flower delivery system was an infringement of Interflora’s trade mark rights. The test to be applied in such situations was clearly set out by the Court of Justice of the European Union in the Google France case and applied to this case. Consequently, the following three factors had to be considered: -

  • Whether the reasonably well-informed and reasonably observant internet user was deemed to be aware that Marks & Spencer’s flower delivery service was not part of the Interflora network, but was in competition with it.
  • Whether Marks & Spencer’s advertisements enabled the reasonably well-informed and reasonably observant internet user to tell the Marks & Spencer’s flower delivery service was not part of the Interflora network.
  • Whether the nature of the Interflora network might make it particularly difficult for the reasonably well-informed and reasonably observant internet user to determine, in the absence of any indication in the advert, whether Marks & Spencer service was part of that network or not.

In considering these factors, the Court of Appeal gave guidance on a number of key issues before remitting these questions back to the High Court to consider in the retrial.

The average consumer

In the context of internet advertising, the average consumer (who is reasonably well-informed and reasonably observant and circumspect) and the reasonably well informed and circumspect internet user are one and the same. The average consumer is a hypothetical person and it is from the perspective of this person that the court must consider the particular issue it is called upon to determine.

A finding of infringement by the court is not precluded by a finding that many consumers, of whom the average consumer is representative, would not be confused if the court, having regard to the perceptions and expectations of the average consumer, also concludes that a significant proportion of the relevant public is likely to be confused. In this case the Judge was entitled to have regard to the effect of the advert upon a significant section of the relevant class of consumers and he was not barred from finding infringement by a determination that the majority of consumers were not confused.

Onus of proof

The Court of Appeal gave guidance on the test to be applied where the potential infringer is using an identical trade mark for identical goods (double identity) and the Court must determine if the use is be liable to affect the functions of the trade mark including the essential origin function. Following on from European case law, including the Google France decision, there has been consideration of whether this test amounts to the same test as used to assess the likelihood of confusion in cases where the mark complained of and/or the goods and services in relation to which it is used are only similar and not identical to the mark as registered.

In his judgment, Mr Justice Arnold took the view that the new test to be applied in double identity cases is the same test as is used to determine the likelihood of confusion in similar mark/similar goods or services cases but with the onus of proof reversed so it is the alleged infringer that has to demonstrate to the court that its use of the allegedly infringing sign was sufficiently clear such that there was no likelihood of confusion on the part of the average consumer as to the origin of his goods or services.

The Court of Appeal did not accept Mr Justice Arnold’s finding that the new test was the likelihood of infringement test with a reversed onus of proof.  The Court of Appeal restated the fact that the Court has recognised that keyword advertising is not inherently objectionable but that there are features of such advertising which may lead the consumer to mistake to origin of the goods or services so advertised. It confirmed that while there is an obligation on advertisers to craft their adverts with appropriate clarity, the burden of proving that they had failed to do so lies with the trade mark owner alleging infringement.

Initial interest confusion

Next the Court of Appeal considered the role, if any, of the concept of initial interest confusion in the infringement analysis in a case concerning keyword advertising. Initial interest confusion is consumer confusion as to the origin of goods or services prior to the purchase of the goods or services. There could be initial interest confusion even in cases where by the time the consumer comes to make a purchase any confusion has been dispelled. The Court of Appeal ruled that it is not helpful to seek to import the doctrine of initial interest confusion into EU trade mark law as far as it applies to keyword advertising. The Court of Appeal repeated that the test for whether keyword advertising amounts to infringement is clearly set out and does not require the additional consideration of initial interest confusion. The question is whether the advertiser has enabled the average consumer to ascertain the origin of the goods or services advertised and so to make an informed decision. The Court stressed that it is not the duty of such advertisers to avoid confusion.

Negative matching in keyword advertising

In this case Interflora also complained about Marks & Spencer bidding on generic flower related terms without negatively matching the word “interflora”. The effect of such bidding is that when a consumer searches for “interflora” a Marks & Spencer advert may still be displayed. The Court of Appeal found that the selection of a generic term as a keyword by Mark & Spencer cannot be considered in isolation to the Google algorithms and match types used in relation to them. If the advertiser has chosen the generic term with the object and effect of triggering the display of his advertisement in response to a search for a third party’s trade mark then it is permissible for a judge to find that the third party used the trade mark in the course of trade. The Court of Appeal went on to emphasise that this would not in itself be sufficient to establish infringement because it would still have to be shown that the advertisement did not enable the average consumer to ascertain whether the goods or services referred to originated from Interflora or from Marks & Spencer.