Two cases heard recently at the High Court have resulted in referrals to the European Court of Justice (ECJ) on the question of whether use of a registered trade mark in an internet Adword or sponsored link constitutes infringement of that registered mark by any of the parties involved.

The first case is that of L'Oreal SA v eBay. This case concerns a number of issues in addition to those relating to sponsored links, all of them relating to L'Oreal's attempts to prevent the sale of counterfeit and grey market perfumes and cosmetics via eBay. The case heard before the High Court was one of five cases raised by L'Oreal across Europe. Thus far the cases in France and Belgium have been decided in favour of eBay, the case in Germany was decided in favour of L'Oreal and the Spanish case remains outstanding.

Initial reports suggested that the UK case had also been decided in favour of eBay and whilst the judgement from Mr Justice Arnold provides some encouragement for eBay the final outcome of the case will depend on a number of references to the ECJ. Mr Justice Arnold expressed his opinion in the case that the display of sponsored links to users does not constitute "use" of the signs in question by eBay. He went on to explain however that "in view of the current uncertainty over this and related questions discussed in my judgement in Interflora v M&S, however I do not feel able to say this is acte clair" and therefore decided to refer this issue to the ECJ along with other issues from the case. Mr Justice Arnold is to hear further arguments from the parties on the precise format that the questions to be submitted to the ECJ will take but has indicated that the parties should consider another of his recent judgements first.

The judgement that Mr Justice Arnold refers to is his judgement in Interflora v M&S. We provided an explanation to the background of this case in the January edition of this E-Bulletin, which can be accessed here. In that judgement Mr Justice Arnold refused to grant Interflora an interim injunction against Marks and Spencer and others to stop them from using the term "Interflora" and close misspellings as a sponsored Google Adword search term.

In the Interflora v M&S case, Mr Justice Arnold decided to follow a path well trodden by domestic courts throughout the EU by referring the question of whether or not the use of these terms as sponsored links constitutes trade mark infringement. The questions to be referred to the ECJ are still to be agreed between the parties, as are the questions in the L'Oreal v eBay case.

Mr Justice Arnold justified his decision to make a reference to the ECJ despite a number of other cases throughout Europe by stating:

"there is at least a real possibility that the rulings by the ECJ on the existing references will not clearly resolve all the issues of law which arise in the present case. A further factor which supports this conclusion is the risk that one or more of the existing references may be withdrawn as a result of settlement."

Mr Justice Arnold hopes that the consideration of each of these judgements by the respective parties will lead to the reference of a sound set of questions to the ECJ to help clarify the legal position regarding the use of registered trade marks as sponsored links. A lengthy wait may follow for guidance to be provided from the ECJ but it may be reasonable to hope that at the current rate of referrals the ECJ may act swiftly to resolve this issue to help avoid any further references on this issue in future.