The failure by Marks and Spencer plc ("M&S") to "negative-match" the word "Interflora" in Google's AdWords service constituted "use" of Interflora as a trade mark.

Following his decision that M&S's use of keyword advertising infringed Interflora's trade marks (see our IP ebulletin of 23 May), in a separate judgment on the appropriate form of injunction, Mr Justice Arnold, granting a general EU-wide injunction in favour of Interflora, rather than a more specific set of prohibitions, also found that failure to "negative match" purchased keywords against a competitor's trade marks could be infringing use. However, comparative use was again implied to be an acceptable alternative.

Business impact

  • Bringing the failure of advertisers to "negative-match" others' trade marks within Adwords into the arena of infringing use could be good news for those trying to protect their brands from this sort of piggy-back advertising by their competitors. 
  • Courts are likely to grant trade mark owners who are successful in a trade mark infringement action, a general injunction preventing their infringing competitor from unlawfully using their trade marks, including failure to negative-match. 
  • However, general injunctions against advertisers do not mean that advertisers can never use a competitor's trade mark again for fear of being in contempt of court. Unsuccessful advertisers may be able to obtain declaratory relief in relation to future proposed uses. 
  • Those wishing to resist an EU-wide injunction where Community trade marks (CTMs) are involved face an uphill battle. The general rule for CTMs is that the prohibition against further infringement extends to the whole EU territory except when (i) the complaint only relates to part of the EU; or (ii) the defendant proves that its use does not affect or is not liable to affect the functions of the mark in certain Member States. To defeat an EU-wide injunction, defendants are required to adduce evidence that the average consumer of other Member States has different characteristics resulting in the functions of the CTM not being affected in that territory.  
  • Trade mark owners' refusals to grant competitors the right to use their trade marks in the text of their advertisements for comparative purposes may be found to be inconsistent with a fight against infringement and may provide the court with a justification to grant a qualified injunction. 

Background

Following his decision on M&S's liability for infringement of Interflora's trade marks on 21 May, Arnold J heard arguments on the form of order and injunction that should be made.  See our ebulletin of 23 May for further background.

Key findings

"Negative matching": Arnold J emphasised the role of "negative matching" in the Google Adwords process.  This is a way of ensuring that no one searching for a particular term gets your Adwords sponsored results.  Not negative matching the term Interflora meant that searches for "interflora" would still bring up M&S's service because the Google Adwords algorithm is broad enough to bring up anything where keyword terms like "flower delivery" which M&S had bid on is a keyword. M&S argued that there was nothing in Arnold J's original judgment (discussed above) to say that M&S's failure to negative match Interflora "or any term differing only colourably therefrom" constituted use of the registered marks and therefore such practice should not be injuncted. Further the answers to the questions referred to the CJEU were all in term of keywords which had been "selected in an internet referencing service".  M&S disputed that they used the sign "interflora" when bidding on "flower delivery" without negative matching. However, Arnold J held that this was "use" of the sign "interflora",albeit in a "less direct way" than positively bidding on competitor's trade marks as keywords. It was immaterial that it did not involve M&S selecting "interflora" as a keyword and this was not inconsistent with the CJEU's ruling.  An injunction was therefore granted, to restrain infringement of the trade marks for the whole of the EU (since the marks involved included a Community trade mark for INTERFLORA).

Comparative advertisements: The judge declined to decide whether M&S's proposed draft injunction, allowing M&S to use Interflora's marks as keywords to trigger advertisements worded "Try M&S for a change" or "Use an alternative", was lawful, as this called for evidence by both parties on whether such advertisements would or would not confuse the average consumer, which they had not had an opportunity to adduce.  The judge also commented that, although Google's current Adwords policy enables trade mark owners to object to the use of their trade marks in the text of advertisements without consent (unless there is descriptive use or the advert is by a reseller), any objection by Interflora to the use of its marks in a comparative advert (for example saying something like : "Try an alternative to Interflora") might raise an issue "as to the propriety of Interflora seeking to restrain infringement by M&S while preventing M&S from adopting what might be a means of avoiding infringement". Thus there is an implication that a comparative approach may be a way forward for competitors.  

Type of injunction: Arnold J noted that the conventional form of injunction to prevent trade mark infringement is a general injunction. M&S argued that a general injunction would be disproportionate in this case because it would have a "chilling effect", leading advertisers to be overly cautious for fear of being in contempt of court, despite the trial judgment only applying to specific infringing acts. The judge acknowledged the force of the argument but considered that this problem fell away since the recent case of Hotel Cipriani v Fred 250 (2013), in which a general injunction did not prevent one of the defendants from obtaining a court declaration that certain of its proposed acts would not contravene the injunction. There was no need for fresh proceedings or a contempt of court application.  In light of the long list of infringing signs used by M&S, Arnold J considered that it would be difficult to formulate a brief specification of infringing acts and that specific injunctions would risk doing injustice to both parties. Therefore a general injunction was more appropriate.

Geographical scope of the injunction: Interflora sought an injunction to prevent M&S from infringing its trade marks on a EU-wide level (by virtue of its CTM). Arnold J noted that the CJEU in DHL had only envisaged two exceptions to the general principle that a prohibition on infringement extends to the entire area of the European Union: (i) Interflora only sought an injunction for part of the EU; or (ii) M&S showed that its use of the Interflora marks did not affect or was not liable to affect the functions of the Trade Marks. While in the trial judgment, Interflora's claim had been assessed in relation to the average consumer in the UK, M&S had not adduced any evidence suggesting that internet users in other member states had different characteristics. As such, the general rule stated by the CJEU applied. The fact that superior courts of countries such as Germany had found no infringement in similar keyword advertising cases did not help M&S as the conclusions of foreign courts were based on different sets of facts and these courts did not benefit of the evidence adduced in this case.

Conclusions

Interflora's success in this and the May judgment should increase the confidence of brand owners to enforce their rights in the Adwords context. However, we sounded a note of caution in our last ebulletin, that an element of the success of the brand owner in this particular case was dependant on the relative inexperience of most internet users and the multiple-partner nature of Interflora's particular business model.  Significantly, also, the comparative advertising defence was not raised.

Nevertheless, the interpretation, in this latest decision, of a failure to "negative match" competitors' trade marks when using the Adwords system, as infringing use of the marks could further bolster the brand owner's position, whilst adding a note of caution for those involved in the purchasing of keywords for even general terms.