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Thursday, 24 March 2011

Has Spring arrived early for Interflora?

Has Spring arrived early -- or too early --
for Interflora in its battle with M&S?
Springtime is the time for flowers, which makes it totally appropriate that the first little buds should begin to appear in Case C-323/09 Interflora Inc and Interflora British Unit v Marks & Spencer plc and Flowers Direct Online Limited, a reference to the Court of the European Union (ECJ) for a preliminary ruling from the High Court of Justice of England and Wales. Today's budding jurisprudence comes in the form of an Opinion from Advocate General Niilo Jääskinen (all the way from Finland where, the Kat learns, spging has yet to arrive: it's currently freezing and the temperature feels like minus 7 Celsius).

Essentially, the problem here was that Marks & Spencer bought the word 'interflora' as a keyword for Google's AdWord paid referencing service, so that people who were looking for the world-famous Interflora flower delivery service would find an advertisement for Marks & Spencer's rival service at the top of the non-organic, paid-for search results. This did not make Interflora very happy since (i) they were proprietors of the hugely famous INTERFLORA trade mark, (ii) internet users who keyed in "interflora" as a search term were obviously looking for their website and not Marks & Spencer and (iii) worst of all, this was just before the onset of St Valentine's Day, which is one of the biggest events of the year for the flower trade. This just had to be trade mark infringement, said Interflora. The ECJ's ruling in Google France that neither the sale nor the use of terms protected by trade marks as keywords constituted a per se trade mark infringement didn't help them -- but that was a "5(1)(a)" case, where same goods/same mark (double identity) infringement was alleged. Here Interflora had a '5(2)' argument, based on a use which allegedly damaged the mark's reputation or distinctive character without due cause.

The trial judge, Mr Justice Arnold, painstakingly analysed both the relevant law and the facts, before referring a raft of ten questions for preliminary rulings. Following some helpful correspondence between the referring judge and the ECJ's registry, the ten questions were pruned down and clarified to a miserly four.

The Advocate General's advice to the ECJ is a good deal simpler than the questions. He says:
"(1) Article 5(1)(a) of ... Council Directive 89/104 ... and Article 9(1)(a) of Council Regulation ... 40/94 .. on the Community trade mark must be interpreted as follows:

– A sign identical with a trade mark is used ‘in relation to goods or services’ within the meaning of these provisions when it has been selected as a keyword in connection with an internet referencing service without the consent of the trade mark proprietor, and the display of ads is organised on the basis of the keyword. [following paragraph 65 of Google France]

– The proprietor of a trade mark is entitled to prohibit such conduct under abovementioned circumstances, in the case where that ad does not enable an average internet user, or enables the said user only with difficulty, to ascertain whether the goods or services referred to in the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or from a third party. [affirming the first paragraph of the ruling in Google France]

– An error concerning the origin of goods or services arises when the competitor’s sponsored link is liable to lead some members of the public to believe that the competitor is a member of the trade mark proprietor’s commercial network when it is not. As a result of this the trade mark proprietor has the right to prohibit the use of the keyword in advertising by the competitor in question.[Article 5(1)(a) double identity infringement does not require that there be a likelihood of confusion -- in TRIPS Agreement this means that a likelihood of confusion is to be presumed -- but Article 5(1)(b) infringement, which does require a likelihood of confusion, describes this as including a 'likelihood of association': this arguably includes the leading of members of the public to believe that Marks & Spencer is a member of Interflora's network when it is not]

(2) Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94 must be interpreted as meaning that the use of a sign as a keyword in an internet referencing service in relation to goods or services identical to those covered by an identical trade mark with a reputation also falls within the scope of application of those provisions and it can be forbidden by the trade mark owner [not in every case, since it's not a per se infringement, but only] when

(a) the ad shown as a result of the internet user having typed as a search term the keyword identical with a trade mark with a reputation mentions or displays that trade mark; and

(b) the trade mark

– is either used therein as a generic term covering a class or category of goods or services; [add "for which the trade mark is registered", to avoid Apple Inc being able to sue for the use of 'apple' as a keyword for the pomaceous fruit of the mala domestica]

– or the advertiser attempts thereby to benefit from its power of attraction, its reputation or its prestige, and to exploit the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark.[This wide formulation will be sure to delight trade mark owners and dismay Google's sales department, since in one sense every purchase of someone else's trade mark as a keyword for AdWord purposes is chosen so that the internet user, who keys in the term because he is attracted by what it stands for, will be presented with the AdWord purchaser's advertisement]

(3) The fact that the internet search engine operator does not permit trade mark proprietors in the relevant geographical area to block the selection of signs identical to their trade marks as keywords by other parties is as such immaterial in so far as the liability of the advertiser using of the keywords is concerned.".[The IPKat thinks this is a really interesting question, despite its irrelevance in this particular situation, and suspects that it will re-emerge in the future when issues like secondary liability and exemption from liability for service providers crop up].

6 comments:

The Bright Spark said...

I see from answer 2(b) (second indent) that the AG is continuing the trend in L'Oreal v Bellure, that any taking advantage is unlawful (you ignore the issue whether it is "fair", despite what the Directive and the Regulation say).

Anonymous said...

Isn't the devil in the detail? The statement that the advertiser can be prevented from such actions if:-

the advertiser attempts thereby to benefit from its power of attraction, its reputation or its prestige, and to exploit the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark.

is accepted law, is it not. What is new about that statement? The crucial point will come when the UK court tries to lay down some guidelines on what usage is actually caught by this statement. Personally I don't think this Opinion is anything radical, the crucial decision with be that of the UK court on the facts of the case.

Gareth said...

Interesting conclusion that the mark must be displayed in the ad for art. 5(2) to apply.

Anonymous said...

Interesting Gareth, if your point is right doesn't this then that this completely destroys InterFlora's case, as I understand the M&S advert does not 'display' the mark in the ad. Do you intrepret this 'visible' qualification' as the bare minimum that is needed for 5(2) to kick in? and if that is the case some of the news comment that Interflora may have won is misguided? Are we reading this wrong?

Anonymous said...

The problem with the visible use point is that it then seems to be contradicted by some of the AG's comments on the specifics of M&S's use of keywords in this case.

This case still has a way to run.

Gareth said...

@Anonymous - I haven't read the Opinion in detail yet, but I would imagine reports of a "win" for Interflora are referring to their claim under art. 5(1)(a).

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