For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

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Thursday, 22 September 2011

Autumn a golden season for Interflora

Pumpkin by Flowers by Walter
As summer gives way to autumn and the golden leaves tumble, the prettiest flowers are those that come the florists -- which brings the IPKat on to today's decision 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.

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.

Today the Court of Justice ruled as follows:
"1. Article 5(1)(a) of ... Council Directive 89/104 ... and Article 9(1)(a) of Council Regulation ... 40/94 ... must be interpreted as meaning that the proprietor of a trade mark is entitled to prevent a competitor from advertising – on the basis of a keyword which is identical with the trade mark and which has been selected in an internet referencing service by the competitor without the proprietor’s consent – goods or services identical with those for which that mark is registered, where that use is liable to have an adverse effect on one of the functions [which raises the interesting question of how many functions a trade mark has. The Court has identified four by name, but it was reported last week in the MARQUES conference that up to 17 have been identified] of the trade mark. Such use:

– adversely affects the trade mark’s function of indicating origin where the advertising displayed on the basis of that keyword does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services concerned by the advertisement originate from the proprietor of the trade mark or an undertaking economically linked to that proprietor or, on the contrary, originate from a third party;

– does not adversely affect, in the context of an internet referencing service having the characteristics of the service at issue in the main proceedings, the trade mark’s advertising function; and

– adversely affects the trade mark’s investment function if it substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty.

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 proprietor of a trade mark with a reputation is entitled to prevent a competitor from advertising on the basis of a keyword corresponding to that trade mark, which the competitor has, without the proprietor’s consent, selected in an internet referencing service, where the competitor thereby takes unfair advantage of the distinctive character or repute of the trade mark (free-riding) or where the advertising is detrimental to that distinctive character (dilution) or to that repute (tarnishment).[this looks like good news for Interflora ...]

Advertising on the basis of such a keyword is detrimental to the distinctive character of a trade mark with a reputation (dilution) if, for example, it contributes to turning that trade mark into a generic term.["for example"opens the door to a large categories of actually or arguably genericising uses. This will be a litigation growth area, predicts Merpel]

By contrast, the proprietor of a trade mark with a reputation is not entitled to prevent, inter alia, advertisements displayed by competitors on the basis of keywords corresponding to that trade mark, which put forward – without offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution or tarnishment and without, moreover, adversely affecting the functions of the trade mark with a reputation – an alternative to the goods or services of the proprietor of that mark". [while this is expressed as a general principle, the Kat thinks that, in practice, it will become a narrow exception].
This IPKat team member is going to give this some further thought to this ruling and test it out a bit over a refreshing pint of Badger when the opportunity arises. In the meantime, he's quite struck with the relatively intelligible mode of expression of the Court's ruling which seems to him, prima facie, to be about as good as we can hope for when applying twentieth-century pre-internet trade mark legislation to a set of facts that is not provided for by the Directive and Regulation and which is scarcely within the radar of the Recitals.

5 comments:

Anonymous said...

The court has long ago paint itself into a corner.

Anonymous said...

It's about time the Court of Justice turned it's mind to the meaning of "without due cause". And it's nice to see they adopted the Advocate General's flexible interpretation of it rather than that given under Benelux law.

Anonymous said...

Compare in para 62 ”substantially interferes” (which is bad), with “oblige the proprietor of that trade mark to adapt its efforts” in para 64 (which is ok), and then ask yourself what the court is talking about! As a lawyer what can I say to my client?

austrotrabant said...

First impression:

I struggle to agree because as long as the third party TM is not used in the text of the ad, there is (for example in the opinion of the German BGHs) no indication of free riding, or a chance of dilution...

The only thing I am wondering about is if the 'investment function' has already been put forward or elaborated about in more detail in the other ECJ-KWA decisions.

Austrotrabant

Bob said...

Does anyone know when the High Court may issue a decision?

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