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.

Two of our regular Kats are currently on blogging sabbaticals. They are David Brophy and Catherine Lee.

Tuesday, 28 May 2013

"Say it with flowers": Interflora wins Dust-up over Door-to-Door Dahlias

The IPKat does some field
research into flowers ...
Connoisseurs of long judgments will know that Interflora Inc and Interflora British Unit v Marks and Spencer Plc and Flowers Direct Online Limited [2013] EWHC 1291 (Ch) was decided last Monday, 21 May 2013, in the Chancery Division, High Court of Justice, England and Wales, by (who else?) Mr Justice Arnold. This is a 326 paragraph whopper, replete with colour illustrations that will look pretty grim when reproduced in the drab monochrome respectability of the European Trade Mark Reports (ETMR), which this blogger has the honour of editing.

For the benefit of new readers, and to refresh the memories of old ones, this action is all about the online woes of Interflora, which runs a famous flower delivery network in all countries in the world where flowers may be profitably sent by third parties. Interflora owned Community and United Kingdom registered trade marks consisting of the word INTERFLORA. Marks & Spencer (‘M & S’) was an equally well-known retailer of a large range of products, including flowers. Both parties operated internet websites which took orders for the delivery of flowers. 

M & S paid Google a handsome sum for the use of, among others, the word ‘interflora’ as a keyword for internet searches so that it could display advertisements for its own flower delivery service. The M & S advertisements would appear on the search engine results page when a consumer, searching the internet for Interflora's services, deployed the word ‘interflora’ as the search term.

Your M & S -- but our INTERFLORA marks,
said Interflora. And they were right 
Interflora, maintaining that the use by M & S of the keyword ‘interflora’ as a means of displaying its own advertisements to customers who were looking for Interflora infringed its trade marks, sued for infringement of its Community and United Kingdom trade marks.  M & S denied infringement and the trial judge (Mr Justice Arnold) referred a series of questions of interpretation of the relevant legislation to the Court of Justice of the European Union (CJEU) [decision here; full, uncensored list of questions here; subsequently pruned list of questions here]. Following the decision of the CJEU here, the action returned to Arnold J, who was tasked with the responsibility of deciding the case on the evidence. In particular, he had to rule on whether the use by M & S of the Interflora trade marks as keywords affected or was liable to affect the origin and investment functions of the trade marks. M & S denied infringement and relied on the ruling of the CJEU that keyword advertising had no effect on the advertising function of a registered trade mark.

Yes, said Arnold J, Interflora's trade marks had indeed been infringed.

* First, in case there should be any doubt, he summarised the position of the CJEU on double-identity infringement under Article 5(1)(a) of the Trade Mark Directive and Article 9 of the Community Trade Mark Regulation.  After reminding us of the relevant provisions of TRIPS with regard to double identity, he explained that six conditions had to be satisfied before M & S -- or any other defendant -- could be held liable for double-identity trade mark infringement: (i) there had to be use of a sign by a third party within the relevant territory; (ii) the use had to be in the course of trade; (iii) it had to be without the consent of the proprietor of the trade mark; (iv) it had to be of a sign which was identical to the trade mark; (v) it had to be in relation to goods or services which were identical to those for which the trade mark was registered; (vi) it had to affect or be liable to affect one of the functions of the trade mark or give rise to a likelihood of confusion on the part of the public.

* It was settled law that the likelihood of confusion had to be appreciated globally, taking account of all relevant factors. The likelihood of confusion had to be judged through the eyes of the average consumer of the goods or services in question, he or she being deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely had the chance to make direct comparisons between marks and had to instead rely upon a possibly imperfect mental recollection of them.

* It was settled law that it was for the national court to determine whether a description of goods or services,a trade mark or a promotional statement was liable to mislead by considering the matter from the perspective of the average consumer who was reasonably well-informed and reasonably observant and circumspect.

* Applying settled law, M & S had infringed. The preliminary ruling of the CJEU made it plain that three factors in particular were to be considered.
First, was the reasonably well-informed and reasonably observant internet user deemed to be aware, on the basis of his or her general knowledge of the market, that M & S's flower delivery service was not part of the Interflora network but was in competition with it? The court was not satisfied that that was generally known at the relevant time, nor was it satisfied that it was generally known now.

Secondly, would M & S's advertisements enable the reasonably well informed and reasonably observant internet user to tell that M & S's flower delivery service was not part of the Interflora network? On the facts, they did not. There was nothing in any of M & S's advertisements before the court that could be said to inform the reader that M & S's flower delivery service was not part of the Interflora network. 
Since M&S, which started out with clothing,
 branched out into flowers, might 
Interflora not
retaliate by selling underwear?
Thirdly, what was the nature of the Interflora network? The CJEU had opined that 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 advertisement, whether M & S's service was part of the network or not. The court agreed with that. This was because one feature of the Interflora network was that members traded under their own names. In addition, lnterflora had commercial tie-ups with several large retailers. That made it all the more plausible that there should be a connection between M & S's flower delivery service and the Interflora network.
* CJEU case law established that the use of signs adversely affected the origin function of the trade marks if such use did not enable reasonably well-informed and reasonably observant internet users, or enable them only with difficulty, to ascertain whether M & S's flower delivery service originated from Interflora, or from an undertaking economically connected with Interflora, or whether originated from a third party. On the facts and taking account of the factors mentioned by the CJEU, the M & S advertisements which were the subject of Interflora's claim, did not enable reasonably well-informed and reasonably attentive internet users, or enabled them only with difficulty, to ascertain whether the service referred to in the advertisements originated from the proprietor of the trade marks, or an undertaking economically connected with it, or originated from a third party. Indeed, a significant proportion of the consumers who had searched for 'interflora' and similar signs on the relevant date, and then clicked on to the M & S advertisements displayed in response to those searches, were led to believe, incorrectly, that M & S's flower delivery service was part of the Interflora network. It followed from this that the use by M & S of Interflora’s signs had an adverse effect on the origin function of Interflora’s trade marks.

This Kat is, as usual, impressed with the thoroughness with which Arnold J sifted and applied the various rulings and statements of courts both European and national in reaching his decision. While Interflora's action carried the day, it is now plain that, while M & S's use of 'interflora' as a keyword constituted a trade mark infringement, there will be still factual circumstances in which the use of another's trade mark does not infringe -- so long as the budding doctrine of initial interest confusion, to which the learned judge made reference at [306], is not brought into play.

Merpel would be surprised if this case stopped here.  You can't write a judgment of getting on for 50,000 words for an audience of highly-skilled lawyers and expect them not to find something in it that was worthy of an appeal or two.

6 comments:

Anonymous said...

Of course, a normal consumer hasn´t a cauliflower, and know this is fair competition. Let´s hope CoA will put this right!

Anonymous said...

‘Cauliflower’ is a euphemism in my language meaning ‘headbanger (cf Oxford Dictionary of Euphemism), but in old English it was a euphemism for a lower part. I´m sorry for my confusion of tongues!

Anonymous said...

This judgement seems fine to me, but I doubt that it will establish a general precedent. It seems to turn on the particular facts that both companies are expected to sell products from other suppliers (other brands stocked in M&S, Interflora providing flowers via local retailers), which massively increases the likelihood of M&S stocking interflora products, and therefore the likelihood of confusion.

It would be interesting to see what happened in a similar case with more independent retailers (or ones which are publicly at odds and distinct, such as Microsoft and Apple)

Peter S said...

The judgment does not really depart from the Canon judgment all that time ago.

This turned on the facts that the essential function of the trade mark was affected = infringement.

What will be interesting is the body of caselaw that will continue to develop around essential function and keywords. I can see some lengthy cases further padding and working out what exactly does and does not interfere with the essential function...

IP never gets any easier, does it?

Anonymous said...

The question is what “the commercial message attached therto” means, cf ECJ´s Joined Cases C-236-238/08, Google v. Vuitton, [2010] ECR I-2417, para 90: “that normally informed and reasonably attentive internet users are unable to determine, on the basis of the advertising link and the commercial message attached thereto, whether the advertiser is a third party vis-à-vis the proprietor of the trade mark or, on the contrary, economically linked to that proprietor”. So, it´s not just the link, but also the commercial message on M&S´s website the judge has to consider. And on that site, the INTERFLORA-mark don’t show up. To apply an “initial interest confusion”-method here is therefor wrong.

Anonymous said...

As an addition to my last comment, Thursday, 30 May 2013 15:29, please notice that the Swedish Market Court and the Court of Appeal in Gothenburg shared my approach.

Subscribe to the IPKat's posts by email here

Just pop your email address into the box and click 'Subscribe':