Mr. Justice Arnold has pronounced in Chancery on the latest round of the global battle between brand owners and advertisers over use of competitors’ registered trade marks as key words in search engine advertising. The case of Interflora v Marks & Spencer, in which Osborne Clarke acts for Marks & Spencer, now joins a slew of “Adwords” cases queuing up for airing before the ECJ. Emily Devlin reports.
Who: Interflora (Claimant) and Marks and Spencer (Defendant)
Where: English High Court, Mr Justice Arnold
When: 22 May 2009
Law stated as at: 29 May 2009
In December 2008 Interflora sued Marks and Spencer ("M&S") for trade mark infringement. The claim centres on the highly contentious area of keyword use in search engine advertising. In this case Interflora has objected to M&S nominating the word INTERFLORA and variations of it as a "keyword" on Google's Adword programme in order to trigger sponsored links for M&S's own flower delivery service when a user searches for the term INTERFLORA or similar. Osborne Clarke is acting for M&S in defending the claim.
Prior to May 2008 Google's policy in the UK and Ireland was to prevent unauthorised third parties from nominating keywords that were also registered as trade marks, upon request by the trade mark owner. Following the decision of the English High Court in the MR SPICY case (see marketinglaw http://www.marketinglaw.co.uk/articles/2008/9867.asp), that policy was changed and since then, in the UK and Ireland, it has been open to advertisers to nominate keywords without restriction.
As a result, Google's policy across Europe now differs and certain keywords are restricted in some countries and not others.
In addition, brand-owners are split as to whether the use of branded keywords is a legitimate marketing tool or simply the misappropriation of a competitor's brand and goodwill.
First UK Adwords action against a competitor
By issuing proceedings late last year Interflora became the first brand owner to take action in the UK directly against an advertiser and competitor, rather than against the search engine itself. However, whilst Google is not named as a defendant to proceedings, Interflora alleges that its trade marks have been infringed both by M&S and M&S jointly with Google. A number of the acts undertaken by M&S in nominating the disputed keywords are complained of, most of which centre around the way in which Google's Adwords program operates.
The timing of the claim is interesting, not least because there are numerous, similar proceedings on foot in other EU jurisdictions. By February 2009 there were a total of 6 pending references to the ECJ from courts across the EU seeking clarification and certainty in relation to whether or not keyword use could amount to "trade mark use" for the proposes of infringement.
In his judgement of 22 May 2009, Mr Justice Richard Arnold recognises that it would be impossible for any trial of Interflora's claim to proceed absent the much-needed guidance of the ECJ on that very point. As a result, the Learned Judge decided that a pre-trial reference should be made, bringing the number of ECJ references to 7.
The questions to be referred are yet to be settled. In the meantime, however, M&S remains free to nominate INTERFLORA as a keyword on Google, as will advertisers in 194 other countries from 4 June 2009 onwards, the date on which Google has decided to suspend its trade marks complaint procedure around the world.
Why this matters:
Online trade mark use and keyword advertising have long been a contentious issue in trade mark law. This is, not least, because the question of what amounted to "trade mark use" at the time the harmonising Trade Marks Directive was ratified was well understood. However due to advances in technology and the growth of the online marketplace, the issue is now uncertain.
EU trade mark law is supposed to be harmonised, but at present differing decisions in relation to keyword and metatag use have been arrived at across various national jurisdictions. It is hoped that the various ECJ references currently on foot will finally put to rest this debate, which has gone on now for many years.
In the UK, where the courts have traditionally taken a strict view, it is arguable that keyword use does not amount to trade mark infringement. MR SPICY aside, the applicable case law in this area is Lord Justice Jacob's obiter comments in Reed v Reed  EWCA Civ 159 (at paragraph 140), in which the Learned Judge held that, in the context of metatag use, the "invisible use" of a trade mark was not "use" for the purposes of trade mark infringement. So far the English Courts have not had the chance to say whether or not there is "use in the course of trade" in these circumstances and, therefore, without guidance from the ECJ on the issue, the position is far from clear.
At the time of writing it is impossible to say which side of the infringement fence the ECJ will fall. The first three references, from the French Supreme Court, have been heard before the ECJ Grand Chamber and the Advocate-General's Opinion is expected in mid July 2009.
If the ECJ decides that keywords use is "use of a mark in the course of trade" and therefore infringing, this will have a devastating effect on online advertising and the mainstay of Google's business model. However, if the ECJ decides there is no infringement the face of search engine marketing across Europe will change instantly. All eyes are now on the ECJ for the next stage in this saga.