Who: Interflora Inc and Anor vs Marks & Spencer Plc
Where: Chancery Division of the High Court, London
When: 3 June 2013
Law stated as at: 3 June 2013
What happened:
Marks & Spencer has been given leave to appeal the 21 May 2013 judgment of Arnold J in the long-running trade mark infringement litigation started by Interflora against M&S in 2008.
The proceedings arose from M&S’s use of the now well-established “Adwords” service offered by Google to help M&S promote its flower delivery service. Based on this, the results seen by web users keying “interflora” and similar terms into Google included, in the sponsored results section, a link to webpages advertising M&S’s flower services.
Osborne Clarke, which operates marketinglaw.co.uk, has acted for M&S throughout the dispute.
In his judgment, Mr Justice Arnold held that M&S had infringed the INTERFLORA registered trade mark.
The Judge confirmed that M&S’s bidding on the INTERFLORA trade mark as a keyword was not inherently objectionable. The key issue in the case was whether M&S’s use of the claimant’s brand “affected or was liable to affect the functions” of the INTERFLORA trade mark. This was dictated by previous CJEU judgments in cases where, as here, the claimant alleged trade mark infringement under Article 5 (1) (a) of the Trade Marks Directive (89/104/EEC now superseded by the consolidated Directive 2008/95/EC) and Article 9(1)(a) of the Community Trade Mark Regulation.
Interflora argued that the “origin” and “investment” functions of their brand were affected
For these purposes, the “functions of a trade mark” include its origin, advertising, investment and communication functions.
In this case, Interflora alleged that the particular functions affected were “origin” and “investment.” For its part, M&S relied on an earlier European Court of Justice finding that keyword advertising using a sign identical to the claimant’s registered mark had no effect on the “advertising” function.
On the “investment function,” having heard the evidence and submissions, Arnold J held that there was no effect on this function either.
This was based on the judge’s interpretation of CJEU findings at earlier stages of the case. These indicated to Arnold J that for the investment function to be affected, there has to be an adverse effect on the reputation of the trade mark. For example, the image the trade mark conveys is damaged.
Since in this case, there was no evidence of any such adverse effect on the INTERFLORA brand, the “affecting the investment function” claim failed.
Onus on M&S to prove no real risk of origin confusion
On the “origin” function, Interflora was more successful. Arnold J held as follows:
(i) the origin function is adversely affected by keyword advertising triggered by the trade mark if the advertisement does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the advertised goods or services originate from the trade mark owner or from a third party;
(ii) the onus is on the advertiser (M&S) to ensure that this adverse effect does not arise and that there is no real risk of users being confused;
(iii) to establish an adverse effect it is not enough to show that some web users may have had difficulty on this point;
(iv) but it is enough to show that the ad causes a “significant section” of the relevant class of persons wrongly to believe that the advertised products (in this case those of M&S) are connected to the trade mark owner (Interflora). Thus there is no “single meaning” rule in trade mark law as there is in for example the law of defamation in the UK;
(v) in this case, it was relevant to consider whether the reasonably well-informed and reasonably observant internet user is aware that M&S’s flower delivery service is not part of the Interflora network, and, if not, whether M&S’s ads enable such a user to ascertain this.
Based on the above and his reading of the evidence, Arnold J held that M&S had failed to discharge the onus on them to show that there was no real risk of a significant section of reasonably well informed and reasonably observant internet users being unable, without difficulty, to ascertain whether M&S’s flower delivery services originated from Interflora, even though he found that the majority would not believe that there was a connection between them.
In a subsequent Judgment, primarily dealing with the form of injunction to be granted in favour of Interflora, Arnold J held that there would be trade mark infringement even if M&S had not positively selected the word INTERFLORA as a Google AdWord in order for its advertisements to be delivered in response to a search for INTERFLORA. The way the Google AdWords system works, it is possible for an advertisement to be delivered even when the keyword bid on is not the same as the search term if the AdWord is selected as a “broad match”. This might be the case where in the eyes of the Google algorithm the terms are conceptually similar. In this instance Arnold J accepted that the situation was less straight forward but held that M&S still “used” the sign INTERFLORA in these circumstances.
Grounds of appeal include Arnold J’s innovative “significant section” approach
Three grounds for appeal were allowed by the Judge:
(i) the ruling that the onus should be on the advertiser to show that there is no real risk of confusion on the part of the average consumer as to the origin of the advertised goods or service;
(ii) the assessment of infringement by reference to a significant proportion of the relevant public;
(iii) the finding of infringement where the trade mark has not been selected as a keyword by the advertiser but an advertisement is delivered in response to a search incorporating a trade mark term as a result of broad matching on a different keyword.
Why this matters:
The case, as they say, continues, with the M&S appeal now pending.
Immediate practical impacts of the judgment
The Judge’s findings in this case were in the context of findings that the nature of the Interflora network may make it particularly difficult for the reasonably well-informed and reasonably observant internet user to determine if there was a connection between M&S and Interflora. However, the placing of the onus onto the advertiser to show that its advertisements do make clear to a significant proportion of the public that there is no connection between the advertiser and the trade mark owner does mean that continuing to place advertisements on search results pages in response to searches on competitor trade marks will have its risks.
The full Arnold J judgment is here.
