European Court of Justice ruling in INTERFLORA v M&S keyword case

October 18, 2011

The European Court of Justice (“ECJ”) has given its long awaited judgment in the advertising “keyword” case between Marks & Spencer plc and Interflora.

The original reference from the English High Court was made in June 2010 in relation to the case brought by Interflora against M&S.

Background

Interflora, the international flower delivery network, sued M&S for trade mark infringement on the basis of M&S’ use of the word “Interflora” as an advertising keyword leading Google internet search engine users to advertisements for M&S’ flower delivery services.

The ECJ followed its approach in previous cases and confirmed that M&S’ selection of Interflora as a keyword was “use” of Interflora’s trade mark, but such use would only be restricted if it had an adverse effect on one of the functions of the trade mark.

Third-party use of a mark as a keyword can be prevented if this takes unfair advantage of the distinctive character or repute of the trade mark (free-riding) or causes detriment to that distinctive character (dilution) or repute (tarnishment).

Functions

The ECJ observed that the trade mark’s function of indicating origin would be infringed if the keyword advertisement does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to in the advertisement originate from the proprietor of the trade mark, an undertaking economically linked to it, or from a third party.

This means that M&S’ use of Interflora as a key word will infringe Interflora’s trade mark if the High Court considers that “the display of M&S’ keyword may lead users to believe, incorrectly, that the flower-delivery service offered by M&S is part of Interflora’s commercial network.”

In this respect, the ECJ considered that the High Court may have regard to the fact that Interflora’s network comprises a large number of retailers which vary greatly in terms of size and commercial profile. Therefore, it may be particularly difficult for an internet user to determine whether M&S is part of the network.

Advertising function

The ECJ stated that use of another’s trade mark in a referencing service such as Google’s AdWords does not adversely affect the advertising function of the trade mark.

Investment function

The most significant part of the judgment appears to be the ECJ’s indication that "substantial interference" with the so-called "investment function" of a mark (that is, the purpose of acquiring and preserving a commercial reputation) constitutes infringement.

There will be an infringement of the trade mark where the use of a keyword identical to the proprietor’s trade mark “substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting customers and retaining their loyalty”.

However, the ECJ added a proviso that such use cannot be prevented if it offers an alternative to that proprietor's goods or services, without offering a mere imitation of them, causing dilution or tarnishment, or adversely affecting the functions of the trade mark.

Consequences

There is some good news for trade mark owners as the ECJ did stress that all functions of a trade mark are protected, even for trade marks that do not have a reputation. The comments with regard to the investment function are interesting and should provide some comfort to trade mark owners that they can safely invest in their trade marks and images to attract the commitment of customers and this function will be protected.

The true effect of this ruling on trade mark law in the UK will not be clear until the High Court comes to apply the guidance, as the ECJ has for the most part declined to comment on the application of these principles to the facts of the Interflora proceedings.


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