Interflora keywords case sent for retrial

December 8, 2014

In an unusual decision, the Court of Appeal has sent the Interflora v Marks and Spencer keywords advertising trade mark case back to the High Court for a retrial.

The court ruled that the trial judge used the wrong tests and had also made errors of procedure and in interpreting the evidence.

Background

Interflora successfully sued Marks & Spencer (M&S) for use of the word INTERFLORA as an advertising keyword leading search engine users to advertisements for M&S's flower delivery service.

The original decision, when the court awarded Interflora an EU-wide injunction, was based on the assessment that a significant proportion of consumers who searched for "interflora", and then clicked on M&S'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.

Court of Appeal decision

Onus of proof

The Court of Appeal decided that the judge had wrongly held that the onus lay on the advertiser to show that the use of the mark was sufficiently clear that there was no risk of confusion on the part of the average consumer.

Instead, the test in the context of keyword advertising was whether the advertisement did not enable normally informed and reasonably attentive internet users, or enabled them only with difficulty, to ascertain whether the goods or services referred to in the advertisement originated from the trade mark proprietor.

Initial interest confusion

The Court of Appeal also decided the judge had wrongly used a US legal doctrine of “initial interest confusion”, which considered confusion arising from use of a mark in promotional or advertising materials. The Court said that the doctrine was an unnecessary and potentially misleading gloss on the tests the European Court had articulated and should perform no part of the analysis of EU national courts.

The European Court acknowledges that keyword advertising is not inherently objectionable because its purpose is to offer internet users alternatives to the goods or services of the trade mark proprietors. The court was required to consider whether the advertiser had enabled an average consumer to ascertain the origin of the advertised goods or services, and so make an informed decision. It was not the duty of internet advertisers to avoid confusion.

Procedural irregularities and errors on evidence

It was reasonable for the judge to use academic papers as evidence. However, he was wrong to attach weight to a statement of opinion of Mr Rose, an employee of the online marketing company which managed Interflora's keyword advertising (and not an expert), given that he had ruled during the trial that he would not do so.

Meanwhile, the judge gave little weight to another report that illustrated that people who had first searched for "interflora" were much more likely to visit the Interflora website after the M&S flowers website than those who arrived at the M&S flowers website without having first searched for "interflora". That was entirely consistent with the proposition that users who arrived at the M&S flowers website after searching for "interflora" were more interested in Interflora than those who arrived at the M&S flowers website without first carrying out such a search.

Average consumer

In deciding trade mark infringement and whether there is a likelihood of confusion, the assessment is from the perspective of the “average consumer”.

While the judge was right to suggest that confusion on the part of internet users who were ill-informed or unobservant must be discounted, that formulation ran the risk of setting the bar on infringement too low. It was only the effect of the advertisements on internet users who were reasonably well-informed and observant that must be taken into account.

Negative matching

At the hearing to consider the form of the injunction to be granted to Interflora, the parties disputed the scope of M&S's infringing activities. In particular, Interflora complained that, in addition to bidding on the keyword "interflora" or phrases involving it, M&S had also bid on other generic flower-related terms without negatively matching the word "interflora". ("Negative matching" allows advertisers to specify search terms in response to which their advertisements will not appear.)

The Court of Appeal held that this conduct might be characterised as use by M&S of the mark "interflora" for trade mark infringement purposes. If the court concluded that the object and effect of M&S's activities was to trigger the appearance of its advertisements in response to searches for "interflora" then that would justify a finding that M&S had used the sign "interflora" as a matter of trade mark law. However, this would not by itself be sufficient to establish infringement because it must also be shown that the advertisements did not enable the average consumer to ascertain whether the goods or services referred to originated from Interflora or from M&S

Comment

The decision will be of concern to brand owners, particularly towards the luxury end of the market. However, online retailers and arguably consumers are likely to view it more favourably. Overall the advantage in the proceedings now lies with advertisers, like M&S, as the case puts more pressure on a brand owner to prove that its trade mark has been affected.

The judgment also emphasises the Court’s view that trade mark law should not be used to restrain fair competition.

We await further developments in this long running case.


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