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Interflora wins trade mark infringement case against Marks & Spencer

Interflora wins trade mark infringement case against Marks & Spencer

Friday 31st May 2013

Interflora and Marks & Spencer have been locked in a legal battle for the past five years after M&S bought the keyword ‘INTERFLORA’ on Google’s AdWords (although did not use the term INTERFLORA in its ad text).  This resulted in the M&S website appearing above Interflora’s site when the term INTERFLORA was searched. Interflora claimed that M&S’s actions constituted trade mark infringement.  Lord Justice Arnold at the UK High Court confirmed that M&S’s actions had an ‘adverse effect on the origin function of the trade mark’ and that, following the previous ruling by the Court of Justice for the European Union (CJEU), they had therefore infringed Interflora’s trade mark.

Last year, CJEU handed down its decision that the purchase and use of third party trade marks as keywords would be an infringement if it adversely affected one of the functions of a trade mark, including in particular the “origin function” (the essential function of indicating the origin of the product or service covered by the trade mark) or one of the other functions of the mark, such as that of guaranteeing the quality of that product or service or that of communication, investment or advertising.

CJEU had already determined that the use of third party trade marks as keywords does not have an adverse effect on the advertising function of the trade mark, as the proprietor remains entitled to purchase the its own trade marks as a keyword, and its online presence is likely to appear in the natural lists of any search results in any event, meaning that the visibility of the proprietor to internet users of the relevant goods and services searching for the trade mark should be guaranteed. CJEU also determined that the investment function was only adversely affected if the alleged infringing use of the trade mark as a keyword “jeopardises the maintenance of a reputation capable of attractive consumers and retaining their loyalty”. The UK court added that an example of this was where the image conveyed by the trade mark is damaged.

CJEU did not determine whether the functions of the trade mark ‘INTERFLORA’ was adversely affected factually in this specific case as this was a matter for the UK national high court. Following submission (and in some cases, exclusion) of the evidence relied upon by both parties, Arnold LJ considered a number of points in his decision, consolidating the existing case law and summarising recent rulings of CJEU. The court had to assess the position from the perspective of the average consumer who is deemed to be reasonably well-informed and reasonably observant and circumspect. The court determined that in doing so it was not required (as argued by M&S) to apply a specific “single meaning” to the use of the sign in context.

Arnold LJ summarised the existing case law established that “the origin function of a trade mark 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 proprietor or from a third party”. Further, it is the advertiser’s responsibility to ensure that “there is no real risk of users being confused”.  Given the nature of the average consumer, any confusion on the part of ill-informed or unobservant internet users (who are likely to make up a small minority) is to be discounted.

In the present case, it was important to understand the way in which Interflora operates. Interflora has over 1,500 members.  Members retain their own business name but use the Interflora branding to indicate that they are able to take and fulfil Interflora orders.  Therefore, the reasonably well-informed user and searcher of the term ‘Interflora’ would appreciate that a florist may operate under their own name and in parallel with the Interflora brand.  M&S was not a member of the Interflora network.

Arnold LJ said that 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 advertisements enable such a user to ascertain this.

In the light of the above, Arnold LJ determined whether M&S’s actions had an adverse affect on the Interflora trade marks.

  • Arnold LJ held that M&S’s actions had an adverse effect on the origin function of the mark.  He noted that M&S’s advertisements 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.”
  • Arnold LJ did not consider that Interflora had demonstrated that M&S’s keyword advertising had an adverse effect on the reputation of the Trade Marks, such as damage to their image, accordingly there was no adverse affect on the “investment function”.
  • Arnold LJ also held that, other than the adverse affect on the origin function of the mark on which Interflora had already been successful, there was no additional circumstances which would give rise to a successful claim:
  • that there had been dilution, wherein there mark was used in a way that would lessen its uniqueness or distinctive character.
  • that M&S were taking unfair advantage of the distinctive character and repute of their mark without due course.

Arnold LJ therefore concluded that M&S had infringed Interflora’s trade marks because they had an adverse effect on the origin function of the trade mark.’

Arnold LJ noted that in the closing submissions, counsel for M&S argued that M&S had simply been engaged in targeted advertising. Arnold LJ accepted this may be the case, but such targeted advertising is only lawful if it complies with the criteria set out by CJEU.  Arnold LJ wondered why M&S had not sought to defend its actions as an example of comparative advertising – in providing customers who have expressed an interest in ordering flowers for delivery with an alternative service. M&S did not raise this defence but rather took the position that the use of the keyword was not an example of comparative advertising. Arnold LJ was not convinced this was correct and pointed to other cases in the courts of other EU member states, at least one of which had previously held that keyword advertising is an example of comparative advertising. However, as M&S had not raised this as a defence it was not necessary for the UK court to consider it. In addition, certain criteria have to be met for lawful comparative advertising (including with a view to avoiding trade mark infringement). M&S may have felt that they did not satisfy this criteria and as such felt it was not worth running this argument.

The case is due to go to court later this year in order to decide the extent of damages and costs that M&S will have to pay unless the parties settle this issue in advance.

The case will now be used as the leading precedent for future cases involving the use of other proprietors’ marks as keywords.  The case succinctly and helpfully summarises the law on trade mark infringement generally (as well as in relation to keywords specifically). It also sets out the meaning of the “adverse effect on one of the functions of a trade mark” test set by CJEU for an infringement to have taken place. Going forward, given this decision, traders need to be very careful when using third party trade marks without consent in keyword advertising. While it may be possible to use comparative advertising as a defence, in order to do so the advert under the sponsored link would need to comply with any comparative advertising regulations.

Interflora, Inc and Interflora British Unit v Marks and Spencer plc and Flowers Direct Online Limited [2013] EWHC 1291 (Ch)