Interflora is currently suing Marks & Spencer over the latter’s use of INTERFLORA (a registered trade mark) as a Google AdWord. Entering “Interflora” as a search term in the Google search engine yields Marks & Spencer’s website as a sponsored result, shown separately to the main search results. In the High Court, Arnold J referred a number of questions to the Court of Justice of the European Union (“CJEU”).
On 24 March the Advocate General (“AG”) rendered his opinion on the questions referred. The AG’s opinion is not binding on the CJEU, but is followed in a majority of cases. As we explain below, whilst (in dealing with two separate heads of infringement) the AG’s opinion was favourable to M&S (and, by extension, other AdWord users) on one, and favourable to Interflora on the other, Interflora only needs to win on one in order to score an overall victory.
The AG dealt with two issues. First, the position under Article 5(1)(a) of the Trade Marks Directive/Article 9(1)(a) of the CTM Regulation i.e. use of an identical sign in respect of identical goods/services for which the mark is registered. This was previously considered by the CJEU in the Google France case. The AG repeated what was said in Google France:
“The proprietor of a trade mark is entitled to prohibit such conduct … in the case where that ad does not enable an average internet user, or enables said user only with difficulty, to ascertain whether the goods or services referred to in the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or from a third party.”
However, the AG also noted that:
“in the case of a trade mark such as INTERFLORA which identifies a well-known commercial network of independent enterprises providing a special uniform service, i.e. delivery of flowers according to a standard procedure, the display of the name of another enterprise in a sponsored link is in my opinion likely to create the impression that the enterprise mentioned in the ad belongs to the network of undertakings identified by that trade mark.”
Accordingly, he recommended that the CJEU should hold that:
“An error concerning the origin of goods or services arises when the competitor’s sponsored link is liable to lead some members of the public to believe that the competitor is a member of the trade mark proprietor’s commercial network when it is not. As a result of this the trade mark proprietor has the right to prohibit the use of the keyword in advertising by the competitor in question.”
In our view, the AG probably went beyond the scope of the referral when saying that the sponsored link “is in my opinion likely to create the impression that the enterprise mentioned in the ad belongs to the network of undertakings identified by that trade mark.” The CJEU is not supposed to make findings of fact, and ought to leave that to the national courts. However, in the trade mark case of Arsenal v Reed, the ECJ itself arguably went beyond the scope of the referral and made a finding of fact. When the case was returned to the High Court, Laddie J refused to apply the finding, but was overruled on this by the Court of Appeal. If the CJEU makes a finding of fact that M&S’s use of INTERFLORA is, in the circumstances, likely to cause confusion, the likelihood is that this will be binding on the parties when the matter is remitted to the High Court.
In such circumstances, it would still be open to other AdWord users, in subsequent proceedings, to provide their own evidence to contradict the allegation of confusion (findings of fact in one case are not automatically binding in others), but it could be an uphill struggle. Even if no finding of fact is made, if the CJEU adopts the AG’s recommended legal analysis, that is clearly still favourable to Interflora.
The AG then dealt with the position under Article 5(2) of the Trade Marks Directive/Article 9(1)(c) of the CTM Regulation i.e. use of an identical or similar sign to a trade mark with a reputation, where that use takes unfair advantage of or is detrimental to the distinctive character or repute of the mark. The AG said that in his opinion, no such unfair advantage/detriment could occur unless the registered trade mark is used in the advert in the sponsored link, and advised that the CJEU holds that the law is as such. M&S does not use the term “interflora” in its ads. Accordingly, this part of the opinion is favourable to M&S (although, as we say above, Interflora only needs to win on one argument).
How does this affect you?
As we say above, the AG’s opinion is not binding, and the CJEU may therefore adopt a different legal analysis. On the assumption that it follows the AG’s opinion, however, the decision may be interpreted by the English courts as applicable only to the fairly unusual facts of the case (i.e. a commercial network of independent enterprises trading under a common name). It may, on the other hand, be interpreted more expansively. Our recommendation at this stage is that:
- AdWord users bidding on a name of a commercial network should consider gathering some evidence to explore whether their use of a competitor’s registered mark as Google AdWords does, in fact, lead members of the public to believe that there is a connection between themselves and their competitor. In the first instance, this could be done as an informal survey, following which further, more formal evidence may be required; and
- If you are part of a commercial network trading under a common name, and are concerned about competitors bidding on that name, whereas it may be premature to commence proceedings pending the CJEU’s ruling, it would be worthwhile putting those competitors on notice of your intention to sue, pending a favourable ruling.
If you wish to discuss the implications of this decision, or how it may affect you, please let us know.