In a case that could change the way brands bid on search keyword advertising, a two-year legal battle between Interflora and M&S has reached another stepping stone, with both sides claiming victory- but Google may be the real winner…
In 2009, Interflora sued Marks & Spencer after the retailer bought its trade mark as a Google AdWord so that when an internet-user entered ‘Interflora’ into the search engine, an advert for Marks & Spencer Flowers would appear.
Yesterday, the European Court of Justice (ECJ) came down on the side of Interflora, although the judgment of the Court of Justice needs to be applied by the High Court in the UK to determine the question of Marks & Spencer’s liability. This is due in the course of 2012.
The ECJ said that trade mark owners can stop companies using their brands as triggers for adverts for competing products if that use “substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty”.
The Court has not defined exactly what would constitute an interference with that use, which it called the ‘investment function’ of a trade mark, but has said that it is for the High Court to rule on the specifics of the case.
Interflora said this judgment goes much further than previous rulings by saying that the use by a competitor of a keyword identical to the trade mark in relation to identical goods or services has an adverse effect on the investment in the trade mark where that use substantially interferes with the brand’s reputation and its ability to attract and retain consumers.
Michael Barringer, Interflora’s marketing director, said: “This judgment backs all the hard work and effort we have put in to defending the Interflora brand. People searching the internet for “Interflora” want “Interflora, the flower experts” and no one else.
“Our brand stands for quality and service and together with our network of independent florists, we have spent the last 80 years building this reputation.”
Trade marks – immitation or competition?
However, the ECJ said that trade mark owners were unlikely to be able to show that keyword use is a ‘dilution’ of a trade mark unless the keyword user is offering imitating, rather than competing, products.
Trade marks operate by their distinctiveness and trade mark law allows owners to take action against companies that use their brands in a way that makes them less distinctive.
The ECJ said, though, that keyword use was not likely to turn a trade mark into a ‘generic term’ in cases where two companies competed over the sale of the same kinds of goods.
The ruling could be seen as a boost for Google’s AdWords business model, by allowing a level of piggy-backing a brands reputation as part of normal competition on the Internet.
