Advocate General Rules on Interflora vs M&S in Brand Bidding Case

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  • March 24, 2011
Patrick Altoft

Patrick Altoft

Director of Strategy

Way back in December 2008 a story broke about how Interflora was taking legal action against Marks & Spencer for bidding on the keyword “interflora” using Google AdWords.

The story has received lots of mainstream coverage over the last two years with even the BBC picking up on the story last October.

Today the Advocate General has issued his Opinion on the matter and found in favour of Interflora. If the Court of Justice of European Union follows the recommendation of the Advocate General (which happens in the majority of cases) then this case could well result in the end of trademark bidding across the EU.

The full statement can be found here.

In view of above analysis I propose the following replies to the High Court of Justice of England and Wales, Chancery Division:

(1) Article 5(1)(a) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks and Article 9(1)(a) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark must be interpreted as follows:

– A sign identical with a trade mark is used ‘in relation to goods or services’ within the meaning of these provisions when it has been selected as a keyword in connection with an internet referencing service without the consent of the trade mark proprietor, and the display of ads is organised on the basis of the keyword.

– The proprietor of a trade mark is entitled to prohibit such conduct under abovementioned circumstances, in the case where that ad does not enable an average internet user, or enables the 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.

– 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.

(2) Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94 must be interpreted as meaning that the use of a sign as a keyword in an internet referencing service in relation to goods or services identical to those covered by an identical trade mark with a reputation also falls within the scope of application of those provisions and it can be forbidden by the trade mark owner when

(a) the ad shown as a result of the internet user having typed as a search term the keyword identical with a trade mark with a reputation mentions or displays that trade mark; and

(b) the trade mark

– is either used therein as a generic term covering a class or category of goods or services;

– or the advertiser attempts thereby to benefit from its power of attraction, its reputation or its prestige, and to exploit the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark.

(3) The fact that the internet search engine operator does not permit trade mark proprietors in the relevant geographical area to block the selection of signs identical to their trade marks as keywords by other parties is as such immaterial in so far as the liability of the advertiser using of the keywords is concerned.

In my opinion this is a win for common sense. Loads of people bid on competitors trademarks but nobody in the industry really likes it. Most brands get upset not by the leakage of traffic (although this is a big problem) but by the increase in AdWords bid prices caused by multiple competitors bidding on your own brand name.

The combination of increased bids for the brand and customer leakage to competitors means that the brand is always the loser and Google is the only real winner.

Both Marks & Spencer and ASDA are still bidding on the keyword as you can see in the screenshot below.

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