The High Court of England & Wales has ruled that the use by the well-known British retail chain Marks&Spencer of the INTERFLORA brand (in respect of which the latter had – with a view to advertising its florist service – bought advertising space from Google’s AdWords) constitutes trademark infringement.
In summary, the High Court held that
…..the M & S advertisements which are the subject of Interflora’s claim 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 [Interflora] Trade Marks, or an undertaking economically connected with it, or originated from a third party.
The High Court was of the opinion that a significant proportion of the consumers who searched for the word INTERFLORA and then clicked on M&S’s advertisements was misled into thinking that M & S’s flower delivery service was part of the Interflora network.
The High Court held, therefore, that Marks & Spencer’s use of the INTERFLORA trade mark had an adverse effect on the source function of such mark and consequently infringed Interflora’s rights thereover pursuant to Article 5(1)(a) and Article 5(2) of the Trade Marks Harmonisation Directive 89/104/EEC and Article 9(1)(a) of Community Trade Marks Regulation (EC) 207/2009.
The core of the case at hand (and of all trademark infringement cases) was the question of what exactly is the average consumer, which the High Court considered to be not particularly technically literate, possessing no precise knowledge of how AdWords operates and having no awareness aware of the legal issues involved in terms of risk of confusion.
The High Court held that the test to be applied in the case at hand, in terms of the risk of confusion, was the following
1. The source function of a trade mark (i.e. the identification of goods of services coming from a given undertaking on the basis of the trademark which is used in relation to such goods and services) was adversely affected by keyword advertising if the advertisement in question (which, in the case at hand, consisted in the appearance of adverts promoting the defendant’s flower deliverf service after users had entered the term INTERFLORA on google) did not manage to allow reasonably well-informed and reasonably observant internet users (or allowed them to do so only with difficulty) to ascertain whether the advertised goods or services originated from the trade mark proprietor (or an economically-connected undertaking) or from a third party;
2. A risk of confusion between the claimant’s and the defendant’s trade marks would be created in the event that the advertisement caused a significant section of the relevant class of persons (i.e. reasonably well-informed and reasonably observant internet users) to wrongly believe that the advertised goods or services (i.e. M & S’s flower delivery service) were connected to the trade mark proprietor’s flower delivery network (and M & S’s advertisements did nothing to ensure that users ascertain that the companies were in no way connected).
3. Many internet users in the UK did not appreciate the distinction between the natural search results and the paid advertisements on Google’s search results page (unlike the natural search results, advertisements appear in the search engine results because the advertisers have paid for the advertisements to be triggered by a keyword consisting of – or related to – the search term entered by the user).
The Interflora case is also the first English case to apply the European Court of Justice’s guidance in relation to the investment function of a trade mark (which is adversely affected where the third party’s use affects a mark’s reputation and thus jeopardizes its maintenance), interpreting this to mean that – in the event that the origin of a third party’s keyword advertising is unclear – the trade mark’s image is damaged, with the result that the trade mark’s origin and investment functions are both damaged.
The High Court concluded, in the case at hand, that:
1. Reasonably well-informed and reasonably observant internet users could not be deemed to have been aware, at the time of the complained infringing activities in May 2008 that M & S’s flower delivery service was not part of the Interflora network, but was in competition with it since there was nothing in any of M & S’s advertisements that enabled reasonably well-informed and reasonably observant internet users to ascertain this;
2. The fact that the Interflora network allows members to trade under their own names and that Interflora has commercial tie-ups with several large retailers, made consumer’s belief that there was a connection between M & S’s flower delivery service and the Interflora network all the more plausible.
The High Court ruled, therefore, that Marks&Spencer had infringed the claimant’s INTERFLORA brand, undermining the distinctive character and reputation thereof.
M&S can appeal against the high court decision and a further hearing will decide the level of damages M&S will have to pay.
This ruling could lead to more cases brought by businesses where rivals’ adverts appear above their own links on Google’s search engine.