03/05/2011
By Simon Bennet, Partner in the Commerce & Technology department at Fox Williams LLP
The Advocate General of the European Court of Justice has ruled on the dispute between Interflora and M&S Marks & Spencer) over the use by M&S of INTERFLORA as a key word search term in Google’s Adword Service.
Google’s Adword service enables an advertiser to purchase a term that is then displayed as “sponsored link”, above the regular search results when a user searches that term in a browser. This enables advertisers to gain an advantage over competitors because, by positioning the link as the first search result, the consumer will click on the link. For example, by typing in “hotel in London”, sponsored links appear that direct the user to a particular hotel or travel agency. Every click on the sponsored link results in a revenue payment from the advertiser to Google.
Recently, advertisers have extended their practice of selecting generic words such as “hotel” as Adwords to trade marks such as “Louis Vuitton” and now INTERFLORA when they are not Louis Vuitton or INTERFLORA, but are competitors. Previously the Court held that Google itself is not liable for the sale of terms protected by trade marks as Adwords and this case concerns the liability of the advertiser.
In this case, M&S purchased the word INTERFLORA as an Adword, which meant that a consumer, when entering the search term INTERFLORA, would get M&S’s on-line flower service as a sponsored link.
INTERFLORA, was understandably upset by M&S’s use of its trade mark for those purposes. To add insult to injury, M&S had bought the term in the run-up to Valentine’s Day.
The Advocate General of the European Court, after a careful analysis, held that the use by M&S, of INTERFLORA as a search term in an internet referencing service was trade mark use. He went on to say that trade mark owners are entitled to prohibit such conduct, where an internet user can only with difficulty, ascertain whether the goods or services referred to in the ad originate from the trade mark owner.
He also said that where a mark such as INTERFLORA has a big reputation, the trade mark owner can prevent the use of its mark as a key word because the use of the trade mark exploits that reputation.
Unfortunately, this is not an end to the story as the Advocate General’s opinion is not binding and is only a pre-cursor to the full European Court of Justice ruling, which will either confirm this view or will rule differently.
That said, if the ECJ does follow the Advocate General, this does provide some hope for owners of trade marks that are used to advertise rival products; namely that in certain situations such use is unlawful and can be prevented.
Simon Bennet is a Partner in the Commerce & Technology department at Fox Williams LLP. He can be contacted at sbennet@foxwilliams.com or 0207 614 2522
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