• Trademarks – Bad words for Adwords (Part 2)

Back in October 2010 we published the first part of this article speculating on how the Interflora v Marks & Spencer case might develop. On 21 May 2013 Mr Justice Arnold of the High Court issued judgement.

Background

To recap on the facts of the case, Marks & Spencer PLC (‘M&S’) used the registered trademark ‘Interflora’ as a keyword on Google Adwords, leading to members of the public being presented with adverts for the M&S flower delivery service.

Interflora sued M&S for trademark infringement on various grounds, including under Article 9(1)(a) of the Community Trademark Regulation (which corresponds to section 10(1) of the UK Trade Marks Act 1994). This law states that:

The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with the trademark in relation to goods or services which are identical with those for which the trademark is registered.

Judgement

The High Court referred various questions to the Court of Justice of the European Union (CJEU) and in 2011 the CJEU set out three factors that should be considered by Mr Justice Arnold when passing judgement in the case. These factors were:

1. Whether the ‘reasonably well-informed and reasonably observant Internet user’ was aware that the M&S flower delivery service was not part of the Interflora network.

» Mr Justice Arnold was not satisfied that this was generally known.

2. Whether the M&S advertisements enabled the ‘reasonably well-informed and reasonably observant Internet user’ to tell that the M&S flower delivery service was not part of the Interflora network.

» Mr Justice Arnold noted that there was nothing in any of the M&S advertisements to inform the reader that the M&S flower delivery service was not part of the Interflora network.

3. The nature of the Interflora network. A feature of the Interflora network is that members trade under their own names.

» Mr Justice Arnold noted that Interflora has commercial arrangements with several large retailers, and that this made it more likely that there could be a connection between the M&S flower delivery service and the Interflora network.

Taking these three factors into account Mr Justice Arnold held that the use by M&S of the Interflora trademark had an adverse effect on the origin function of the trademark, and that M&S had infringed the trademarks under Article 9(1)(a).

Confusion where there should be none?

In our 2010 article we speculated that the requirement for confusion (previously introduced in case law relating to Adwords) in relation to Article 9(1)(a) (UK equivalent s.10(1)) infringement might be relinquished. This was because under the wording of the statute an element of confusion is not required for infringement to be found under Article 9(1)(a) or the UK equivalent s.10(1).

However, the CJEU guidance to the High Court means that it is still necessary to compromise one of the ‘functions’ of a trademark for there to be a finding of infringement – in this case the origin function, i.e. such that there is confusion on the part of the public as to the origin of the goods/services.

Indeed, we note that in various recent trademark infringement cases it seems that the real-life context of the alleged infringement is being taken into greater account than it has previously been.

This means that even if someone does use (in relation to identical goods/services) a sign identical to a registered trademark then there might not be finding of infringement, contrary to the wording of Article 9(1)(a) and the UK equivalent s.10(1).

For example, if in the subject Interflora case, the circumstances surrounding Interflora’s commercial exploitation of its trademark had been different and were such that:

i) Interflora did not have commercial arrangements with several large retailers; and if:

ii) all of the delivery services were provided by Interflora-branded stores instead of through a network of members that traded under their own names.

then…Interflora might not have been successful against M&S as arguably the ‘origin function’ of the trademark would not have been compromised.

Indeed a trademark owner that has not used its registered mark might be in a stronger position to stop third-party use of identical marks compared to one that has used its mark. This is because the context of the owner’s use could not be taken into account when assessing infringement.

This contextual consideration of infringement does not only apply to alleged infringements relating to Adwords. It might also apply if a trademark is applied to product packaging, but the packaging makes it clear that the product is from a different source to the owner of the trademark. In such cases it is possible that there might be a finding of a non-infringement of a word mark registration (which is supposed to cover any way of writing the words) on the basis that there was no confusion as to origin.

This is perhaps an unhelpful muddying of the waters as to what constitutes an infringement under Article 9(1)(a) and the UK equivalent s.10(1). It seems as though the wording of these provisions has been tainted with the ‘confusion’ clause of Article 9(1)(b) and s.10(2) such that they are interpreted as:

The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with the trademark in relation to goods or services which are identical with those for which the trademark is registered…and where there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark.

In our opinion this is an unwelcome weakening of the rights afforded by a registered trademark.

Summary

It is apparent that the Interflora case does not put an end to use of competitors’ trademarks as keywords in Adwords, particularly if it is made clear in the advert that the goods/services offered are not related to those of the trademark owner, or perhaps if the use made of the trademark by its owner is clearly defined and there is little chance of confusion.

However, even if an advert were to contain some form of clarification as to the true origin of the goods/services, caution should still be exercised when using a competitor’s trademark in an Adwords campaign, as when assessing a possible infringement the entire context of the use of the trademark is likely to be taken into account.