Interflora wins long running keyword dispute against M&S

United Kingdom

Khurram Aziz - News Editor

Interflora has won a five-year legal battle against UK retailer Marks & Spencer (M&S), after a judge ruled that using a rival's trademark in search engine keyword advertising amounted to infringement.

In his decision, Judge Richard Arnold said that M&S' use of the ‘Interflora' trademark as a Google AdWord to advertise its M&S Flowers and Gifts website misled customers into thinking the two were affiliated.

"A significant proportion of the consumers who searched for ‘interflora' and the other signs, and then clicked on M&S's advertisements displayed in response to those searches, were led to believe, incorrectly, that M&S's flower delivery service was part of the Interflora network," the judge said in his written ruling.

Interflora sued M&S in 2008 for violating its trademark rights in the UK. In 2009, the court sent the case to the Court of Justice of the European Union (CJEU) for guidance on how to interpret the bloc's trademark rules for internet search advertising.

In 2011 the CJEU said that a rival, such as M&S, could use Interflora's marks as search engine keywords as long as that use does not jeopardise "the maintenance by Interflora of a reputation capable of attracting consumers and retaining their loyalty".

The case was then sent back to the UK for a final ruling.

Rhys Hughes, president of Interflora's British unit, welcomed the decision. He said, "Keyword advertising is a very powerful tool and so it is vital for consumer protection that internet search results take consumers directly to the brands they are looking for."

Google's AdWords has been controversial with trademark owners from the start and it is by far the search giant's biggest source of income, earning it an estimated $42.5bn in 2012.

Companies such as Louis Vuitton in Europe and Rosetta Stone in the US have sued Google for allowing their competitors, and in some cases counterfeiters, to use their trademarks to return their websites to the top of search results.

In 2010, the CJEU ruled that Google had not infringed French luxury goods maker Louis Vuitton's trademark rights by allowing advertisers to buy keywords corresponding to its marks. In the same year, language software company Rosetta Stone also lost a case in the US District Court over Google's AdWords policy. Rosetta Stone appealed and the pair eventually reached an undisclosed settlement in November last year.

The trend against brand owners in search engine keyword cases has continued this year when in February an Australian court ruled that Google is not responsible for the content of third-party advertisements displayed in web searches. The ruling ended a six-year legal battle in which the Australian Competition and Consumer Commission had argued Google was responsible for sponsored links that suggested an association between advertisers and rival firms. The win led Google to announce that it will not prohibit the sale of keyword trademarks to anyone across the world.

In all cases, Google as the service provider was vindicated. However, the courts have also come down against trademark owners suing rival websites directly for buying their marks as search terms.

After losing the High Court decision, M&S said in a statement, "We are disappointed by today's judgement [and] are considering our position and all the options available to us."

The case will return to court later in the year to determine how much M&S must pay Interflora in damages and costs. Each party may also seek permission to appeal.

Anthony Trenton, partner at law firm Dentons said, "This is a highly significant decision because the court held that the use of the Interflora mark in keyword advertising amounts to trademark infringement. 

"However, the facts are very specific to the case because Interflora is a network, and it is possible that M&S could be a member.  The court decided that a significant proportion of the public would think that M&S was part of the Interflora network.  The reasonably well-informed and reasonably observant internet user would not generally know or be able to tell from the M&S advertisements that it is not a member.  This does not mean that the use of a competitor's mark in keyword advertising will necessarily be trademark infringement".