Trademarks and Adwords

Before 2008, Google operated a specific policy relating to AdWord’s. When a trade mark owner informed Google that a particular word was registered as their trade mark, Google would then block all attempts by third parties who were trying to purchase this keyword. This meant that if the third party wished to then use that word within the AdWords service they would have to contact the trade mark owner in order to seek their permission.

This policy was altered by Google on the 5^th May 2008. More specifically, Google decided to abandon the policy which allowed trade mark owners to block the purchase of trade marks as keywords in the UK and Ireland; however it should be noted that they continued to permit the blocking of registered trade marks in the advertisement when used via hyperlink or via the text.

On the 4^th April 2008, Google decided to email their customers outlining the change of policy regarding registered trade marks. Unsurprisingly, this email provoked certain Google customers to revise the way in which they used the service and this policy change ultimately became the catalyst for this fierce dispute between Interflora and M&S.

Just 2 hours and 26 minutes after Google’s email was received, an employee from the M&S online marketing department replied:

“We are reading this thinking how we can nick traffic from the opposition cheaply, admit it. (Interflora, Interflora!)”.

This response demonstrates the key issue which arose from Google’s policy change. No sooner had they sent this email, M&S began to explore potential avenues to exploit Interflora’s trade mark and did so by bidding on “Interflora” and several combinations of “Interflora”. This strategic move by M&S proved profitable and, to be precise, yielded revenue of £1,809,501.

However, Interflora refused to become victims of this policy change and instantly sent a letter alleging trade mark infringement and passing off. Legal proceedings commenced on the 3^rd December 2008, with Interflora claiming that the use of the signs by M&S affected (or was liable to affect) the origin and investment functions of its marks.

Although it was common ground that keyword advertising is not inherently or inevitably objectionable from a trade mark perspective, and the case law of the CJEU recognises that, as a general rule, keyword advertising promotes competition, Arnold J. found that the M&S advertisements:

“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 [Interflora], or an undertaking economically connected with [Interflora], or originated from a third party.”

In the judge’s view:

“A significant proportion of the consumers who searched for ‘interflora’ and 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. Thus M&S’s use of the Signs had an adverse effect on the origin function of the trade marks.”

The decision provided here is undoubtedly good news for brand owners. It is a reasonable possibility that this case will be referred to the Court of Appeal and the outcome will hinge on whether the CA takes a more generous view of the average internet user’s knowledge of the market and appreciation of how sponsored links work.

Many anticipated M&S to rely on Comparative Advertising within their defence, as it could be argued that they were simply trying to offer an alternative service to that of Interflora, and this would therefore be in compliance with Art.4 of the Misleading and Comparative Advertising Directive (2006/114). As the defence did not arise there was no reason for Arnold J to analyse the potential outcome, nevertheless, if M&S’s devious strategy was ever imitated in the future it would be interesting to see whether this defence is deemed worthy.

Harry Jeffries, Law Student.