In the latest in a series of legal challenges around internet keywords and particularly the Google AdWords system, the special adviser to the Court of Justice of the European Union, Advocate General Jaaskinen, has issued his opinion.
In Interflora v Marks & Spencer plc, Interflora allege that Marks & Spencer infringed the Interflora trademark by sponsoring the word "Interflora" as well as variants of the word with minor errors including "Intaflora", and "Inter-flora" as keywords in the Google AdWords system. The result was that advertisements for the Marks & Spencer flower delivery service appeared alongside the "natural" search results for Interflora. Interflora alleged that the use of the Interflora trademark is detrimental to their mark as it causes a blurring or dilution of their mark, which affects the ability of the Interflora mark to distinguish the goods and services of Interflora from those of its competitors. In addition, Interflora alleged that by using the Interflora's trademark, M&S are benefiting from the reputation of Interflora, and so gaining an unfair advantage.
The Advocate General considered a wide range of issues, in an opinion which contained a number of observations from which Interflora will take great encouragement. In particular he said:
"...in the case of a trade mark such as INTERFLORA which identifies a well-known commercial network of independent enterprises providing a special uniform service, i.e. delivery of flowers according to a standard procedure, the display of the name of another enterprise in a sponsored link is in my opinion likely to create the impression that the enterprise mentioned in the ad belongs to the network of undertakings identified by that trade mark.
47. Therefore, in my understanding, in addition to its registered meaning, the trade mark INTERFLORA has gained a ‘secondary meaning’ denoting a certain commercial network of florists providing a certain type of delivery service, and the reputation of that trade mark relates to or is identical with the positive associations this meaning has in the minds of the relevant circles of consumers.
48. Consequently, an association between the trade mark of Interflora and an identical delivery service of flowers provided by Marks & Spencer is possible and even likely in the mind of an average consumer seeking information about such services in the internet when faced with the following ad:
‘M&S Flowers Online
Gorgeous fresh flowers & plants. Order by 5pm for next day delivery.’
To my mind the display of the ad as a consequence of typing ‘interflora’ into a search engine creates in the context of this case an association that Marks & Spencer is part of the Interflora network."
However as well as offering encouragement to Interflora the Advocate General offered other observations which will be important for brand owners who do not own brands as distinctive or as well known as Interflora. He observed:
"45. In many cases display of commercial alternatives does not seem harmful for the origin function of the trade mark because the appearance of an ad in a sponsored link following the typing of a keyword identical with a trade mark does not create an association or a link between the trade mark and the good or the service promoted by the ad. As the Court has stated, the internet user may perceive the advertising links as offering commercial alternatives to the goods or services of the trade mark proprietor. This applies to identical or similar goods or services. The risk of error is even less likely in the case of different but related goods or services. This is the case, for example, if the trade mark chosen as a keyword relates to air travel and the ad displayed concerns car rental or hotel accommodation. Moreover, one of the blessings of the internet is precisely that it greatly enhances consumers’ possibilities to make enlightened choices between goods and services."
Here the suggestion is that simply displaying an advertisement following a keyword search will not of itself create an association with a trademark identical to the keyword. Instead the theme is one of commercial alternatives. The Advocate General accepts that a link might be made, in a trademark sense, between a keyword and a trademark, but only where the trademark is inherently highly distinctive. KODAK and indeed Interflora are offered as examples.
Where the keyword is not unique to a trademark, and "apple" and "diesel" are given as examples, the test of infringement lies in the content of the advertisement itself. When considering the "blurring" of a trademark as the basis for infringement he concluded:
"In my opinion, the use of third party trade marks as keywords in search engine advertising is detrimental to the distinctiveness of a trade mark with a reputation in cases of identical goods or services when the following conditions are met: the sign is mentioned or displayed in the ad in the sponsored link, and the marketing message or communication in the ad uses the sign in a generic sense to refer to a category or class of goods or services, and not as distinguishing between goods and services of different origins."
In other words an advertisement cannot use a trademark to indicate the kind of goods or services that a competitor might offer. The Advocate General considered that use in that way was liable to dilute the distinctiveness of the trademark.
It was also said that Marks & Spencer were taking advantage, without due cause, of the reputation of the Interflora brand. They were "free-riding" on the coat tails of the Interflora brand. The difficulty with this argument, as has been discussed in other cases, is that the essence of competition, and particularly when comparative advertising is used, is that there is always an element of taking advantage of the reputation of the more dominant or famous brand. The question is whether that advantage has been taken fairly. So far as motive is concerned, the Advocate General was quite clear:
"In this case Marks & Spencer endeavours to present itself as a commercial alternative to those customers who are either searching for information about Interflora’s services or about delivery services of flowers in general, remembering probably the best-known trade mark relating such services. It is obvious that in both cases Marks & Spencer is taking advantage of the repute of Interflora’s trade mark, as it is inconceivable that this selection of keywords could be explained with any other motive. Hence, the question that remains relates to the fairness of that use."
He concludes that so far as free-riding is concerned, the use is fair. Because the advertisements in question did not make reference to Interflora it was not riding on the coat tails of the Interflora brand. The justification for this conclusion was that well-informed consumers can make choices in accordance with their preferences. Referring to the need to promote competition he said:
"In the case of identical or similar goods or services, the purpose of presenting a commercial alternative to the goods or services protected by a trade mark with a reputation should count as due cause in the context of modern marketing relying on keyword advertising on the internet. Otherwise keyword advertising using well-known third party trade marks would be as such prohibited free-riding. Such a conclusion cannot be justified in view of the need to promote undistorted competition and the possibilities of consumers to seek information about goods and services. The point with market economy is, after all, that well-informed consumers can make choices in accordance with their preferences. I would find it inappropriate that the trade mark proprietor could prohibit such use unless he has reasons to object the ad resulting from typing of a search term corresponding to a keyword."
While Interflora will be delighted with the strong words of support, other brand owners are likely to be less enthusiastic. The opinion of the Advocate General brings to the fore the tension between the monopoly rights enjoyed by a trademark owner (which by definition restricts competition) and the principle of "undistorted competition" which underpins much of European law. We will have to wait and see whether the European Court follows the Advocate General's advice, but it usually does. In the meantime, while distinctive brands should have confidence in dealing with adverts for identical goods or services, where related goods are concerned, whether this will amount to trademark infringement will still depend on the facts of each particular case.