A Rose by any other name?
If Google had set out to increase their revenues, annoy brand owners and rewrite international trade mark law in one fell swoop, their 2008 change of policy on Adwords has been a triumphant success. Prior to that date they did not allow companies to bid on their rivals’ registered trade marks as keywords in sponsored links. Once they changed policy, advertisers seized the opportunity to drive traffic to their sites using their competitors’ trade marks.
Brand owners were now forced to bid on their own trade marks, just to ensure that they came top of relevant searches. Worse, they feared it would increase consumers’ tendency to use trade marked terms as the generic names for goods or services, and so dilute their value.1 Litigation, predictably, followed.
As the evidence in Interflora v. Marks & Spencer shows, Marks & Spencer showed almost indecent haste in adapting to the changed policy in order to increase their market share in the cut flower market:
Google notified its advertiser customers of its change of policy with regard to keywords corresponding to trade marks by email on 4 April 2008, that is to say, a month before implementing the change. The email provoked considerable interest at M & S… [M & S witness] Mrs MacMillan’s reaction… was that, as she put it in an email sent from her home just 2 hours and 26 minutes after the Google email arrived, “we are reading this thinking how we can nick traffic from the opposition cheaply, admit it. (Interflora, Interflora!)”.
Interflora fought back with a legal action which has already scored a referral to the Court of Justice of the European Union and an interim judgment on the admissibility of survey evidence. The long and thoughtful judgment of the Hon Mr Justice Arnold, handed down on 21 May 2013, is unlikely to mark the end; Marks & Spencer have already stated that they plan to appeal.
Arnold J. carried out a careful review in his judgement of the case-law to date. He examined how the tests of “the average consumer” and “the reasonably well informed and reasonably observant internet user” (terms he determined to mean the same in practice) applied to the situation where a consumer types “interflora” into a Google search and is offered a link to Marks & Spencer’s flower delivery service.
“Likelihood of confusion” is an essential element of trade mark infringement. Marks & Spencer argued for a “single meaning” test; that is, that that everyone had to interpret the alleged infringer’s use of the mark in question in the same way before the court could find a likelihood of confusion.
Arnold J. analysed the case-law and found the following:
It can be seen from this review of the Court of Justice’s early case law in this field that, even as it was propounding the average consumer test, the Court held that (a) a trade mark may be distinctive only to a proportion of the relevant class of persons, (b) there is a likelihood of confusion if there is a risk that the public might believe that the goods or services come from the same or economically-linked undertakings and (c) it is relevant for the national court to consider whether the description, trade mark or promotional statement in issue is liable to mislead or confuse a significant proportion of the relevant class of persons.
Next, he went into some detail as to how likely confusion had to be:
This is not a binary question: is the average consumer confused or is the average consumer not confused? Rather, it requires an assessment of whether it is likely that there is, or will be, confusion, applying the standard of perspicacity of the average consumer. It is clear from the case law that this does not mean likely in the sense of more probable than not. Rather, it means sufficiently likely to warrant the court’s intervention. The fact that many consumers of whom the average consumer is representative would not be confused does not mean that the question whether there is a likelihood of confusion is to be answered in the negative if a significant number would be confused.
Then he applied his reasoning to key word searchs and sponsored links:
For the reasons discussed above, I consider that the case law establishes the following principles:
i) The origin function of a trade mark is adversely affected by keyword
advertising triggered by the trade mark if the advertisement does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the advertised goods or services originate from the trade mark proprietor (or an economically-connectedundertaking) or from a third party.ii) The onus lies upon the advertiser to ensure that the advertisement does enable such users to ascertain this without difficulty and hence that there is no real risk of such users being confused.
iii) It is not sufficient to establish an adverse effect that some internet users may have difficulty in grasping that the advertised goods or services are independent of the trade mark proprietor. Confusion on the part of ill-informed or unobservant internet users must be discounted.
iv) If the advertisement causes a significant section of the relevant class of persons wrongly to believe that the advertised goods or services are connected to the trade mark proprietor, that does establish an adverse effect. Thus there is no single meaning rule.
v) In the context of the present case, it is relevant to consider whether the reasonably well-informed and reasonably observant internet user is aware that M & S’s flower delivery service is not part of the Interflora network and, if not, whether M & S’s advertisements enable such a user to ascertain this.
Even if this judgement withstands an appeal it does not mean that using third party trade marks in sponsored links has been outlawed. Arnold J. was careful to point out that the Court of Justice of the European Union had refused on several occasions to find that such use is inherently infringing. Furthermore, he also seemed sceptical of Interflora’s “dilution” argument, rejecting their submissions on this point.
However, it does mean that advertisers need to take care. Arnold J. was clear that the onus was on the advertiser to avoid the risk of confusion, both in the phrasing of advertisements and with the keywords selected.
Interflora appears, from the evidence, to have been the most successful of the third party trade marks Marks & Spencer selected in its Adwords campaigns. This may prove a factor in assessing damages. It seems very probable that the success was, in part at least, due to persistent confusion on customers’ part.
A large percentage of those knowing the “Interflora” brand also know it is used by a network of independent florists. Expecting consumers to know that Marks & Spencer is not part of that network was, Arnold J. concluded, a bridge too far.
Whether Interflora v. Marks & Spencer represents mainstream law or is simply an outlier case depending on its own facts must await the decisions in the next raft of Adwords cases currently making their ways through the courts of Europe. The one thing that is certain is that the echoes of Google’s 2008 policy change are likely to rumble on well into the next decade.
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Discussed in a previous article Going Nuts or Legitimate Trade Mark Defence ↩