Interflora Inc & Anor v Marks and Spencer Plc & Anor

Keyword advertising triggered by a trade mark infringes the origin function where the advertisement does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to determine whether the advertised goods or services originate from the trade mark proprietor, an economically connected undertaking, or a third party.

Ill-informed or unobservant users must be discounted, but infringement may be established where a significant proportion of the relevant class is likely to be confused. The advertiser bears the evidential onus of ensuring that the advertisement is sufficiently clear. Keyword advertising is not inherently objectionable, and fair competition may provide due cause where the advertisement presents a genuine alternative without affecting the mark’s functions.

Interflora owned registered United Kingdom and Community trade marks for INTERFLORA and operated a flower-delivery network. Marks & Spencer paid Google to display advertisements for its flower-delivery service when users searched for “interflora” and related terms. Interflora alleged infringement under the relevant provisions of the Trade Marks Directive and Community trade mark Regulation.

The court had previously referred questions to the CJEU, which gave its ruling in Interflora (CJEU). The issue at trial was whether the advertisements, viewed in the context of Google’s search-results page and from the perspective of the reasonably well-informed and reasonably observant internet user, adversely affected the origin or investment functions of the marks, caused dilution, or took unfair advantage of their distinctive character or reputation.

1. Origin function. The court applied the CJEU’s keyword-advertising guidance. The relevant question was whether the advertisements enabled reasonably well-informed and reasonably observant internet users, without difficulty, to determine whether the service originated from Interflora, an economically connected undertaking, or a third party. The advertiser bore the evidential onus of making the advertisement sufficiently clear. The assessment was contextual and included the nature of the Interflora network, its members’ use of their own names, its commercial relationships with retailers, and the absence of any statement in the advertisements that Marks & Spencer was independent.
2. The average consumer was a legal construct and the assessment was not a statistical test requiring a majority to be confused. Confusion by ill-informed or unobservant users was discounted. Nevertheless, a significant proportion of the relevant class being likely to believe that the advertiser was connected with the trade mark proprietor was sufficient.
3. As at 6 May 2008, and continuing thereafter, the advertisements did not enable the relevant internet users, or enabled them only with difficulty, to ascertain that Marks & Spencer’s service was independent of Interflora. A significant proportion of users were incorrectly led to believe that Marks & Spencer formed part of the Interflora network. The use of the signs therefore adversely affected the origin function and infringed under Article 5(1)(a) of the Directive and Article 9(1)(a) of the Regulation.
4. Investment function. Interflora did not establish that the keyword advertising damaged the reputation or image of the marks. This head of claim therefore failed.
5. Dilution. The dilution claim could not succeed in the absence of an adverse effect on the origin function. Since such an effect was established, the court did not need to decide the claim on that basis.
6. Unfair advantage and due cause. The court accepted that a competitor may obtain an advantage by presenting an alternative to the proprietor’s services, but held that Marks & Spencer’s different market position as a general retailer did not deprive it of due cause. The unfair-advantage claim therefore failed.
7. The court expressed doubts about whether the advertisements amounted to comparative advertising under Article 4 of the Misleading and Comparative Advertising Directive, but no comparative-advertising defence had been invoked. The issue was left undecided.

This was a first-instance trial judgment. The judgment records earlier interlocutory and reference proceedings, including the CJEU ruling in Interflora (CJEU) and two Court of Appeal decisions, but the present judgment determined the merits after trial.