Competitive keyword advertising: the legal risk of using a competitor’s trade mark as a search engine keyword

By Kirsten Gilbert and Jake Hayes

On 21 May 2013, the UK High Court found that Marks & Spencer had infringed Interflora’s trade marks by using “Interflora” as a Google AdWord keyword to advertise its flower delivery service.

Since 2008, Marks & Spencer, as part of its pay-per-click advertising strategy for its flower business, had been engaged in bidding for Google AdWords keywords that consisted of its major competitor’s trade marks, principally "Interflora". This typically resulted in both companies’ advertisements appearing in the sponsored links section at the top of a user’s search engine results page.

Interflora, which had the majority of the market share in online floral deliveries, claimed that Marks & Spencer’s advertisements appearing beside its own was confusing to consumers, who would mistakenly think that Marks & Spencer was part of the Interflora network of florists.

This case follows several high profile cases around Europe and the courts, until now, have generally decided against the trade mark owner, often finding that use of a competitor’s trade mark as a keyword does not amount to trade mark infringement either by the search engine or the advertiser. Instead, this kind of use was considered to provide useful competition, with internet users in most cases aware that they are just being offered an alternative product or service.

So how did the Interflora case differ? The question the Court had to decide was, when an internet user entered the term “Interflora” into the search engine looking for a flower delivery service, would the internet user be able to tell, when faced with the Marks & Spencer sponsored advert, whether Marks & Spencer’s floral delivery service originated from Interflora. To decide this, the judge must look at advertisements from the viewpoint of the “reasonably well-informed and reasonably observant internet user”.

Firstly the judge considered whether internet users would know, as part of their general knowledge, that Marks & Spencer’s flower delivery service was not part of the Interflora network, but was in fact a competitor. He did not think so. He also considered that they would not be able to tell this when they saw the sponsored advert as nothing in the adverts informed internet users that Marks & Spencer was not part of the Interflora network.

What singles this case out is the very particular nature of the Interflora network. Most of the florists in the Interflora network operate under their own brands. This includes several large, commercial tie-ups with large retailers. The problem is that an internet user could therefore think that Marks & Spencer was part of the Interflora network.

Whilst Interflora won this particular case due to the very particular nature of its network of florists, there are still uses of competitor trade marks as sponsored keywords that do not amount to trade mark infringement. Before taking the decision to bid on a competitor’s trade marks, marketers should carefully consider the potential risk and the facts of each situation and seek out legal advice if there is any doubt.

About the authors

Kirsten Gilbert is partner and Jake Hayes, trainee solicitor, at Marks & Clerk Solicitors LLP. Kirsten is an intellectual property lawyer who advises on all aspects of intellectual property. Her focus is on trade marks, designs and copyright, but she also has significant patent experience. Kirsten has particular expertise in litigation and has represented clients in disputes in the High Court, the Patents County Court and Court of Appeal. Jake is a trainee solicitor supporting the work of all the Marks & Clerk Solicitors teams.

Marks & Clerk Solicitors is a UK law firm practicing solely in intellectual property. Its litigation and commercial expertise covers all aspects of patents, trade marks, domain and trade names, designs and copyright. It is associated with the UK largest firm of patent and trade mark attorneys, Marks & Clerk, which also has offices in North America, continental Europe, Asia and Australia.

www.marks-clerk.com  

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