Yesterday, EU Advocate General JÄÄSKINEN delivered their opinion on the Interflora vs Marks and Spencer case regarding bidding on trademarks (top link – opinion). Interflora had asserted that M&S, by bidding on the Interflora trademark, and terms closely associated to it, was infringing that trademark. The opinion given (which will only come to judgment later this year) upheld some, but not all of the claims.
This case was a natural evolution of the Google vs. LVMH dispute, where the EU ruled in Google’s favour. As such the next step for trademark owners was to take direct action against an end advertiser. It is interesting to read some of the detail on this initial opinion.
Some of the claims have been dismissed: for example Jaaskinen states that on the issue of free-riding, “the choice of keywords in search engine advertising by Marks & Spencer implies a marketing message that they offer an alternative to Interflora. However, in my opinion this does not amount to free-riding”. An important point here is the advertising copy that has been used, “If that ad mentions or displays the trade mark, the acceptability of the use depends on whether we are faced with legitimate comparative advertising or, on the contrary, with riding on the coat-tails of the trade mark proprietor”, in effect by not using any trademark or brand within the ad copy, M&S were not in this way infringing trademark.
However, Jaaskinen has said that there is fault, interestingly in a specific area, the actual nature of Interflora being a network, and as such an average user may be confused and believe that M&S is part of that network. Jaaskinen states.
“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.
However, 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. “
“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.”
One can read from this that if Interflora had not been a network, that Jaaskinen would not have taken issue in this case. The implication of this for other advertisers who bid on competitor terms may therefore not be as drastic as an initial reading of this opinion may suggest.
The key to all this, though, is flagged up during the course of this opinion; that there has been a general lack of legislative clarity on this subject, and this needs to addressed.
“However, in my opinion these issues partly stem from the problematic drafting of Article 5 of Directive 89/104. Therefore the actual situation might be better remedied by appropriate legislative measures than a reorientation of case-law, as the example of the development of the United States federal legislation on trade mark dilution shows.”
I would agree. There needs to be a very clear cut ruling on what is considered fair and unfair practises on bidding on competitor trademarks and brands. There is good argument that brand and trademark bidding allows for competitors to present alternatives. There is also good argument that such bidding on trademarks allows competitors to unfairly profit from the effort that companies put into building up a brand. Clarity here from the EU would be very welcome.