Interflora v Marks & Spencer - European Court of Justice (ECJ) judgment from 22 September 2011 (C-323/09)
In Interflora, the ECJ confirmed its strict interpretation of article 5 (2) of the EU Trademark Directive, according to which the sole use of trademark in keyword advertising does not per se constitute an infringement of trademark with a reputation but rather required the trademark owner to show that the purpose of this use by the competitor is likely to be considered as free riding, dilution or tarnishement.
In its long-awaited judgment Interflora v Marks Spencer, the ECJ has clarified the limits of use of trademark in keyword advertising.
Having discovered that the term “Interflora” was used by Marks & Spencer (M&S) as a Google AdWord, Interflora had brought proceedings against the UK retailer for trademark infringement before the High Court of Justice on the basis of its UK and Community trademarks with a reputation, “Interflora”.
The High Court of Justice has subsequently referred a series of question to the ECJ, and notably whether the European rules enable the trademark owner to prevent a competitor from using its trademark in keyword advertising.
The ECJ has followed its previous judgments (see ECJ Case C-236-08, Google France and Google; ECJ Case C-558/08, Portakabin), while ruling that “the proprietor of a trademark is entitled to prevent a competitor from advertising – on the basis of a keyword which is identical with the trademark and which has been selected in an internet referencing service by the competitor without the proprietor’s consent – goods or services identical with those for which that mark is registered, where that use is liable to have an adverse effect on one of those functions of the trademark.”
Furthermore, the ECJ went beyond to extend the trademark functions on which the Court based its test for adverse effect. Whereas the Court had previously taken into account the adverse effect on the long–established origin function as well as the advertising function (see C-236-08, Google France and Google), the Court went further in the Interflora case to recognize a new test based on the trademark investment function, being whether the apparently infringing activity “may adversely affects the trademark’s investment function if it substantially interferes with the proprietor’s use of its trademark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty”.
In addition, the Court made clear that the owner of a trademark with a reputation can only prevent third party from using its trademark in keyword advertising when this use takes advantages of, or dilutes, the distinctive character and the reputation of the trademark (free-riding) or when the advertising is detrimental to that distinctive character (dilution) or to that reputation (tarnishement).
Considering the above, whether this judgment appears to be a victory for the trademark owners, the Court also required the owners of trademark with a reputation to provide a well-founded reasoning against internet advertisers.
We are now waiting for the next and final episode of the Interflora case which will take place before the High Court of Justice in 2012.
