Online retailing is growing fast. Research suggests that it makes up over 12% of UK retail sales, with the US and Germany close behind. Many of the advertising and promotional techniques used in e-commerce are necessarily different from those deployed in more traditional sales methods. One of the techniques currently popular is the use of keyword advertising such as Google’s AdWords.
The AdWords system, where retailers bid to have their advertising shown among the results of a Google search for a particular keyword or phrase, is central to the long-running dispute between flower delivery network Interflora and British retailer Marks & Spencer. Where a user searches for a word or phrase including a registered trade mark, can another business use the AdWords system to have their advertising appear in the search results? The trade mark in question was INTERFLORA, with Marks & Spencer bidding to associate their advertising for delivered flowers with that word. Another allegedly offending activity involved bidding not on ‘interflora’, but also on flower-related terms without negatively matching ‘interflora’.
In a High Court decision in the case, discussed here last year, the judge decided that the trade mark was infringed in these circumstances. He concluded that the normal internet user could not easily see whether the advertised service was in some way connected with the Interflora network. Interflora obtained an EU-wide injunction against M&S.
We had thought that last year’s decision was the end of the story, but the Court of Appeal has upturned the apple (blossom) cart and sent the case back for a retrial.
What were the Court of Appeal’s reasons for the upset?
Referring back to the European Court’s analysis of the case in 2011, the Court of Appeal said that using keywords identical to a registered trade mark was not ‘an inherently objectionable practice’. A judge must assess whether the activity adversely affected key functions of the trade mark: indicating origin (can users work out who was providing the service?) and the investment function (can the trade mark owner develop a reputation using the trade mark?).
The Court of Appeal picked out a number of legal errors in the 2013 High Court decision, where the judge had not followed European decisions properly. These included a reversed burden of proof where the keyword was not identical to the trade mark, and use of the ‘initial interest’ doctrine. Without these errors, said the appeal court, the outcome of the trial may well have been different.
Another trial? The case started in 2008 and has been through almost every possible stage in the process. The Court of Appeal even considered whether it could make a final decision itself to save another episode in the litigation, but it concluded, reluctantly, that the case would have to be tried again.
One could say that this one is a late bloomer.