Implications of the ECJ Interflora AdWords Opinion

David Naffziger Mar 28, 2011

The European Court of Justice's (ECJ) provided an opinion last week that Marks & Spencer(M&S) violated Interflora's trademark rights by purchasing (but not using) search keywords that contained Interflora's marks.

While the opinion was in Interflora's favor, it hinged on a very specific set of circumstances that won't necessarily apply to competitors in most industries.

Interflora estimates that its paid search costs increased 14-fold (or increased $750k per year) when Google liberalized its trademark policy in the UK in 2008.

Interflora sued M&S directly and excluded Google from the lawsuit.

Marks & Spencer took advantage of the changed trademark policy and ran ads that were triggered off of searches on Interflora's brand terms. These ads looked like this:

M&S Flowers Online
Gorgeous fresh flowers & plants.
Order by 5pm for next day delivery.

In the opinion, the justice stated:

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.

The nature of Interflora as a network of florists provides an environment where advertisements from competitive individual florists (M&S) are perceived to be part of the Interflora network.

Incidentally, M&S (and ASDA) are still running ads several days after the opinion was issued, so clearly M&S doesn't view this case as resolved.

Implications for Advertisers

While on the surface, the ECJ opinion might look to favor trademark holders over their competitors, the ruling is really quite narrow and focuses on the unique nature of the services offered by Interflora and the implied relationship from the display of an ad.

I would think it unlikely that this opinion can be applied to typical competitive advertisements. It seems that cases of competitive keyword advertising will likely need to be evaluated on a case-by-case basis for quite some time.

Of course, the Interflora case has yet to be decided by the UK court, but this opinion is expected to have a large impact.

More information
The full opinion can be found on the Court of Justice's site, however I was unable to build a link directly to the ruling. The full pdf of the ruling can be found here.

Topics: Trademark and Law, Search Engine Updates

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