Menu

Re-trial ordered: the Interflora v Marks & Spencer story continues

Print publication

16/12/2014

The dispute between Interflora and Marks & Spencer has taken yet another twist. The Court of Appeal has allowed, in part, M&S’s appeal against the 326-paragraph High Court judgment handed down by Arnold J in 2013, in an appeal decision which is itself nearly 200 paragraphs long [1].

This is the third time this long-running dispute has reached the Court of Appeal and it has also been the subject of a ruling from the European Court of Justice, which we summarised here (along with the background to the dispute).

In essence, the dispute concerns the purchase by M&S from the Google Adwords service of keywords which led to the display of M&S adverts on Google in response to the search term “Interflora”. Interflora instituted proceedings for trade mark infringement under the Community Trade Mark Regulation [2] and succeeded in the High Court, as summarised here.

The Court of Appeal made a number of interesting points in allowing the appeal:

  • internet advertising using keywords which are identical to third party trade marks is not inherently objectionable from a trade mark point of view, and indeed offers to internet users genuine alternatives to the goods and services of the trade mark proprietors in order to protect the possibility of fair competition
  • the test of the “reasonably well-informed and reasonably observant internet user” is not a statistical one, and it makes no difference whether the question is asked and answered from the perspective of a single hypothetical well-informed and reasonably observant internet user, or whether that hypothetical person provides a benchmark or threshold for identifying the population of internet users whose views are material
  • the key question was whether the advertisements in issue did not enable reasonably well-informed and reasonably observant internet users, or enabled them only with difficulty, to ascertain whether the goods and services advertised originated from Interflora or an undertaking associated with Interflora, or from M&S. Here, the Court of Appeal held that the High Court was not barred from finding infringement following determination that the majority of such internet users were not confused
  • the onus of proof was on the trade mark owner to show that the advertisement in question did not enable informed and reasonably attentive internet users to ascertain if the goods and services originated from the trade mark owner or an undertaking associated with the trade mark owner, or from a third party. In this respect, the High Court had erred by holding that the onus lay on the alleged infringer to show that there was no real risk of confusion. The Court of Appeal held that this error had probably influenced the High Court’s assessment of the evidence which in turn had tainted its other findings
  • the concept of “initial interest confusion”, imported from US law and which arises where a consumer is confused as to the origin of goods or services before a purchase, is not helpful in an English law determination of whether keyword advertising constituted trade mark infringement. The test to be applied, which had been developed over a number of years in EU trade mark law, was whether an advertiser had enabled the average consumer to ascertain the origin of the advertised goods in order to make an informed decision
  • a failure to “negative match” in Google AdWords could constitute trade mark infringement. Negative matching prevents an advertisement from being displayed to a user who has searched for a particular term, such as the name of a competing trade mark owner. Whether the failure to negative match constitutes infringing use will depend on the court’s assessment of all the relevant circumstances. M&S’s appeal was dismissed on this point.

There had also been a number of procedural errors, including reliance upon evidence of a Mr Rose, which Arnold J has previously ruled he would not rely on, as well as evidence of Mr Pandya to infer confusion in the mind of average internet users when it was clear there was no basis for such an inference.

As a result of these findings, in particular Arnold J’s erroneous conclusion regarding the onus of proof which the Court of Appeal felt tainted his other findings, they were not confident that the Court would have reached the same result if it had not made these errors. The Court of Appeal, in an unusual move, declined to determine the matter itself on the basis that it had not had the benefit of reviewing all the documentary evidence or hearing the witness evidence. Although the case has now been remitted for a retrial, the judgment provides some useful commentary regarding the “reasonably well-informed and reasonably observant” internet user, as well as clarification of the test to be applied in determining whether keyword advertising constitutes trade mark infringement and the onus of proof in these circumstances.

_____________________

[1] Interflora Inc v Marks and Spencer plc [2014] EWCA Civ 1403
[2] Regulation 207/2009/EC