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The Interflora decision: A flowering of the online power of retail brand owners?

For some years, Marks & Spencer and Interflora have been locking horns over Marks & Spencer’s purchase and use of “Interlflora” as a keyword. By Lee Curtis

BRANDS

The Interflora decision: A flowering of the online power of retail brand owners?

For some years, Marks & Spencer and Interflora have been locking horns over Marks & Spencer’s purchase and use of “Interlflora” as a keyword. By Lee Curtis

The parties have traipsed through a number of court’s during their odyssey but the most recent decision –by the highest court in Europe and given on 21st May – seems to mark the end of the journey for both of them. Interflora won.

In short, the decision says that Marks & Spencer’s use of “Interflora” as a keyword infringed Interflora’s trade marks for INTERFLORA. But does this victory herald a flowering of the online power of retail brand owners or will it will the first of many more such disputes?

One thing that the decision does not hold is that keyword advertising using a competitor's trade mark is inherently prohibited. In fact, the court has held in many cases that such usage promotes competition.  In other words, it was very fact-specific. This suggests that it may be the simply yet another decision in a long line of disputes between retailers and search providers over keyword advertising. 

The growth of multi-channel and omni-channel retail suggests that online sales and pay per click advertising will remain centre stage in the battle by retailers to retain control over use of their trade marks by third parties that the decision has held is that if the way in which the advertisement generated in response to a search using  the keyword appears or is used leads to confusion amongst reasonably observant internet users as to whether the advertisement is in any way linked to the trade mark owner or that they can only determine that question with difficulty then such usage is prohibited.

Although, this decision may ultimately have turned on the specific facts of Interflora's business model in that it is a network of florists, and the Marks & Spencer (M&S) advert did not enable consumers to easily determine that M&S was not part of that network, the broader ramifications are that it is likely that many advertisers who use Google's Adword system and other keyword advertising services will now proceed with more caution when bidding on competitors’ trade marks. 

Interestingly, the judge effectively held that the average consumer although a reasonably well-informed and observant internet user is not particularly technically literate and does not know precisely how the AdWords service operates and is not aware of the issues.  This dispels the common perception that consumers have become educated to distinguish between the multitude of adverts, which appear on search engines such as Google.

What are the ramifications of this decision for retailers? Well, bidding on competitor’s trade marks in keywords will continue and in many cases will be perfectly legitimate. However, retailers partaking in this activity now have to proceed with caution. Not only must the advert be clear, that it is not in anyway connected to the competitor but any linked website must also be clear on this point.

So, returning to the original question, has the decision increased the power of retail brand owners? Yes to a degree, the decision has assisted brand owners in controlling the use of its brand in keyword advertising. However, the Interflora decision concerned an almost unique set of facts, and legally the case did not particularly raise any new concepts. 

It is likely that there will be more disputes of this nature and these cases will begin to lay down a much more concrete set of guidelines on what is and is not permissible.  The battle lines have been drawn in the fight for one of the key growth areas of the retailing scene.

Lee Curtis is Partner at trade mark attorney firm Harrison Goddard Foote and a member of its trade mark group which acts for many of the UK’s leading retailers.


 

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