Has Spring arrived early for Interflora?

Has Spring arrived early -- or too early --
for Interflora in its battle with M&S?

Springtime is the time for flowers, which makes it totally appropriate that the first little buds should begin to appear in Case C-323/09 Interflora Inc and Interflora British Unit v Marks & Spencer plc and Flowers Direct Online Limited, a reference to the Court of the European Union (ECJ) for a preliminary ruling from the High Court of Justice of England and Wales. Today's budding jurisprudence comes in the form of an Opinion from Advocate General Niilo Jääskinen (all the way from Finland where, the Kat learns, spging has yet to arrive: it's currently freezing and the temperature feels like minus 7 Celsius).

Essentially, the problem here was that Marks & Spencer bought the word 'interflora' as a keyword for Google's AdWord paid referencing service, so that people who were looking for the world-famous Interflora flower delivery service would find an advertisement for Marks & Spencer's rival service at the top of the non-organic, paid-for search results. This did not make Interflora very happy since (i) they were proprietors of the hugely famous INTERFLORA trade mark, (ii) internet users who keyed in "interflora" as a search term were obviously looking for their website and not Marks & Spencer and (iii) worst of all, this was just before the onset of St Valentine's Day, which is one of the biggest events of the year for the flower trade. This just had to be trade mark infringement, said Interflora. The ECJ's ruling in Google France that neither the sale nor the use of terms protected by trade marks as keywords constituted a per se trade mark infringement didn't help them -- but that was a "5(1)(a)" case, where same goods/same mark (double identity) infringement was alleged. Here Interflora had a '5(2)' argument, based on a use which allegedly damaged the mark's reputation or distinctive character without due cause.

The trial judge, Mr Justice Arnold, painstakingly analysed both the relevant law and the facts, before referring a raft of ten questions for preliminary rulings. Following some helpful correspondence between the referring judge and the ECJ's registry, the ten questions were pruned down and clarified to a miserly four.

The Advocate General's advice to the ECJ is a good deal simpler than the questions. He says:

"(1) Article 5(1)(a) of ... Council Directive 89/104 ... and Article 9(1)(a) of Council Regulation ... 40/94 .. on the Community trade mark must be interpreted as follows:

– A sign identical with a trade mark is used ‘in relation to goods or services’ within the meaning of these provisions when it has been selected as a keyword in connection with an internet referencing service without the consent of the trade mark proprietor, and the display of ads is organised on the basis of the keyword. [following paragraph 65 of Google France]

– The proprietor of a trade mark is entitled to prohibit such conduct under abovementioned circumstances, in the case where that ad does not enable an average internet user, or enables the said user only with difficulty, to ascertain whether the goods or services referred to in the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or from a third party. [affirming the first paragraph of the ruling in Google France]

– An error concerning the origin of goods or services arises when the competitor’s sponsored link is liable to lead some members of the public to believe that the competitor is a member of the trade mark proprietor’s commercial network when it is not. As a result of this the trade mark proprietor has the right to prohibit the use of the keyword in advertising by the competitor in question.[Article 5(1)(a) double identity infringement does not require that there be a likelihood of confusion -- in TRIPS Agreement this means that a likelihood of confusion is to be presumed -- but Article 5(1)(b) infringement, which does require a likelihood of confusion, describes this as including a 'likelihood of association': this arguably includes the leading of members of the public to believe that Marks & Spencer is a member of Interflora's network when it is not]

(2) Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94 must be interpreted as meaning that the use of a sign as a keyword in an internet referencing service in relation to goods or services identical to those covered by an identical trade mark with a reputation also falls within the scope of application of those provisions and it can be forbidden by the trade mark owner [not in every case, since it's not a per se infringement, but only] when

(a) the ad shown as a result of the internet user having typed as a search term the keyword identical with a trade mark with a reputation mentions or displays that trade mark; and

(b) the trade mark

– is either used therein as a generic term covering a class or category of goods or services; [add "for which the trade mark is registered", to avoid Apple Inc being able to sue for the use of 'apple' as a keyword for the pomaceous fruit of the mala domestica]

– or the advertiser attempts thereby to benefit from its power of attraction, its reputation or its prestige, and to exploit the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark.[This wide formulation will be sure to delight trade mark owners and dismay Google's sales department, since in one sense every purchase of someone else's trade mark as a keyword for AdWord purposes is chosen so that the internet user, who keys in the term because he is attracted by what it stands for, will be presented with the AdWord purchaser's advertisement]

(3) The fact that the internet search engine operator does not permit trade mark proprietors in the relevant geographical area to block the selection of signs identical to their trade marks as keywords by other parties is as such immaterial in so far as the liability of the advertiser using of the keywords is concerned.".[tytoc collie thinks this is a really interesting question, despite its irrelevance in this particular situation, and suspects that it will re-emerge in the future when issues like secondary liability and exemption from liability for service providers crop up].

After Google France: OLG Braunschweig decides in AdWord case

Keyword advertising (in particular Google AdWords) and trade marks is an ‘evergreen’ topic and one of this Kat’s guilty trade mark pleasures. While we are still awaiting the ECJ decision in the Interflora case, we recently had the first German decision from the Higher Regional Court of Braunschweig (Oberlandesgericht Braunschweig, case reference: 2 U 113/08 of 24 November 2010) after the ECJ’s cluster of AdWord related decisions of spring 2010.

In Google France (and in Die BergSpechte, Portakabin, Eis.de (also known as bananabay)) the ECJ had provided guidance to the national courts, inter alia, holding that booking of a third party trade mark as a keyword did not affect the ”advertising function” of that trade mark. As regards to the “origin function”, the ECJ had found that an adverse affect - and consequently trade mark infringement - would have to be assumed in two circumstances:
(i) where a third party’s ad suggests that there is an economic link between that third party and the trade mark proprietor; or
(ii) where an ad is so vague concerning the origin of the goods or services that a normally informed and reasonably attentive internet user is unable to determine, on the basis of the advertising link and the commercial message attached to it, whether the advertiser is an unrelated third party or economically linked to that trade mark proprietor.

In its decision of 24 November 2010, the OLG Braunschweig again had to assess the lawfulness of using a competitor’s trade mark as an AdWord. The claimant was selling confectionery, including chocolate and pralines, via its website www. mostshop.com and derived rights in the word/device trade mark "MOST" via a licensing agreement. The defendant was also selling chocolate products and pralines via its websites at www.selection-exquisit.de and www.feinkost-geschenke.de. In 2007, the defendant decided to book an ad via Google AdWords and chose the generic term "Pralinen" (pralines) as a keyword using the "broad match" function ("weitgehend passende Keywords"). Google’s "broad match" function then added the keyword "Most Pralinen" (Most pralines). The consequence of this was that the defendant’s ad was displayed whenever internet users searched for the claimant’s products "Most-Pralinen". The defendant’s ad (which was displayed) looked as follows (translated by tytoc collie):

“pralines
wines, pralines, delicatessen, presents
enjoy and make a gift!
http://www.defendantswebsite.de/“

IPKat comment: with “broad match”, the AdWords system automatically runs ads on relevant variations of the selected keywords, even if these terms are not included in the advertiser’s keyword lists. Keyword variations can include synonyms, singular/plural forms, and what Google calls “… relevant variants of [the selected] keywords, and phrases containing [the selected] keywords” (see here for more information).

The claimant was not impressed and took the matter to court, winning at first instance before the Regional Court of Braunschweig. On appeal, the Higher Regional Court of Braunschweig confirmed this decision and held that internet users who enter a trade mark as a search term into an internet search engine (as opposed to querying generic terms) will assume that the ads that are displayed as a result of this search query are “somehow be economically connected” to the search term they have entered. Thus, even though the defendant’s ad did not include the claimant’s trade mark and despite the fact that the ad pointed to the defendant’s website, the judges nonetheless took the view that the ad was too “vague” since it did not include a clarification that defendant and claimant were not economically linked. The court supported its finding with an analogy: it compared this kind of use of an internet search engine (that is typing a trade mark into the search engine as a search query) to asking a salesperson for a specific trade marked product. Hence, the consumer had the expectation that the ad displayed will then also originate to the trade marked product. Consequently, with the ad being too “vague”, the court held that the defendant was liable for trade mark infringement. The court further found that the defendant was liable under the principle of disturbance liability and had a duty to check whether the “broad match” function had included a third party trade mark to the list of keywords. The court appears to have limited this duty to the point of the selection of the keywords (ex ante) and expressly based it on the assumption that the claimant can check what keywords had been added via the broad match function at this point. In the absence of a Bundesgerichtshof decision on AdWord/trade marks, the OLG Braunschweig allowed an appeal to this decision.

There is little doubt in this Kat’s mind that this particular decision will not hold upon further appeal to the Bundesgerichtshof. The OLG Braunschweig is 'tradtionally' known for being trade mark owner friendly, whereas the Bundesgerichtshof appears to follow a more liberal, advertiser-friendly approach when its comes to keyword advertising basing its decisions on a rather internet savvy consumer (PCB decision). The OLG Braunschweig's decision appears to be based on a more easily confused consumer. This Kat is further not completely convinced by the OLG Braunschweig’s shop assistant analogy: do we really regard search engine triggered ads as the “online version” of a real-life shop assistant pointing us to a specific product? Do we not usually expect to further refine a search result, separating natural search results from ads and sponsored links? As far as this Kat recalls (and please do feel free to correct me if I am wrong), the ECJ in Google France et al did not request a clarification within the ad text itself (like the OLG Braunschweig appears to do here), or discuss the “keyword selection tool” matter in any of its recent AdWords decisions.

Of course, the judges from the OLG Braunschweig will be fully aware of this and one has to admire their spirit in deciding differently. In the absence of a Bundesgerichtshof decision, however, this is decision feels like an invitation for German claimants to do some forum shopping.

Case reference: OLG Braunschweig, 2 U 113/08, of 24 November 2010. The OLG’s case database can be accessed here.

Angry cat praline here.

To read Austrian blogger austrotrabant’s critical review of this decision, particularly with regard to the "shop assistant" analogy, please click here. (Thanks also go to Max aka austrotrabant for sharing the text of the OLG original decision with this grateful Kat)

After Google France et al: when is an ad "vague"?

Some of our readers may know that this particular Kat has a particular interest in Keyword Advertising ("AdWords") related decisions of all shapes and sizes - a passion (or shall we say: an obsession) she shares with Austrian IP lawyer and academic Maximilian "Max" Schubert otherwise known as the blogger austrotrabant.

Max has conducted in-depth research in this field of trade mark law and prompted by Jeremy's report on Och-Ziff Management Europe Ltd & Anor v Och Capital LLP & Anor [2010] EWHC 2599 (Ch), decided by specialist IP judge Mr Justice Arnold (Chancery Division, England and Wales) on 20 October 2010 (see tytoc collie report here), has come up with an intriguing chart (below) that summarises the ECJ's recent guidance on AdWords as well as its potential application.

To provide some context and jog your memory: we have of course all read the ECJ's recent AdWords related decisions in Google France, Die BergSpechte, Portakabin, Eis.de and thus recall that in its guidance to the national courts provided in Google France, the ECJ set out that an adverse affect - and consequently trade mark infringement - would have to be assumed in two circumstances:

(i) where a third party’s ad suggests that there is an economic link between that third party and the trade mark proprietor; or

(ii) where an ad is so vague concerning the origin of the goods or services that a normally informed and reasonably attentive internet user is unable to determine, on the basis of the advertising link and the commercial message attached to it, whether the advertiser is an unrelated third party or economically linked to that trade mark proprietor.

Consequently, after Google France it was now for the national courts to determine their own case law based on the ECJ’s principles which could lead to very different interpretations from the various national courts when it comes to question whether an ad is “vague” or not.

Max and this Kat are now debating (see here) how all these cases fit together. While this all is admittedly a trifle geeky, this Kat would be very interested to know whether our readers agree or disagree with Max' conclusions.

Please post your comments below.

To have a look at Max' entertaining presentation on AdWords "It's the ad-text, stupid", please click here (German) and here (English).

Regarding "vagueness", see here

You want to complain? Just try finding where you can do so ...

A somewhat harassed reader wrote to this weblog last week with the following message:

"Dear Kats - I have been scrabbling around Google's AdWords site for the last 30mins or so, trying to locate their "new" AdWords trade mark complaint form (which, as far as I am aware, should have been released by now). As far as I can see, the form you have to complete to report a trade mark complaint is -- somewhat ironically given the nature of their business -- virtually impossible to locate, at least to somebody with my level of techy know-how. By way of example, a "Google" search for "adwords trade mark complaint procedure" produces a set of results which link to an article on Google's AdWords site that explains how to file an "AdSense for Domains trademark complaint" (ie not a "run-of-the-mill" trade mark complaint) followed by a list of unhelpful or out-of-date stories/links, most of which are to third party sites. A similar search using the "Search Help" box within Google's AdWords site produces a similarly unhelpful set of results. I would be interested to know whether I am the only one of your readers who's struggling to find the form"

Before the Kat had the chance to post this, harassed reader wrote again:

"I am pleased to say that my technology literate trainee managed to find the link to the complaint form hidden towards the bottom of the "What is Google's AdWords and AdSense trademark policy?" page on the AdWords site here. Even so, this took a considerable degree of searching and no small amount of lateral thinking, and it is difficult to avoid the conclusion that Google have done their best to make it as hard as possible for people to lodge a complaint. With this in mind, I thought it might be worth running a control experiment by using Bing's search engine to find the AdWords Trademark Complaint form rather than Google. Interestingly, it turns out that it takes a luddite like me just two clicks to link through to the form via Bing compared to at least six clicks (and fair degree of experimentation) using Google. Is this a sign that Bing's algorithms are now superior to Google's or an indication of Google's reticence to police its own market place…? Either way, it may help other readers avoid a similarly frustrating experience to suggest that they use Bing or follow this link directly to the complaint form."

Well, readers, you know what to do by now!
Complaints department here