Last Thursday, the European Court of Justice handed down its long-awaited decision in Interflora v Marks & Spencer1. This case deals with the use of trademarks in keyword advertising on the internet, specifically the use of well-known trademarks as AdWords.
Interflora offers a famous worldwide flower delivery service under the Interflora trademarks. Marks & Spencer is one of the largest retailers in the UK and also has a flower delivery service. Just before Valentine's day Marks & Spencer bought the word "Interflora" – and some variations, such as Interflora Flowers, Interflora Delivery and interflora.com – as a keyword for Google's AdWord service. As a result, an advertisement of Marks & Spencer would appear on the top of the paid-for search results in Google whenever one entered the query "Interflora". Interflora started proceedings against Marks & Spencer claiming that the use of its well-known (Community) trademarks as an AdWord constitutes trademark infringement.
The High Court of Justice (England & Wales) referred the case to the Court of the European Union ("ECJ") for a preliminary ruling about the unpermitted use of the trademark of a competitor as a keyword in an internet referencing service.
In its decision, the ECJ first of all recalls that the use by a third party of a sign identical to the trademark for identical goods or services for which the trademark is registered ("double identity"), can only be prevented if that use will have an adverse effect on one of the "functions" of the trademark. This rule also applies if a competitor selects and uses a keyword that is identical to the trademark for advertising identical goods or services.
The essential function of a trademark is to guarantee to consumers the origin of the goods or services covered by the trademark. Other functions include the "advertising" and "investment" functions. The ECJ stresses the fact that the trademark's function of indicating origin is not the only function that is eligible for protection, but all functions of the trademark are protected (for trademarks with and without a reputation).
The ECJ in its decision refers to the Google France matter 2 and repeats that the trademark's origin function is not by definition adversely affected if one's trademark is used as an AdWord. This is only the case when a reasonably well-informed consumer is not able to verify (with certainty) whether the advertisement shown as a result of the keyword...