The survey can be found here: http://www2.lse.ac.uk/media@lse/research/EUKidsOnline/ShortSNS.pdf.

The Advocate General said that there was no infringement of Interflora’s rights under Article 5(2) of the Trade Marks Directive. Article 5(2) prohibits use of a sign which is identical or similar to a trade mark with a reputation in a way that takes unfair advantage of, or is detrimental to, the distinctive character of the mark. For Article 5(2) to apply, the offending advert would need to mention or display the mark, and either the trade mark is used as a generic term in the advert or the advertiser seeks to benefit from the power of reputation or prestige to exploit the marketing effort of the trade marked image. Since M&S did not display the mark in its advert, that would not be a problem for M&S here.

However, Article 5(1) of the Trade Marks Directive was an issue for M&S. Article 5(1) can enable a trade mark owner to prohibit use in the course of a sign identical to its trade mark in respect of identical goods or services. This can apply when it has been selected as a keyword to be used in keyword advertising on Internet searches without the trade mark owner’s consent. The trade mark owner is entitled to prohibit that conduct when the ad does not enable an average Internet user without difficulty from ascertaining whether the goods or services in the ad originate from the proprietor of the trade mark or a linked entity. It was already established that this be a problem where the trade marked term was used within the ad itself and it did not sufficiently distinguish the advertiser from the trade mark owner. However, this case was a bit different, because Interflora was a well-known mark representing a commercial network of different businesses; therefore, even though M&S did not use “Interflora” within the advert, it was more likely that consumers may have difficulty deciding whether M&S was linked with Inteflora or not. Consumers may well think that M&S was part of the Interflora network.

We await the full ruling of the European Court of Justice in this important case. Advocate Generals’ opinions are often followed, though. If followed, this case could well strike a warning to people who think they are safe to sponsor a competitor’s trade mark in keyword advertising as long as they do not mention the competitor in the ad itself. Watch this space…

Google is being investigated by the European Commission over allegations that it abused its dominant position in the search engine market, contrary to European Union competition law. The fact that there is an investigation does not mean that Google has done anything wrong, but the Commission will now look into things more closely. The complaints came from rival search engines Foundem and ejustice.fr as well as price comparison site Ciao. They allege that the search engine giant lowered the ranking of competing sites in Google’s unpaid and paid for search results, as well as artificially boosting Google’s own position in its results. There are further allegations that Google unfairly requires exclusively obligations and prevents them from placing certain types of competing ads on their websites.

With effect from 1 March 2011, the CAP Code will apply to advertisements and other marketing communications on advertisers’ own websites and in other non paid-for space online under their control. A three stage test will be undertaken to see if a particular advert is covered, but essentially businesses will be safest just to assume that any material about them or their goods or services on their own websites or on any social media website under their control will be caught.

Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space. This restriction on being able to obtain advertising space will move into the online world when the changes come into effect, as the ASA will co-operate with search engines to remove adverts that link to the non-compliant material.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: ‘Businesses should consider these changes as part of an overall website review. Whilst these changes will add another layer to the regulatory requirements that businesses face, there are other important legal requirements that many websites don’t yet comply with but should do. We regularly come across websites that don’t comply with Distance Selling Regulations, E-Commerce Regulations, the Data Protection Act or other laws, or otherwise expose themselves by failing to take simple measures. Help is at hand and it doesn’t have to cost a fortune. We have helped many of our clients through this online legal maze in a practical and cost-effective way.’

Mark Weston, a Partner at Matthew Arnold & Baldwin LLP and Head of the Online Team, comments: ‘This case shows the risks and dangers of doing business in different countries. Businesses should not stop doing business altogether in other countries, but they should exercise care and seek local legal advice. This can be especially important with online businesses.’

In this particular case, Portakabin made and supplied mobile buildings. It owned a registered trade mark for ‘PORTAKABIN’, Primakabin sold and leased new and second-hand mobile buildings, some of which were owned by itself and others by other suppliers such as Portakabin. Primakabin sponsored ‘Portakabin’, as well as similarly spelt words such as ‘portocabin’, with Google so that Primakabin would appear prominently in response to a search engine query for those terms. Its advert was headed ‘used portakabins’. Portakabin objected and claimed that this was an infringement of its registered trade mark rights. The case worked its way through the Dutch courts, which made a reference to the ECJ to rule.

The ECJ stated that use of a third party trade mark as a keyword would infringe that trade mark unless the advert made it clear that the advertised goods or services do not come from the trade mark owner or licensee. Where this was not clear, European Union trade mark law would not normally provide a defence on the grounds of a mere description of the goods. Trade mark owners can stop unauthorised use of their marks as keywords if the advertising does not enable average Internet users or only with difficulty to ascertain whether or not the advertised goods or services originate from the trade mark owner.

The ECJ also said that legitimate resellers should have special protection. They could not be prohibited from reselling second-hand goods of the relevant trade mark owner, alongside other goods, unless the sale of those other goods risked seriously damaging the image of the proprietor’s trade mark.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: ‘This judgment reinforces the recent Louis Vuitton ruling, which can be found here: http://www.mablaw.com/2010/03/european-court-of-justice-gives-eagerly-awaited-ruling-in-google-keyword-search-terms-trade-mark-cases-google-v-louis-vuitton/. Keyword advertisers are treading on thin ice if they sponsor another trade mark to generate search results for their websites, unless they can show that users are not confused as to the commercial connection. Meanwhile, this latest case also enables legitimate use of trade marks by resellers.’

In this subsequent case, Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmueller (BergSpechte) owned a trade mark for travel arrangements. A competitor called trekking.at Reisen used particular marks that Bergspechte considered to be too similar to its own registered trade marks to generate paid-for ads using Google’s AdWords service. The case proceeded through the Austrian courts and the matter was referred to the ECJ to rule.

The ECJ has ruled that the EU’s Trade Marks Directive enables a registered trade mark owner to prohibit an advertiser from advertising, based on a keyword identical with or similar to the trade mark through an Internet referencing service (eg Google), goods or services identical with those for which the mark is registered, such that the advertising does not enable an average Internet user without difficulty from ascertaining whether the goods or services originate from the trade mark owner or an entity economically connected with it or instead by a third party. The selection of the keyword by the advertiser was use in the course of trade and in relation to its own goods or services, even where the mark did not appear in the advert itself. It is for the national court to decide whether the signs are sufficiently similar and also whether the average Internet user could ascertain that the advertiser is not connected to the trade mark owner.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘In other words, there is no advance from the Google / Louis Vuitton ruling. We don’t know how the national courts are going to interpret these rulings. Things are still unclear.’

The case arose from luxury goods supplier Louis Vuitton’s concerns over use of its trade marks on Google’s AdWords system by two competitors who were trying to sell competing products and by a third person who supplied counterfeit Louis Vuitton goods. The cases proceeded initially through the French courts and then ended up at the European Court of Justice. The ruling was keenly awaited because of its impact on the ability to protect your own brand and use others using the growing advertising medium that is Google. The ECJ ruled as follows:

• A trade mark owner could prohibit a third party from advertising a keyword identical to its registered trade mark where the advert does not enable a normally informed and reasonably attentive Internet user without any difficulty to ascertain whether the goods or services referred to in the advert originate from the trade mark owner or whether the parties are somehow economically connected. It is for the national courts to decide on each case whether a trade mark’s distinguishing function is affected.
• An Internet referencing service provider (such as Google) which stores a keyword identical to the trade mark and displays adverts based on that does not itself infringe the registered trade mark owner’s trade mark rights.  
• Google also has protection against someone else’s acts in misusing trade mark rights because it is a mere host of the information within the meaning of the E-Commerce Directive and did not play an active role as to give it knowledge over the data stored. The mere fact that Google’s service was subject to payment, Google set the payment terms and it provided general information to advertisers did not prevent Google from being exempt. It would lose that protection, though, if it did not act expeditiously in removing access to the data involved with the third party’s misuse of trade marks.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘This was a long-awaited ruling. Unfortunately, though, the result is not particular clear. Brand owners will be pleased that the ECJ agrees with protecting their brands; Google will be pleased that it is not responsible for third parties who pay Google money to advertise using competitors’ trade marks; and people will be pleased that they can use another party’s brand to advertise on the Internet as long as users are not left in any doubt as to the fact that the parties are not economically linked.

‘On the other hand: brand owners will be disappointed that competitors may be able to free ride on the back of their brand and push up the price that they have to pay Google; competitors will not be clear as to where the boundaries are for using someone else’s brand in search terms; and Google will be left unclear as to whether it needs to take down someone’s use of a keyword upon being told to do so by the brand owner (and failure to take down when it should have done could leave Google without a defence to being an innocent host).

‘The result is therefore somewhat confusing. Who has won and who has lost? It would have been more useful to have had some more guidance such as a clear statement as to whether use of the trade mark term in the result was ok or not. Instead, we will need to await further court rulings to clarify the position which goes to the heart of doing business online. This was a good opportunity for the ECJ to give clarity in an important commercial area, and they failed to do so.’