European Union: Keyword Advertising And Trademark Infringement

Last Updated: 6 March 2012
Article by Donvay Wegierski

When considering the issue of keyword advertising and trade mark infringement, the importance of balancing the need to protect a reputable trade mark and fair competition is paramount.

On 22 September 2011, the Court of Justice of the European Union ("ECJ") handed down its preliminary ruling in Interflora Inc, Interflora British Unit v Marks & Spencer PLC, Flowers Direct Online Limited C-323-09.

This ruling comes two years after the High Court of Justice (England and Wales, Chancery Division) referred five questions concerning the unauthorised use of a mark by a competitor within an internet referencing service and a mere six months after Advocate General Jaaskinen's ("AG") opinion indicating that brand owners can, in certain circumstances, prevent keyword advertising. (This opinion was discussed in our Legal Brief, July 2011: Advocate General's opinion: Interflora Inc vs Marks & Spencer.)

As anticipated, the ECJ's decision broadly encompasses the AG's findings and as advocated by the AG, the ECJ has also emphasised balancing the need to protect a reputable trade mark while taking into account fair competition within the relevant sector when considering the use of trade marks in keyword advertising.


Marks and Spencer PLC ("M&S") had purchased keywords for Google's AdWord paid referencing service. As a result, M&S adverts appeared under sponsored links when internet users searched terms including "interflora", "interflora flowers", "interflora delivery", "", "" on Google. Although these adverts did not contain any references to the INTERFLORA mark and its services per se, they did offer internet users M&S flower delivery services. Consequently, Interflora instituted trade mark infringement proceedings against M&S.

The ECJ's findings

The High Court referred to the ECJ the question of the interpretation of rights conferred to all trade marks under Article 5 (1) of the First Council Directive 89/104 EEC and Article 9 (1)(a) of the Council regulation (EC) no. 40/94 which affords the exclusive right to a proprietor of a trade mark to prevent the unauthorised use of a sign, that is:

a) identical to a registered trade mark and used in respect of identical goods and services for which the mark is registered;

b) similar to a registered trade mark and is used in respect of similar goods and/ or services where confusion and/or association with the registered trade mark and proprietor is likely.

Applying its rationale from Google France and Google Inc and others vs Louis Vuitton Malletier and Others (joined cases C-236/08 to C-238/08), the ECJ stated that even if an advert does not display the actual keyword used to generate the results, use of the keyword does constitute use in the course of trade in relation to the goods and services that are being offered.

As per Google France such use can only be prevented if the use has an adverse effect on the function of a trade mark. While reiterating that the essential function of a trade mark indicates origin – and thereby provides a guarantee of the goods and services offered – the ECJ suggested that there are two additional functions of a trade mark to be taken into account in assessing whether there are any adverse effects on the function of a trade mark in keyword advertising, namely, the advertising and investment functions of a trade mark.

In order to assess whether there are indeed adverse effects on these functions the ECJ indicated the following:

The function of indicating origin

The ECJ applied its test from the Google France and Google case that is "where the advertisement displayed on the basis of the keyword corresponding to the trade mark does not enable a reasonably well informed and reasonably observant internet user, or enables them only with difficulty, to ascertain whether the goods or services referred to by the advertisement originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party".

The ECJ went on to say that when considering the relevant search results yielded when searching Google for inter alia "interflora", a reasonably well informed and reasonably observant internet user may indeed find it difficult to discern between the services offered by Interflora and those of M&S, unless M&S has clearly indicated it as such.

The advertising function

The ECJ stated that a trade mark is instrumental in advertising the owner's goods and services, although merely owning a trade mark does not infer rights to prevent practices that are intrinsic to fair competition. It is the nature of keyword advertising that identical keywords are used by competitors and such use does not prevent the trade mark owner from attracting its own consumers. Should trade mark owners need to strengthen marketing strategies as a consequence, this does necessarily imply that the advertising function of the trade mark has been adversely affected.

The investment function

According to the ECJ, the investment function of a trade mark allows the owner to acquire and preserve a reputation and further to attract consumers and retain their loyalty. This is adversely affected when a third party uses an identical mark in relation to identical goods and services for which it is registered, in a manner that substantially interferes with the owner's own use in acquiring or preserving a reputation capable of attracting customers and retaining their loyalty.

The ECJ does, however, recognise that a trade mark's investment function overlaps with its advertising function, meaning that even if there is a need to increase marketing strategies because of keyword advertising, an adverse effect on the investment function of a trade mark cannot automatically be inferred. Fair competition has to be accounted for.

Ultimately, it remains for the High Court to decide whether the use of the identical mark "interflora" or the like by M&S puts the INTERFLORA mark at risk, and in doing so, hinders Interflora's ability to attract and retain customer loyalty.

Trade marks with a reputation

The High Court found that the INTERFLORA trade mark has a reputation but required clarity from the ECJ as to when Article 5 (2) of the Trade Marks Directive 89/109, which protects against dilution of trade marks with a reputation, applies.

As referenced in the AG's opinion, the term dilution in the laws of the European Union concerns the elements of blurring, tarnishment and free riding juxtaposed to US law concerning blurring and tarnishment only.


The ECJ reasoned that the test of the "reasonably well informed and reasonably observant internet user" is equally relevant to determining trade mark dilution. Should the High Court find that an internet user would be able to discern that the displayed adverts yielded in search results by using "interflora" keywords, are the goods and services offered by M&S and are not those of Interflora, there can be no trade mark dilution.

Also, considering the element free riding, the ECJ recognised that a competitor who offers different goods or services ("alternatives") and who is not simply replicating the genuine goods or services - thereby not offering "imitations"- does not, as a consequence, erode the distinctiveness of a trade mark. The ECJ therefore regards offering alternative goods and/or services to those of a trade mark owner, albeit it due to the use of identical keywords, as fair competition and consequently there can be no free riding.


Google's Adword programme, whereby the highest bidders are offered third party owned trade marks for keyword advertising, remains debated by trade mark owners.

Previously, the ECJ has found that the use of an identical mark for identical goods and/or services is trade mark infringement. When considering the issue of keyword advertising and trade mark infringement, however, the importance of fair competition is paramount to the ECJ's rulings.

Recognising that the function of a trade mark indicates origin, the ECJ's Google France decision introduced the test of the "reasonably well informed and reasonably observant internet user" to determine whether there is trade mark infringement where keyword advertising is concerned.

In addition to the function of indicating origin, the ECJ's Interflora ruling has said that two other functions of a trade mark are to be accounted for, that is the investment and advertising functions served, ruling that only when these three functions are adversely affected will the use of a trade mark in keyword advertising constitute trade mark infringement.

Further, by referring to "alternatives" and "imitations" so as determine whether or not a competitor is guilty of "free riding", the ECJ has left the door open for further interpretation.

Interflora Inc, Interflora British Unit v Marks & Spencer PLC, Flowers Direct Online Limited C-323-09 will only be concluded once the High Court has fully assessed the facts of the matter before it which is anticipated during the course of 2012. It can however, be inferred from the ECJ's decision that Interflora Inc, Interflora British Unit ("Interflora") may ultimately succeed in the proceedings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions