UK: Interflora v M&S – The Saga Continues

Last Updated: 14 November 2014
Article by Michael Gardner

The 6 year legal battle between flower delivery giant Interflora and M&S has taken a new twist following the Court of Appeal's latest appeal ruling in the case (Interflora Inc & Anor v Marks and Spencer plc [2014] EWCA Civ 1403). The appeal was brought by M&S in an effort to overturn the decision reached at trial last May by Mr Justice Arnold who held that M&S had infringed Interflora's trade marks.

Background

Interflora originally brought its infringement claim against M&S in the High Court back in 2008.  It had objected to M&S paying Google for the right to use the keyword "interflora" as a search term to help generate adverts promoting its own (i.e. M&S's) competing flower delivery service.   As a result of M&S's actions, consumers using "interflora" as a Google search term were led to a search results page in which M&S's service was prominently advertised.

Interflora argued that M&S was infringing its very well-known Interflora trade mark and that it was unfair for M&S to use someone else's brand in this way to drive internet traffic to its own competing service.  To add insult to injury, in order to stop M&S's advertising appearing higher up the search results page than their own, Interflora were forced to spend large sums of money "outbidding" M&S for the right to use their own name as a paid for keyword.  Google, meanwhile, was laughing all the way to the bank.

The case has been very hard fought on both sides and a number of interim rulings have been made both before and since the trial.  Indeed, prior to it reaching trial in 2013, there had already been several reported High Court decisions in Interflora including two trips to the Court of Appeal and a reference to the Court of Justice of the European Union (CJEU).

The CJEU had also, in the meantime, issued judgments in a number of other keyword advertising cases and in doing so has created a new test for infringement in such cases.  According to the CJEU, there will be infringement if the keyword advertising "does not enable [average consumers] or enables them only with difficulty to ascertain whether the goods or services referred to in the advert originate from the [trade mark owner, a connected party]..or a third party."

At the trial, applying that test, the judge Arnold J narrowly found in Interflora's favour.  In a substantial judgment running to over 300 paragraphs, he ruled that there had been an infringement of Interflora's trade mark by M&S through the use by M&S of the Interflora keyword. 

However, M&S appealed the decision and on 5 November 2014, the Court of Appeal gave its judgment in the appeal – itself a lengthy affair running to 189 paragraphs spread over 69 pages!

The result of the appeal

In its judgment, the Court of Appeal has accepted many of M&S's criticisms of the judge's decision- making process and his approach to the burden of proof.  It has upheld his approach on other matters such as the correct application of the "average consumer" test.  But it has allowed M&S's appeal. 

The finding of infringement made at trial has thus been set aside.  However, somewhat unusually, the Court has not substituted a decision of its own on the question of infringement (which in this case

could well have resulted in the dismissal of Interflora's action).  Instead, the Court has chosen to send the matter back to the High Court for a retrial. 

The implication is that if the trial judge adopts the approach approved by the Court of Appeal, this will result in a different decision by the judge compared to last time.  But despite this, the Court did not feel quite able to save the parties the time and cost of another trial.   So the possible outcome remains uncertain.  Although the trial judge will have to disregard some of the evidence that had previously assisted Interflora and abandon the idea that M&S bears any burden of proof, this does not mean that M&S's defence will automatically succeed.

It does seem incredible that this case could have lasted so long and that even now, after so many hearings and appeals, we still do not know who has won.   It remains to be seen whether the High Court will reach a different conclusion when the case is heard at trial for the second time – and whether that ruling will itself be appealed! 

Meanwhile, there must also be a possibility of an appeal to the Supreme Court or even another reference to the CJEU.

Strong support for the CJEU

One of the difficult issues facing the Courts throughout - both in this case and more generally in similar "adwords" cases - has been reconciling the apparently irreconcilable judgments of the CJEU in its previous case law on keyword advertising.  In particular the judgments in Google France and Die BergSpechte

To the surprise of many IP lawyers, the Court of Appeal has now endorsed that case law (described at one point earlier in the proceedings as "unfathomable" as making "no sense" by M&S's leading counsel).  Instead, the Court appears to have glossed over some of the problems created by the CJEU which have since troubled both judges and IP lawyers alike.  For example, why is the CJEU's test for trade mark infringement exactly the same for infringement under Article 5(1)(a) of the Trade Marks Directive as it is for cases under Article 5(1)(b) -  the key point being that both provisions have clearly different requirements.  One requires a likelihood of confusion and the other does not.  Does it really make sense to treat them as being the same as the CJEU has apparently done and to ignore the wording of the legislation?

The Court of Appeal has now answered this question in the affirmative and basically said that this doesn't matter – at least in the context of keyword advertising cases.   It is all rather puzzling.

The Court has also confirmed that Arnold J's analysis of the conundrum created by the CJEU is wrong and that the burden of proof in a keyword advertising infringement case lies squarely on the trade mark owner not the alleged infringer.

The death of "initial interest" confusion"?

Another of the issues touched on by the Court of Appeal in its lengthy 69 page judgment in Interflora, isthe subject of so-called "initial interest confusion" (IIC) 

This is a doctrine that is well established in the US and which has gained some traction in recent years, at least in the UK, following another decision of Arnold J in OCH Ziff Management v OCH Ziff Capital.

IIC is a term used to describe a scenario in which a person may be initially confused by the use of a sign identical or similar to a trade mark prior to making a purchase of the goods or services involved (as opposed to still being confused at the point at which they actually make the purchase). 

The judge in OCH Ziff held that IIC was good enough to constitute confusion for the purposes of both passing off and trade mark infringement.  (By the same token, so called "post-sale" confusion has also become an accepted way in which trade marks may be infringed).

However, in Interflora, the Court of Appeal has gone out of its way to frown on the whole doctrine of IIC and the Court has expressly stated that IIC should play no part in trade mark infringement cases – at least where those cases involve disputes about keyword advertising.

As the Court's observations about IIC were specifically directed at cases concerning keyword advertising, this does not necessarily mean that IIC is now dead in other trade mark cases.  But it is certain that the comments of the Court in Interflora will be relied upon by future defendants who are faced with claims based on IIC.  The Court of Appeal has seemingly reopened an aspect of the law that was thought to have been fairly well settled.

The "average consumer"

One of the issues that has occupied considerable judicial time in the Interflora case is the correct approach to be adopted by the Court when assessing the question of likelihood of confusion or the new CJEU-created test for infringement in keyword advertising cases.  It is well established that these have to be judged by reference to the "average consumer who is reasonably well informed and reasonably observant and circumspect".   But exactly how this doctrine should be applied by the Court remains a contentious subject.

In Interflora, M&S argued that the judge had been wrong to take into account that although the majority of average consumers were unlikely to be confused, a significant percentage of them nevertheless were.  The M&S approach was that once you had identified who the notional average consumer was, it was only that person's perception that mattered.  So the judge should have looked at the question from the perspective of the notional average consumer and answered the question one way or the other – in the negative.

The Court of Appeal rejected this approach.   The Court's conclusions on the application of the "average consumer" test were summarised thus:

"...we think it makes no difference whether the question is asked and answered from the perspective of the single hypothetical well-informed and reasonably observant internet user or whether that hypothetical person provides the benchmark or threshold for the purposes of identifying the population of internet users whose views are material."

"...We do not accept that a finding of infringement is precluded by a finding that many consumers, of whom the average consumer is representative, would not be confused. To the contrary, if, having regard to the perceptions and expectations of the average consumer, the court concludes that a significant proportion of the relevant public is likely to be confused such as to warrant the intervention of the court then we believe it may properly find infringement."

"...we consider the judge was entitled to have regard to the effect of the advertisements upon a significant section of the relevant class of consumers, and he was not barred from finding infringement by a determination that the majority of consumers were not confused...."

This part of the Court's ruling is important for would-be claimants because it underlines that you can still win an infringement case even if only a minority of the relevant population are confused or (at least in the case of keyword advertising cases) unclear as to the origin of the advertisement or advertiser.

Negative-matching

Having allowed M&S's appeal on liability, the Court went on to comment on the follow up judgment that had been made by Arnold J when he came to make the orders implementing his decision on liability.

Interestingly, the Court of Appeal has held that it is appropriate in these types of cases that where an injunction is imposed to stop the use of a trade mark as a keyword, the infringer can also be required to set up "negative matching" against the trade mark on its Google account.  This is because due to the way Google works, in some cases even if M&S were to be barred from using "interflora" as a keyword, it nevertheless remains possible that where a consumer enters the word "interflora" as a keyword, this may still bring up M&S adverts.   The Court agreed with Arnold J's analysis that in such cases, the infringer should ensure that the offending term was "negative matched" by Google so that this would not happen.

This is a somewhat surprising (if pragmatic) part of the ruling but appears to be a sensible one as it should reduce the prospect of further disputes in cases where a party has been banned from using an infringing keyword.

Where next for this case?

It is a sorry state of affairs that after so long and despite so much judicial water having gone under the bridge, the parties still do not know where they stand.  One can only imagine how much money has now been spent on legal costs in this case. 

All in all the Interflora case is not exactly a good advertisement for IP litigation.  Lawyers will have their own views as to where the blame lies for this sorry state of affairs.  But one of the obvious issues here is surely the fact that the Courts are having to apply to the modern-day internet age, trade mark laws that were drawn up more than 25 years ago.  That is clearly proving difficult, both at European and UK level. 

Meanwhile, notwithstanding the Court of Appeal's supportive tone, the debate about the qualities of the CJEU's jurisprudence in this area will surely continue.

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 Mondaq.com.

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

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.