South Africa is in a fortunate position in developing our trade
mark case law as we can adopt developments in Europe which suit us
and discard those which don't. The reason for this is
that the South African Trade Marks Act is closely modelled on the
United Kingdom Trade Mark law and the European Directive on Trade
Marks with the result that our courts have been happy to seek
guidance from the European courts in interpreting the South African
Act but have made it clear that we are not bound by such
rulings.
An area of commerce which tests all areas of law, intellectual
property being no exception, is the ever increasing and developing
field of e-commerce. The particular issue which I wish to
explore this month is the question of keywords and whether the
purchase and use of a third party's trade mark as a key
word may constitute trade mark infringement.
The European Court of Justice has dealt with a number of such
issues, the most recent being the case of Interflora Inc v Marks
& Spencer PLC (M&S) where the CJEU was faced with a number
of questions in the context of infringement proceedings relating to
the selection of the registered trade mark Interflora as a keyword
for use in Internet reference services by a competitor of the
registered proprietor. When an Internet user entered
Interflora in the relevant search engine an advertising link to
Marks & Spencer's website was generated under the
heading "sponsored links" at the right hand side of the
screen. The advertising link displayed the following
text:
www.marksandspencer.com/flowers
Gorgeous fresh flowers & plants
Order by 5 p.m. for next day delivery"
M&S paid a fee to the referencing service, AdWords.
Interflora claimed that the use of the Interflora trade mark in
this manner constituted both classical trade mark infringement and
dilution. It was common cause that Interflora is a well known
trade mark for flower delivery services.
Classical trade mark infringement entails the use of a trade mark,
in the course of trade, in relation to goods or services in respect
of which the trade mark is registered and, significantly, where the
identical trade mark is used, there is no further requirement that
a likelihood of confusion or deception need be established.
On the face of it M&S's conduct would appear to meet
all these requirements. However the CJEU reaffirmed that a
trade mark is always supposed to fulfil its function of indicating
origin, but then somewhat muddied the waters by referring to trade
marks performing other functions, in particular for the purposes of
advertising or investment.
The CJEU never finds on the facts, it merely stipulates what legal
criteria must be adopted by the referring court, in this case the
UK High Court. In the Interflora case the CJEU stated
that it was for the referring court to consider whether the
condition of an adverse effect on one of the functions of a trade
mark was met but then did consider it appropriate to provide the
referring court with further guidance.
In dealing with the potential adverse effect on the origin function
the court reaffirmed the test that the court should assess whether
reasonably well-informed and reasonably observant Internet users
were deemed to be aware, on the basis of general knowledge of the
market, that M&S's flower delivery services was not
part of the Interflora network and secondly, if that was not
generally known, whether its advertisement enabled such persons to
tell that the services concerned did not belong to the Interflora
network.
As indicated above, the court also muddied the waters by
considering the adverse effect on the advertising function and
investment function but as I believe it will be some time, if ever,
before the South African courts embrace the concepts of an
advertising and investment function of a trade mark in classical
trade mark infringement (as opposed to trade mark dilution) we
needn't consider the court's guidelines on those
issues.
What we can do is apply the origin function test to the South
African situation where I believe it is safe to conclude that
Interflora is also a well known trade mark and Woolworths could
conveniently replace Marks & Spencer in the South African
environment.
The first, and most important, question is what constitutes the
reasonably well-informed and reasonably observant South African
Internet user. While access to the Internet is widely
available in South Africa, the Internet user must be literate both
in the literal sense and the computer sense. I believe that
it is safe to say that any Internet user who is aware of keywords
and Adwords would not initially be confused because such user would
be astute enough to realise that the mere entry of a trade mark
such as Interflora will result in numerous hits that are not linked
with the genuine Interflora business, and any doubt would also be
removed by the fact that the reference to a competitor business
appears under the heading "sponsored links" on the right
hand side of the screen. The next issue is precisely what
appears in the sponsored link, as well as in the website that the
link is connected to. In this case, using our hypothetical
Woolworths example and adapting it to the text referred to above,
clear reference to "Woolworths Flowers Online" together
with a link to the Woolworths website would remove all doubt as to
origin.
In the circumstances while the the law is complex and will no doubt
challenge the European courts for many years to come, South African
law has already accepted that use otherwise than as a trade mark
does not constitute classical trade mark infringement (once again
relying on European authority) and the application of this
principle to the facts of a keyword trade mark infringement case in
South Africa could allow our courts, by referring to Interflora, to
hone in on the key issue which is that the mere use a third
party's trade mark as a keyword would not constitute
classical trade mark infringement but, if there are other elements
in the sponsored link or the website linked thereto which cause the
reasonably well-informed and reasonably observant Internet user to
be confused as to origin of the goods or services in question, such
us would constitute trade mark infringement.
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.