Bloomberg News

M&S, Interflora Both Claim Victory in Case Over Internet Ads

September 22, 2011

(Updates with lawyer comment in seventh paragraph, M&S comment in 10th and Interflora comment in 11th and 12th.)

Sept. 22 (Bloomberg) -- Marks & Spencer Group Plc and florist network Interflora both claimed victory following a European Union court ruling on whether companies can use rival’s trademarked terms to trigger advertisements on search engines.

While Marks & Spencer and Interflora argued a ruling by the EU Court of Justice today is in their favor, a U.K. national court will have to make the final decision on whether Marks & Spencer’s use of the Interflora trademarks “jeopardizes” the reputation of Interflora’s intellectual property.

Interflora, which has operated a flower-delivery network in the U.K. since the 1950s, is suing Marks & Spencer in the U.K. for violating its trademark rights by using keywords, such as Interflora, Intaflora and Interflora Delivery, to trigger ads on Google Inc.’s search engine.

“This ruling is a score-draw,” said Nick Rose, head of intellectual property litigation at law firm Field Fisher Waterhouse LLP. “This is helpful for brand owners” such as Interflora “and it leaves some room for Marks & Spencer to claim they’re not liable in this case.”

The High Court in London in 2009 referred the case to the EU’s top tribunal for guidance on how to interpret the bloc’s trademark rules in such cases.

‘Wiggle Room’

Interflora will be pleased “because they have a lot more scope to argue that what Marks & Spencer did has infringed,” Rose said in a telephone interview. “However, Marks & Spencer still got some wiggle room and some arguments they can raise.”

The EU court said the U.K. tribunal can consider the general knowledge of the English public as to whether or not Marks & Spencer is part of the Interflora network, said Rose.

“It’s a long way from being an open and shut case for Interflora,” said Rose.

London-based Marks & Spencer said in an e-mailed statement it was “encouraged by today’s judgment as we have always believed this is fair competition.”

Interflora said it was “delighted” by the decision “in their favor.”

“This ruling will enable brand holders across Europe to deliver quality service and ensure that trademarks guarantee the origin of the goods bought by consumers online,” Interflora said in an e-mailed statement. “Keyword advertising is a very powerful tool and so it is vital for consumer protection that Internet search results take consumers immediately to the brands they were looking for.”

Google Case

In a ruling last year in a dispute between Google and LVMH Moet Hennessy Louis Vuitton SA, the EU court ruled that brand owners can sue advertisers who buy protected keywords and display ads on the search engine’s website that make it difficult for users to see whether they sell original or fake products.

FTD Group Inc., the florist whose symbol is the winged god Mercury delivering flowers, bought Interflora in 2006 to enter the European market. FTD Group was acquired by Internet retailer United Online Inc. in 2008.

The EU court clarified that trademark owners can prevent a company from using a trademarked term as a keyword to trigger adverts where the competitor “takes unfair advantage of the distinctive character or repute of the trademark, free-riding, or where the advertising is detrimental to that distinctive character.”

The case is: C-323/09, Interflora Inc, Interflora British Unit v. Marks & Spencer Plc, Flowers Direct Online Limited.

--Editors: Anthony Aarons, Peter Chapman

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net


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