AdWords litigation is traditionally lengthy. Rosetta Stone and Google’s famous case lasted three years, while the online search engine took six years to win a similar case in Australia. And British retailer Marks and Spencer’s (M&S) dispute with flower delivery network Interflora has been particularly epic.
A number of disputes have arisen from the case, as UK courts have struggled to understand this new form of trademark use. The case began in 2008 when M&S bought the Google AdWord ‘Interflora’, to make its floristry services visible as a sponsored link when browsers entered the word into the Google search engine.
Litigation ensued, with Interflora arguing that acquiring ‘Interflora’ as a keyword amounted to infringement of its trademark rights.
The case eventually came to trial at the High Court of Justice of England and Wales. Judge Richard Arnold delivered his decision in 2013, finding in favour of Interflora based on the fact that average consumers would have had difficulty telling the origin of the services provided when seeing their requested search results on Google.
His decision came in light of the Google France case that was decided at the Court of Justice of the EU (CJEU) in March 2010.
In Google France, the CJEU ruled that the sale and use of targeted search adverts such as AdWords is lawful as long as users are not confused as to origin of the products.
Specifically the CJEU held that in respect of keyword advertising, if a third-party advertiser secures a trademark as a keyword, and does not enable normally informed and reasonably observant users to ascertain whether the goods or services referred to in the sponsored link originated from the proprietor of the trademark, or a connected company, then the bidder is liable for trademark infringement.
According to Peter Brownlow, partner at Bird & Bird, this fed into Judge Arnold’s decision in May 2013, which, rather surprisingly, was set aside in November last year.
Court of Appeals of England and Wales Lord Justices found multiple errors in Judge Arnold’s reasoning, and rather than correct them themselves, they decided to order a complete do-over of the appeal.
The Lord Justices said there were three points in the case where Judge Arnold made significant mistakes.
The first was the burden of proof, in establishing whether the keyword was clear or not.
Brownlow explains that when an advertiser uses an identical mark, the question of whether or not a user would be able to ascertain where goods or services originate from must be clear. In his 2013 decision, Judge Arnold ruled that the burden of proving this was on the advertiser, M&S, and not Interflora.
“The Court of Appeal said that he mistakenly arrived at that decision, because a significant change to the burden of proof had not been intended by the CJEU.”
“If a change were planned, it would have been explicit in the Google France case or any subsequent CJEU cases dealing with keywords and/or trademark infringement.”
“As such, the burden of proof lay squarely on the trademark proprietor.”
Judge Arnold also ran into error by referring to the US concept of initial interest confusion.
The Lord Justices said he was wrong to rely on that concept and it did not apply under UK jurisdiction.
His final mistake occurred when assessing Interflora’s opinion evidence provided by Mr Rose and Mr Prandya.
The Lord Justices held that Judge Arnold applied “too much” weight to Rose’s opinion evidence and his rejection of Prandaya’s evidence was unclear, nor did he explain his reasons for doing so.
While the Lord Justices had issues with Judge Arnold’s judgement, the case also highlights the somewhat grey area of AdWords case law. Simon Miles, partner at Edwin Coe, says AdWords case law is not “cut and dry”’, especially when involving the general public.
“If you’re acting for a brand owner, say Interflora, you can continue to say there is trademark infringement and that you do not need to show public confusion under the Google France test.”
“Advertisers, here M&S, can say that keyword advertising is not essentially objectionable and does not have an impact on the trademark in order to infringe it.”
But Brownlow shares that the basic principles of bidding on a keyword remain “relatively clear” because of a series of judgements from the CJEU.
“The implication this case has it that the Court of Appeals established that the onus is on the trademark proprietor, but this case is simply an issue of fact,” he says.
“It is highlighted by the fact it has been sent back to the High Court for another trial—they need to establish what the facts are.”
Ramsay Monime, partner at Briffa Intellectual Property, adds that Judge Arnold is in the best position and has had the benefit of hearing all the oral evidence of the witnesses.
“In a case like this where the evidence was of huge importance to the parties and the public, it should be sent back to the judge for retrial,” he says.
Both Brownlow and Monime stress that the points of issue should not be the misunderstanding, but the fact-finding aspects, whereas Miles holds that the matter of public interest and opinion evidence can make AdWords and trademark litigation less black and white.
“It’s never going to be completely settled when you’re looking at what the public thinks because that undermines the whole of trademark law.”