Internet advertisers who use competitor names to draw traffic have been dealt a rap on the knuckles following a high profile battle between Marks & Spencer and Interflora.
In the fast growing world of internet advertising, new online techniques are demanding new rules and the latest ruling from the Court of Justice of the European Union (ECJ) says that a trademark owner can stop a competitor from using their trademark as a keyword in a search engine such as Google.
But the judgement stopped short of a complete ban, saying the competitor would have to be taking unfair advantage of the trademark owner’s reputation or devaluing the trademark itself.
Marks & Spencer had selected the word ‘Interflora’ as a keyword on Google’s paid referencing service, AdWords. As a result, when a member of the public searched for Interflora on Google, a Marks & Spencer advertisement appeared at the top of the screen, as a ‘sponsored link’.
Interflora objected to this and brought proceedings in the High Court on the basis that M&S was abusing its trademark. The English court referred the issue of whether a competitor could use a trademark as a keyword to the ECJ, who published their ruling last week (24th November).
The ECJ ruled that a trademark owner was entitled to prevent a competitor from using its trademark as a keyword in order to advertise identical goods or services, or where using the trademark as a keyword amounts to taking advantage of the reputation of the trademark owner or is likely to dilute or tarnish the trademark.
Chris Felton Commercial Dispute Resolution Partner explains: “Although this involved the might of Marks & Spencer versus a franchise representing small florists across the land, I suspect that usually it is a smaller company that wants to take advantage of the reputation of a large company’s trademark. Small businesses should take note of this case and be aware that nowadays trademark owners are vigilant in protecting their rights, both online and offline.”
However the ECJ did not outlaw using a trademark as a keyword completely: this would be allowed, the Court said, where the advertisement put forward alternative goods and services and did not merely offer an imitation of the trademark owner’s goods or services and provided the advertisement did not dilute or tarnish the trademark.
Chris added “As is so often the case, you can do it if you do it right, so before you use McDonald’s as a keyword to advertise your takeaway, get advice from an expert.”
For more information, please contact Chris Felton at Gardner Leader.
Interflora Inc and Another v Marks and Spencer plc Times Law Reports 24.11.2011
First Council Directive 89/104/EEC Articles 5(1) and (2)
Council Regulation (EC) no. 40/94 Article 9(1)A