The European Court of Justice (the “ECJ”) has clarified when a trade mark owner can prevent its competitors from using its trade mark, in internet referencing services such as Google Adwords, to trigger adverts for competing products.

M&S purchased the keyword “Interflora” as part of the Google Adwords programme. When used as a search term the keyword, “Interflora”, triggered an advert promoting Marks and Spencer’s (M&S) flower delivery service. In the English High Court, Interflora claimed that M&S’s use of the keyword “Interflora” in the Google Adwords programme constituted infringement of its trade mark “Interflora”.

The English High Court asked the ECJ to determine whether or not a trade mark owner is entitled to prevent a competitor from using its trade mark, in an internet referencing service, to advertise a competing product without the trade mark owner’s consent.

The ECJ stated that the owner of a trade mark is entitled to prevent a competitor from using its mark, in an internet referencing service, to advertise competing goods/services, where there is, or is liable to be an adverse effect on one of the “functions” of the trade mark. The ECJ noted that the “functions” of a trade mark are:

• To enable customers to identify the origin of the product/service (the “origin function”)
• To inform and win over customers (the “advertisement function”)
• To acquire or preserve a reputation capable of attracting customers and retaining their loyalty (the “investment function”)

The ECJ also stated that if the trade mark has a reputation the owner of the trade mark is entitled to prevent competitors using its mark, in an internet referencing service, to trigger adverts for competing products if that use:

• Affects the distinctiveness of the trade mark (“dilution”)
• Causes detriment to the repute of the trade mark (“tarnishment”) or
• Takes unfair advantage of the fame of the trade mark (“free riding”)

The ECJ, however, emphasised that the trade mark owner cannot prevent the use of its trade mark to trigger an advertisement for competing products where the advertisement triggered only provides an alternative to the goods/services provided by the owner of the trade mark.

The ECJ has set out at least four arguments on which a trade mark owner can rely, to prevent a competitor from using its trade mark in an internet referencing service. The English High Court must now decide whether M&S’s use of the word ‘Interflora’ constitutes infringement. 

Contributed by Leo Moore.