7 November 2014

Long running Google AdWords dispute heads for retrial

This is not just any Google Adwords dispute. This is an Interflora v Marks and Spencer Google Adwords dispute that is now well into its 7th year. 

Following a plethora of High Court, Court of Appeal and European Court of Justice hearings, a much-publicised trial in April 2013 seemed to have finally resolved the issues between the parties: M&S, the judge ruled, had infringed Interflora's trade mark by using it as a keyword to trigger ads for its competing flower service. Significantly, although M&S’s ads did not mention "Interflora", they did not specifically state that M&S was not part of the Interflora network. The judge therefore concluded that the ads:
"... did not enable reasonably well-informed and reasonably attentive internet users, or enabled them only with difficulty, to ascertain whether the service referred to in the advertisements originated from the proprietor of the Trade Marks, or an undertaking economically connected with it, or originated from a third party."
Furthermore, in a follow-up hearing in June 2013 to decide what form of injunction to grant to Interflora, the judge held that bidding on generic flower-related keywords without negative matching "interflora" (which would have prevented the M&S ads from appearing against "interflora" search results) still amounted to use of the "interflora" mark.

However, M&S appealed the judgment, and this week the Court of Appeal somewhat sensationally concluded, albeit with regret, that it had no alternative other than to remit the case for a retrial.

The Court held that the trial judge had fallen into error in concluding that the burden of proof lay on M&S to prove that its ads were sufficiently clear to dispel any real risk of confusion with Interflora (M&S not have filed any evidence to that effect). Instead it was for Interflora to prove infringement, and that the M&S ads had failed to enable the average consumer to realise that the ads came from M&S not Interflora.

The judge was also wrong to rely on analysis of a Hitwise report which showed a number of consumers who clicked on to the M&S website from the offending ad, subsequently visited the Interflora website (and the conclusion that this showed confusion among those consumers, who had been expecting to be taken to the Interflora website in the first place).

The judge also mistakenly attached weight to opinion evidence from an online marketing company that "many people do not know or understand" that there is a difference between the Google search results and the ads displayed alongside.

In its concluding remarks, the Court held that it was far from confident the judge would have come to the same conclusion had he not made the errors they had identified. This seems to leave open the very real possibility that a retrial may reverse the original decision and find in M&S's favour.

However, a word of warning to performance marketing experts: the Court of Appeal upheld the finding that failing to negative match a third-party trade mark could amount to use of that trade mark.

The saga continues ...

(This blog was also published by The Huffington Post here.)

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