Advocate-General of European Court of Justice Finds Possible Unwarranted Association, But No Trademark Dilution by Google Adwords ads

In response to a reference by the High Court of Justice of England and Wales, an Advocate-General of the European Court of Justice,  Niilo Jääskinen, issued the following opinion, which may be taken up and adopted by the Court:

26. In connection with the ‘AdWords’ referencing service, Marks & Spencer reserved the keyword ‘interflora’, as well as variants made up of that keyword with ‘minor errors’, and expressions containing the word interflora (such as ‘interflora flowers’, ‘interflora delivery’, ‘interflora.com’, ‘interflora co uk’), as keywords. (19)

27. Consequently, when internet users entered the word ‘interflora’ or one of those variants or expressions as a search term in the Google search engine a Marks & Spencer ad appeared under the heading ‘sponsored links’.

28. It is common ground that the ad displayed did not contain any expressions referring to Interflora chosen as keyword; neither did the ad display Interflora’s trade mark in any other way.

….

47. Therefore, in my understanding, in addition to its registered meaning, the trade mark INTERFLORA has gained a ‘secondary meaning’ (36) denoting a certain commercial networkof florists providing a certain type of delivery service, and the reputation of that trade mark relates to or is identical with the positive associations this meaning has in the minds of the relevant circles of consumers. (37)

48. Consequently, an association between the trade mark of Interflora and an identical delivery service of flowers provided by Marks & Spencer is possible and even likely in the mind of an average consumer seeking information about such services in the internet when faced with the following ad: (38)

‘M&S Flowers Online

http://www.marksandspencer.com/flowers

Gorgeous fresh flowers & plants. Order by 5pm for next day delivery.’

To my mind the display of the ad as a consequence of typing ‘interflora’ into a search engine creates in the context of this case an association that Marks & Spencer is part of the Interflora network.

….

86. Interflora claims that the choice as keywords of their trade mark and terms deviating from it only with small modifications by Marks & Spencer would imply a risk of dilution of the INTERFLORA trade mark and thus constitute blurring which they should be entitled to forbid under Article 5(2) of Directive 89/104. Their argument is that by typing ‘interflora’ the internet user is seeking information about florists marketing their services (and goods, i.e. flowers) under the trademark INTERFLORA. The conduct of Marks & Spencer would thus entail a risk that the INTERFLORA trade mark is diluted as it gains a generic meaning denoting any group of florists offering delivery services where the delivery may be undertaken by a different shop than the one who received the order.

87. I am afraid that this line of argument cannot succeed after Google France and Google because it implies that the choice of third party trade marks as keywords would as such constitute blurring, at least in case of trade marks with a reputation. The argument namely identifies the association resulting from the causal chain that unites the typing of the keyword to the display of the sponsored link with the third party’s ad as the factor that causes a risk of degeneration of the trade mark.

88. However, as I have already mentioned, the Court did not condemn keyword advertising using third party trade marks as such but linked the question of its permissibility to the contents of the ad displayed in the sponsored link. If the conjunction of a keyword and an ad in the sponsored link would as such amount to dilution, then any trade mark would be blurred if it were chosen as a keyword leading to an ad of an undertaking other than that of the trade mark proprietor.

89. In this case the sponsored link shown after the internet user has typed the search term ‘interflora’ does not itself include the sign or any similar sign. As I have explained earlier, in the case of a trade mark covering goods and services provided by a commercial network of enterprises this does not exclude the possibility of an error to the effect that there is an economic link between the trade mark and the advertiser. In other words, an adverse effect to the origin function is possible even if the trade mark is not mentioned in the ad displayed in the sponsored link.

90. However, I do not think that dilution of a trade mark, i.e. weakening of its meaning as denoting goods or services of a specific abstract commercial origin, could legally be seen as resulting from advertising where the trade mark is not mentioned. After all, blurring in the sense of loss of distinctiveness means that the sign perceived by the consumer is acquiring an alternative meaning in his mind. The alternative meaning can either be an ambivalent indication of different goods or services from different sources, in the case of dissimilar goods or services, or that of a generic category of goods or services, in the case of identical or similar ones. (67)

91. In my opinion, the use of third party trade marks as keywords in search engine advertising is detrimental to the distinctiveness of a trade mark with a reputation in cases of identical goods or services when the following conditions are met: the sign is mentioned or displayed in the ad in the sponsored link, and the marketing message or communication in the ad uses the sign in a generic sense to refer to a category or class of goods or services, and not as distinguishing between goods and services of different origins….

100. Interflora contends that the keyword advertising by Marks & Spencer has considerably increased its own advertising costs because of the rise of the price per click charged by Google resulting from competition in relation to these AdWords.

Thus, the proposed test for blurring by Internet usage of trademarks in this opinion seems to contemplate that blurring will not occur due to Adwords unless the trademarks are used in the ad text or imagery.  Eric Pfanner of The New York Times points out that the decision could make advertisers in Europe cautious about purchasing Adwords ads.  However, OUT-LAW.com and The Register correctly note that “Though Jääskinen outlined an expanded area in which trade mark owners could take successful actions, he said that in this case Interflora was unlikely to succeed in arguing that M&S’s use of its term as a trigger was an unlawful blurring of, tarnishment of or free riding on its trade mark.”

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