Interflora Nips Keyword Ads in the Bud

A case concerning the use of a competitor’s name in ‘keyword’ marketing for Internet searches has now been decided and the ruling has implications for those who use such practices.

The dispute involved Marks & Spencer (M&S) and Interflora. M&S had used ‘Interflora’ as a keyword in its Internet marketing, with the result that users who Googled ‘Interflora’ would see M&S near the top of their search results.

The case went to the Court of Justice of the European Union (CJEU) for a ruling on the application of the law on the use of a rival’s trade mark in keywords before being passed back to the High Court for judgment.

In the light of the CJEU’s ruling, the Court ruled that the way in which Interflora trades, which involves all members trading under their own names, and the fact that the company also has commercial relationships with a number of other substantial organisations meant that it was reasonable to assume that it would not be clear to a ‘well informed and reasonably observant’ user of the Internet that M&S is in fact a competitor of Interflora.

The result is that M&S will have to pay damages (to be assessed later) to Interflora in respect of the latter’s lost profits.