James Perrin

EU Ruling over Trademarked Keywords: Interflora Vs M&S

22nd Sep 2011 News, Industry News, PPC Blog 4 minutes to read

The European Court of Justice (ECJ) has made a ruling on the Interflora VS M&S case with regards to Brand Bidding on PPC keywords, and the ruling could have huge ramifications for the world of PPC.

The issue arose back before Valentine’s Day, when Interflora noticed something amiss when customers searched for ‘Interflora Flowers’ within search engines. They noticed that Marks & Spencer were showing for their brand related key terms within the paid-for search results.

As it turns out M&S had been bidding for the keyword ‘Interflora’ and as a result having their ads shown for whenever this keyword was searched for. Understandably the international flower delivery service weren’t best pleased, ‘Interflora’ is a trademark name and any user searching for this term are clearly looking for this brand and no one else.

What the Ruling States

The ECJ have published the ruling on their site, which is the C-323/09 case labelled Judgment. There are many points to consider, but the main issue is that brand holders across Europe will now potentially have far greater control over their trademark, in particular where, when and how their trademark name is used. However it’s in the details that we discover the crux of the ruling.

Whilst this may sound similar to last year’s judgement, preventing people bidding for brand related products to sell fake versions of goods such as GHD hair straighteners or Louis Vuitton handbags, there is a difference. This ruling appears to be more encompassing than this past one, and in particular relates to the use of trademark names as opposed to branded products.

Two Sides to the Story

Some are viewing this as a win for Interflora, whilst others suggest it may be a little more complicated than that. Interflora themselves have announced they are delighted with the European Court ruling, which they state has been ruled in their favour, however the judgment still needs to be applied to the UK High Court before any judgement can be made if Interflora have suffered any ‘reputational damage’ due to M&S’s PPC campaign.

According to the Interflora blog, the judgement states that, “the use by a competitor of a keyword identical to the trade mark in relation to identical goods or services has an adverse effect on the investment in the trade mark where that use substantially interferes with the brand’s reputation and its ability to attract and retain consumers.”

However, according to Econsultancy, the crux of the judgement is that trademark owners are “not entitled to prevent advertisements displayed by competitors on the basis of keywords corresponding to that trademark.” This means that the ruling will not legally prevent competitors from bidding on trademark terms. However, bidding is one thing, something that is still legal, but it means that Interflora’s trademark is protected in other ways, mainly if and when used in ad text.

Did Interflora Really ‘Win’?

Interflora’s suggestion this is a ‘win’ for them is what’s been most confusing. For example, Dan Barker concurs with Econsultancy in that this is more of a victory for M&S rather than Interflora. Here he points to two pivotal pieces of the ruling which state that, one, Interflora could not argue if an internet user can tell if there is independence between the two companies; and two, that the use of keywords fall within the ambit of fair competition – crudely speaking.

There are many small companies that make money off the back of trademark brands. You only have to think about all the re-sellers of products and all of the associated services and you get the idea that numerous companies rely on these brand related terms. However the judgement has shed more light onto the use of text ads and not necessarily bids which are still legally fair game.

For example, it’s important for any PPC ads not to cause reputational damage to the owner of the trademark and they must have a clear distinction between the trademark product or service and themselves.

So Who Were the ‘Winners’?

Well in an interview with Business Week, Nick Rose, head of property litigation at Field Fisher Waterhouse LLP said, “This ruling is a score-draw…[it’s] helpful for brand owners [whilst] it leaves some room for Marks & Spencer to claim they’re not liable in this case”

So that’s it, according to the ruling it’s fair game and in the spirit of competition to bid on trademark keywords. But anyone using text in their ads need to tread very very carefully, but experienced PPC users will know this already.

The irony of this is that you could argue that Interflora’s SEO campaign has benefitted immensely from all of this PR; however the flip side is that their PPC campaign would have suffered, can you image all of those impressions from people searching for Interflora today? A process which no doubt has affected their Click through Rate.

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