Mr Justice Arnold last week referred two cases to the ECJ, the
European Union's highest court, so that it could decide whether or
not the use of a trade mark as a trigger for someone else's
advertising is trade mark infringement.
But he said that even if the ECJ was to rule on the issue, which
is not certain, it could still leave British businesses in the dark
because Google's UK and Ireland trade mark policy is different to
that in the rest of the EU.
"Since May 2008 Google has had a different policy in the United
Kingdom and Ireland to its policy elsewhere in Europe," he said in
his ruling. "That in itself is fairly remarkable given that the
relevant law is, or should be, essentially the same throughout
Europe. It may mean, however, that the common European set of
answers must be amplified or qualified so far as the position in
the United Kingdom and Ireland is concerned."
Pressure is building on the ECJ to clear up the increasingly
contentious area of trade mark law. Mr Justice Arnold said that
already three French cases had been referred to the Court, along
with two German cases and one Dutch one. Last week he added two
British cases to that list.
They all seek clarification on whether or not the use of a trade
marked term as a keyword constitutes "use in trade", and therefore
trade mark infringement, according to EU law. Companies buy the
right for their adverts to appear beside the 'natural' search
results when a particular keyword is typed into the search
engine.
Mr Justice Arnold put off making a final decision in a dispute
between Interflora and Marks & Spencer (M&S), saying that
it can only be settled once the ECJ has cleared up the status of
keywords. Pinsent Masons, the law firm behind OUT-LAW.COM, is
acting for Interflora in the case.
The dispute centred on the biggest of the keyword systems,
Google's AdWords. M&S bought the right for its ads to be
displayed when terms such as 'Interflora' and 'Interflora flowers'
were searched for on the site.
The adverts triggered by the keywords promoted M&S's own
flower delivery service, though when the court checked Google, the
M&S ads were displayed below Interflora's own.
Google used to take down adverts which were triggered by other
people's trade marks when it was told about them, but it changed
its UK and Ireland policy in May 2008 to one that applies in the US
and Canada. As long as trade marks are not used in the text of ads
the adverts can stay up, it now says.
It has since made that situation its policy in another 190
countries, though the UK and Ireland are still the only two EU
nations where that is the case.
The High Court heard that the policy change had drastically
altered Interflora's cost of keyword advertising since, for the
first time, it had to compete with others for the right to have its
ads displayed beside the search results for its own brands.
"Interflora's bidding costs for their keywords during the nine
days leading up to Valentine's Day increased from 2p per click in
2008 to 23-28p per click in 2009," said the High Court ruling.
"Interflora estimate that in total their costs will have increased
by about $750,000 in the year from 5 May 2008."
Interflora argued that the use of its brands as keywords
constituted use in trade of registered trade marks, which would be
trade mark law infringement.
M&S argued that its use of the terms was not 'use in trade',
and that there is no likelihood of confusion between the two flower
services. It said that the law was unclear and that the Court
should not find against it without clarification from the ECJ.
Interflora agreed that the ECJ should resolve the questions of
European law before the case proceeded further. It asked, though,
that M&S be prevented from bidding for Interflora keywords
while the ECJ considered the questions referred to it. The Court
refused that, saying that the company had not asked for an
injunction when it first lodged its case, and that the case itself
was lodged seven months after the action complained of.
"It seems to me that it is now too late for Interflora to turn
around and say that M & S should be prevented from bidding
pending the receipt of guidance from the ECJ," he said.
Mr Justice Arnold also referred aspects of a dispute between
make up firm L'Oréal and eBay to the ECJ on similar grounds last
week. L'Oréal complained of keyword-generated search engine ads
which linked through to eBay pages selling goods using the trade
marked terms.
L'Oréal's case is slightly different in that in this case it is
not objecting to all keyword uses, only the use of its trade marks
in relation to eBay sales of goods that themselves infringe its
trade mark rights, such as counterfeits or grey imports.
EBay argued in that case that the sponsored links did not
constitute 'use' of the trade mark, and that any use was not 'in
relation to' infringing goods or 'in the course of trade' unless
all the goods listed were infringing, which was not necessarily the
case.
The Court said that the ECJ would have to rule on whether eBay's
way of doing business breaches the terms of the EU's Trade Marks
Directive.
EBay claimed that the E-Commerce Directive protects it. Article
14 of that Directive says that service providers who store and host
material for others are not liable for material which breaks the
law as long as they do not know it is going on.
Mr Justice Arnold said that he preferred L'Oréal's arguments to
eBay's on the issue, but that it, too, would need to be referred to
the ECJ for clarification.
He also said that the ECJ would have to decide what kind of
injunction against eBay would be suitable under Article 11 of the
Enforcement Directive.
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