Interflora vs Marks & Spencer: The facts, the judgement and the implications

A 5 year battle of PPC flower power was decided in the High Court this week, where the law on trademark infringement and paid search advertising intertwined.

The Facts

The case, Marks & Spencer v Interflora concerned M&S bidding on the competitor trademarked term ‘interflora’ on Google Adwords. Estimated to have increased M&S flower sales by £1,000,000 and cost Interflora an extra US$750,000 in Adwords advertising spend; Interflora claimed M&S were guilty of trademark infringement and should pay damages for unlawful keyword advertising.

The Judgement

The European Court of Justice advised a separate legal test in this digital demise. Would a ‘well-informed and reasonable observant internet user’ on Google, understand the M&S ad would lead them to a separate flower delivery entity. The UK judge found users believed the M&S flower delivery service was part of the Interflora network, and therefore infringed the Interflora trade mark.

The Implications for PPC

This case may however, still reserve the option to bid on competitor brands within the realms of Google’s advertising empire.
Google, although lenient now, held a more draconian policy when this case was first brought forward, with no competitive brand bidding permitted. Gradually, as re-sellers started to advertise, aggressive and more expensive PPC competitor campaigns have become a crucial part of bidding strategies and indeed, Google’s Adwords income.

In this case, Justice Arnold confirmed a reasonable user was not able to easily tell whether they were buying flowers from Interflora, or in fact a competitor brand, M&S.
However, the court found a difference between this, and what a reasonable person knew to be a competitor and still click on it. The latter is fine.

Furthermore, if bidding on a competitor’s keyword would clearly tell users of an alternative service or brand, this was not breaching the law. Such is the nature of a commercial competition.
While many brands have ‘gentlemen agreements’ thereby promising not to bid on each other’s brand names, there also lies possible problems when the PPC keyword type of ‘Broad match’ is brought into consideration. Here, for example, if M&S bid on the broad match term ‘flower delivery service’ and a user searched for ‘Interflora flower delivery service’, the M&S ad may still show despite them not bidding on the word ‘Interflora’. This, although mentioned in the judgement, remains an overlooked issue.

Interesting still, is the future of aggregator sites, affiliate ads, and comparison companies which claim to actually be the competitors. They will not be legally justified in driving consumers to their site unless it is clear they are a separate entity.

To avoid liability, PPC specialists should ensure competitor Adwords campaigns display ad copy and a URL that makes clear the distinction between brands. Would a reasonable person see the competitor ad and think it was the ad of the searched for brand/sub-entity of that brand? In most situations, especially in bigger well-known brands, a reasonable person would differentiate between competitors.

This case acknowledges the need for legal guidelines in digital advertising. It upholds principles against online trickery and misleading advertising while recognising commercial competition as an important part of any industry.
There will be a further trial to determine the amount of compensation owed to Interflora by M&S. Perhaps a sorry bouquet is in order.