“Whereas the protection afforded by the registered trade mark, the function of which is in particular to guarantee the trade mark as an indication of origin, is absolute in the case of identity between the mark and the sign and goods or services; whereas the protection applies also in case of similarity between the mark and the sign and the goods or services; whereas it is indispensable to give an interpretation of the concept of similarity in relation to the likelihood of confusion; … the likelihood of confusion … constitutes the specific condition for such protection.”
“1. The registered trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade: (a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered; (b) any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark. 2. Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark. 3. The following, inter alia, may be prohibited under paragraphs 1 and 2: (a) affixing the sign to the goods or to the packaging thereof; (b) offering the goods, or putting them on the market or stocking them for these purposes under that sign, or offering or supplying services thereunder; (c) importing or exporting the goods under the sign; (d) using the sign on business papers and in advertising. …” (a) any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered; (b) any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark. (a) affixing the sign to the goods or to the packaging thereof; (b) offering the goods, or putting them on the market or stocking them for these purposes under that sign, or offering or supplying services thereunder; (c) importing or exporting the goods under the sign; (d) using the sign on business papers and in advertising. …”
“A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade: … (c) any sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.”
“M&S Flowers Online Beautiful Fresh Flowers & Plants. Order by 5.00pm for Next Day Delivery. www.marksandspencer.com/flowers”
“… Thus M & S had made no attempt to prove that customers who search for, say, "interflora.co.uk" (and thus are clearly looking for the Interflora website), but click through from one M & S's advertisements and end up ordering flowers from M & S, do so because they have been persuaded by the advertisement to order flowers from what they appreciate is a competitive service. M & S's failure to adduce such evidence does not mean that it should be inferred that the evidence would have assisted Interflora; but it does mean that M & S cannot rely upon such evidence to rebut the conclusions which Interflora say should be drawn from the evidence which is before the court. ”
“… I am required to consider the impact of M & S's advertisements viewed in the context of the SERPs on reasonably well-informed and reasonably observant internet users. The evidence in this case enables me to put myself in the position of the reasonably well-informed and reasonably observant internet user. I have no doubt that the majority of consumers who click on M & S's advertisements do so because they have been persuaded to take their custom to M & S and not because they believe that M & S is part of the Interflora network. That does not exclude the possibility that a significant proportion of consumers do believe that there is a connection, however.”
“318. Conclusion. Taking into account the factors mentioned by the CJEU, the factors relied upon by Interflora and the factors relied upon by M & S, the conclusion I have reached is that, as at6 May 2008 , the M & S advertisements which are the subject of Interflora's claim did not enable reasonably well-informed and reasonably attentive internet users, or enabled them only with difficulty, to ascertain whether the service referred to in the advertisements originated from the proprietor of the Trade Marks, or an undertaking economically connected with it, or originated from a third party. On the contrary, as at6 May 2008 , a significant proportion of the consumers who searched for "interflora" and the other Signs, and then clicked on M & S's advertisements displayed in response to those searches, were led to believe, incorrectly, that M & S's flower delivery service was part of the Interflora network. Thus M & S's use of the Signs had an adverse effect on the origin function of the Trade Marks. Furthermore, I conclude that this is still the case even now. It follows that M & S has infringed the Trade Marks under Article 5(1)(a) of the Directive and Article 9(1)(a) of the Regulation. ”
“I have no doubt that the majority of consumers who click on M & S's advertisements do so because they have been persuaded to take their custom to M & S and not because they believe that M & S is part of the Interflora network.”
“I do not doubt that, as at6 May 2008 , the majority of internet users were aware of this distinction, or that, since then, the proportion of internet users who are aware of it has steadily increased.”
“No doubt, many consumers worked out for themselves that they were being presented with advertisements by competitors to the brand they had searched for despite not being told this. Furthermore, I am confident that nowadays the majority of consumers appreciate this. But I consider that a significant proportion do not.”
“51. With regard, first, to the advertiser purchasing the referencing service and choosing as a keyword a sign identical with another’s trade mark, it must be held that that advertiser is using that sign within the meaning of that case law. 52. From the advertiser’s point of view, the selection of a keyword identical with a trade mark has the object and effect of displaying an advertising link to the site on which he offers his goods or services for sale. Since the sign selected as a keyword is the means used to trigger that ad display, it cannot be disputed that the advertiser indeed uses it in the context of commercial activity and not as a private matter.”
“56. In that regard, suffice it to note that the use, by a third party, of a sign identical with, or similar to, the proprietor’s trade mark implies, at the very least, that that third party uses the sign in its own commercial communication. A referencing service provider allows its clients to use signs which are identical with, or similar to, trade marks, without itself using those signs.”
“69. In that situation, characterised by the fact that a sign identical with a trade mark is selected as a keyword by a competitor of the proprietor of the mark with the aim of offering internet users an alternative to the goods or services of that proprietor, there is a use of that sign in relation to the goods or services of that competitor.”
“82. The essential function of a trade mark is to guarantee the identity of the origin of the marked goods or service to the consumer or end user by enabling him to distinguish the goods or service from others which have another origin (see, to that effect,Case C-39/97 Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc [1998] E.C.R. I-5507; [1999] E.T.M.R. 1 at [28], andCase C-120/04 Medion AG v Thomson Multimedia Sales Germany & Austria GmbH [2005] E.C.R. I-8551; [2006] E.T.M.R. 13 at [23]). 83. The question whether that function of the trade mark is adversely affected when internet users are shown, on the basis of a keyword identical with a mark, a third party’s ad, such as that of a competitor of the proprietor of that mark, depends in particular on the manner in which that ad is presented. 84. The function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party (see, to that effect, Céline [2007] E.T.M.R. 80 at [27] and the case law cited). 85. In such a situation, which is, moreover, characterised by the fact that the ad in question appears immediately after entry of the trade mark as a search term by the internet user concerned and is displayed at a point when the trade mark is, in its capacity as a search term, also displayed on the screen, the internet user may err as to the origin of the goods or services in question. In those circumstances, the use by the third party of the sign identical with the mark as a keyword triggering the display of that ad is liable to create the impression that there is a material link in the course of trade between the goods or services in question and the proprietor of the trade mark (see, by way of analogy, Arsenal Football Club [2003] E.T.M.R. 19 at [56], andCase C-245/02 Anheuser-Busch Inc v Budějovický Budvar, Národní Podnik [2004] E.C.R. I-10989; [2005] E.T.M.R. 27 at [60]). 86. Still with regard to adverse effect on the function of indicating origin, it is worthwhile noting that the need for transparency in the display of advertisements on the internet is emphasised in the EU legislation on electronic commerce. Having regard to the interests of fair trading and consumer protection, referred to in recital 29 in the preamble to Directive 2000/31, Article 6 of that directive lays down the rule that the natural or legal person on whose behalf a commercial communication which is part of an information society service is made must be clearly identifiable. 87. Although it thus proves to be the case that advertisers on the internet can, as appropriate, be made liable under rules governing other areas of law, such as the rules on unfair competition, the fact nonetheless remains that the allegedly unlawful use on the internet of signs identical with, or similar to, trade marks lends itself to examination from the perspective of trade mark law. Having regard to the essential function of a trade mark, which, in the area of electronic commerce, consists in particular in enabling internet users browsing the ads displayed in response to a search relating to a specific trade mark to distinguish the goods or services of the proprietor of that mark from those which have a different origin, that proprietor must be entitled to prohibit the display of third-party ads which internet users may erroneously perceive as emanating from that proprietor. 88. It is for the national court to assess, on a case-by-case basis, whether the facts of the dispute before it indicate adverse effects, or a risk thereof, on the function of indicating origin as described at [84] of the present judgment. 89. In the case where a third party’s ad suggests that there is an economic link between that third party and the proprietor of the trade mark, the conclusion must be that there is an adverse effect on the function of indicating origin. 90. In the case where the ad, while not suggesting the existence of an economic link, is vague to such an extent on the origin of the goods or services at issue that normally informed and reasonably attentive internet users are unable to determine, on the basis of the advertising link and the commercial message attached thereto, whether the advertiser is a third party vis-à-vis the proprietor of the trade mark or, on the contrary, economically linked to that proprietor, the conclusion must also be that there is an adverse effect on that function of the trade mark.”
“35. In respect of the function of indicating origin, the Court held that the question whether that function is adversely affected when internet users are shown, on the basis of a keyword identical with a mark, a third party’s ad depends in particular on the manner in which that ad is presented. The function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party (Google France [2010] E.T.M.R. 30 at [83] and [84]). 36. On that point the Court also stated that, in the case where a third party’s ad suggests that there is an economic link between that third party and the proprietor of the trade mark, the conclusion must be that there is an adverse effect on the function of indicating origin. Similarly, in the case where the ad, while not suggesting the existence of an economic link, is vague to such an extent on the origin of the goods or services at issue that normally informed and reasonably attentive internet users are unable to determine, on the basis of the advertising link and the commercial message attached thereto, whether the advertiser is a third party vis-à-vis the proprietor of the trade mark or, on the contrary, economically linked to that proprietor, the conclusion must also be that there is an adverse effect on that function of the trade mark (Google France [2010] E.T.M.R. 30 at [89] and [90]).”
“38. The risk that the public might believe that the goods or services in question come from the same undertaking or, as the case may be, from economically-linked undertakings, constitutes a likelihood of confusion (see, inter alia,Case C-342/97 Lloyd Schuhabrik Meyer & Co. GmbH v Klijsen Handel BV [1999] E.C.R. I-3819; [1999] E.T.M.R. 690 at [17],Case C-120/04 Medion AG v Thomson Multimedia Sales Germany & Austria GmbH [2005] E.C.R. I-8551; [2006] E.T.M.R. 13 at [26], andCase C-102/07 Adidas AG v Marca Mode CV [2008] E.C.R. I-2439; [2008] E.T.M.R. 44 at [28]). 39. It follows that, should the rule set out in Article 5(1)(b) of Directive 89/104 be applicable to the dispute in the main proceedings, it will be for the national court to hold whether there is a likelihood of confusion when internet users are shown, on the basis of a keyword similar to a mark, a third party’s ad which does not enable normally informed and reasonably attentive internet users, or enable them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party. 40. The points made at [36] of this judgment are applicable by analogy.”
“41. In the light of the foregoing, the answer to Question 1 is that Article 5(1) of Directive 89/104 must be interpreted as meaning that the proprietor of a trade mark is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with or similar to that trade mark which that advertiser has, without the consent of the proprietor, selected in connection with an internet referencing service, goods or services identical with those for which that mark is registered, in the case where that ad does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party.”
“51. The risk that the public might believe that the goods or services in question come from the same undertaking or, as the case may be, from economically-linked undertakings, constitutes a likelihood of confusion (see, inter alia,Case C-342/97 Lloyd Schuhfabrik Meyer & Co. GmbH v Klijsen Handel BV [1999] E.C.R. I-3819; [1999] E.T.M.R. 690 at [17];Case C-120/04 Medion AG v Thomson Multimedia Sales Germany & Austria GmbH [2005] E.C.R. I-8551; [2006] E.T.M.R. 13 at [26]; andCase C-102/07 Adidas AG v Marca Mode CV [2008] E.C.R. I-2439; [2008] E.T.M.R. 44 at [28]). 52. It follows that, should the rule set out in Article 5(1)(b) of Directive 89/104 be applicable, it will be for the national court to determine whether there is a likelihood of confusion when internet users are shown, on the basis of a keyword similar to a trade mark, a third party’s ad which does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or from an undertaking economically linked to it or, on the contrary, originate from a third party (BergSpechte [2010] E.T.M.R. 33 at [39]). 53. The guidance set out in [35] above is, by analogy, applicable. 54. In the light of all of the foregoing, the answer to the first and fourth questions is that Article 5(1) of Directive 89/104 must be interpreted as meaning that a trade mark proprietor is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with, or similar to, that mark, which that advertiser has selected for an internet referencing service without the consent of the proprietor, in relation to goods or services identical to those in respect of which the mark is registered, where that advertising does not enable average internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or from an undertaking economically linked to it or, on the contrary, originate from a third party.”
“67. That condition is the expression of the duty to act fairly in relation to the legitimate interests of the trade mark proprietor. The issue of whether that condition has been satisfied must be assessed by, inter alia, taking account of the extent to which the use by the third party is understood by the relevant public, or at least by a significant section of that public, as establishing a link between the third party’s goods and those of the trade mark proprietor or a person authorised to use the trade mark, and of the extent to which the third party ought to have been aware of that (Case C-245/02 Anheuser-Busch Inc v Budějovický Budvar, Národní Podnik [2004] E.C.R. I-10989; [2005] E.T.M.R. 27 at [82] and [83], and Céline [2007] E.T.M.R. 80 at [33] and [34]). 68. As has been pointed out in reply to the first and fourth questions, however, use by an advertiser of a sign identical with, or similar to, a trade mark for an internet referencing service comes within Article 5(1) of Directive 89/104 where that use does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the trade mark proprietor or from an undertaking economically linked to it or, on the contrary, originate from a third party. 69. Thus, the circumstances under which a trade mark proprietor is, pursuant to Article 5(1) of Directive 89/104, entitled to prevent an advertiser from using a sign identical with, or similar to, that trade mark as a keyword may, in the light of the case-law referred to in [67] above, easily correspond to a situation in which the advertiser cannot claim that it is acting in accordance with honest practices in industrial or commercial matters, and cannot therefore validly rely on the exception provided for in Article 6(1) of that Directive. 70. In that regard, it must be held, first, that one of the characteristics of the situation referred to in [68] above lies precisely in the fact that the ad is likely to cause at least a significant section of the target public to establish a link between the goods or services to which it refers and the goods or services of the trade mark proprietor or persons authorised to use that trade mark. Secondly, in the event that the national court finds that the ad does not enable average internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the trade mark proprietor or from a third party, it is unlikely that the advertiser can genuinely claim not to have been aware of the ambiguity thus caused by its ad. It is the advertiser itself, in the context of its professional strategy and with full knowledge of the economic sector in which it operates, which chose a keyword corresponding to another person’s trade mark and which, alone or with the assistance of the referencing service provider, designed the ad and therefore decided how it should be presented. 71. Taking account of those factors, it must be concluded that, in the situation described in [54] and [68] above, the advertiser cannot, in principle, claim to have acted in accordance with honest practices in industrial or commercial matters. It is, however, for the national court to carry out an overall assessment of all the relevant circumstances in order to determine whether there may be evidence to justify a contrary finding (see, to that effect,Case C-100/02 Gerolsteiner & Brunnen GmbH & Co. v Putsch GmbH [2004] E.C.R. I-691; [2004] E.T.M.R. 40 at [26], and Anheuser-Busch [2005] E.T.M.R. 27 at [84] and the case law cited). 72. In the light of all of the foregoing considerations, the answer to the second question is that art.6 of Directive 89/104 must be interpreted as meaning that, where use by advertisers of signs identical with, or similar to, trade marks as keywords for an internet referencing service is liable to be prohibited pursuant to Article 5 of that directive, those advertisers cannot, in general, rely on the exception provided for in Article 6(1) in order to avoid such a prohibition. It is, however, for the national court to determine, in the light of the particular circumstances of the case, whether or not there was, in fact, a use, within the terms of Article 6(1), which could be regarded as having been made in accordance with honest practices in industrial or commercial matters.”
“35. Interflora submits that that condition must, in accordance with an already established body of case law, be understood as meaning that paragraph 1(a) of Article 5 of Directive 89/104 and of Article 9 of Regulation 40/94 protects the trade mark proprietor against any adverse effect on any of the functions of the mark. According to M&S, however, such an interpretation does not follow unambiguously from the case law and risks creating an imbalance as between the interest in protecting intellectual property and the interest in free competition. The European Commission, for its part, submits that paragraph 1(a) protects the trade mark proprietor solely against acts affecting the mark’s function of providing an indication of origin. In its submission, the trade mark’s other functions can, at most, play a role in the interpretation of Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation 40/94, which concern the rights conferred by trade marks with a reputation. 36. It follows from the wording of Article 5(1) of Directive 89/104 and from the tenth recital in the preamble thereto that the laws of the Member States have been harmonised inasmuch as the exclusive right conferred by a trade mark affords the proprietor of the mark “absolute” protection against the use by third parties of signs which are identical with that mark in relation to identical goods or services, whilst, where there is not identity on two counts, only the existence of a likelihood of confusion enables the proprietor to rely successfully on its exclusive right. That distinction between the protection conferred by Article 5(1)(a) and that provided for in Article 5(1)(b) was espoused, so far as the Community trade mark is concerned, by the seventh recital to, and Article 9(1) of, Regulation 40/94. 37. Although the EU legislature described as “absolute” the protection against the unauthorised use of signs identical with a trade mark in relation to goods or services identical with those for which the mark is registered, the Court has put that description into perspective by stating that, as extensive as it may be, the protection conferred by Article 5(1)(a) of Directive 89/104 is intended solely to enable the trade mark proprietor to protect its specific interests as proprietor of the mark, that is to say, to ensure that the trade mark can fulfil its functions. The Court has concluded that the exercise of the exclusive right conferred by the trade mark must be reserved to cases in which a third party’s use of the sign adversely affects, or is liable adversely to affect, the functions of the trade mark, in particular its essential function of guaranteeing to consumers the origin of the goods (seeCase C-206/01 Arsenal Football Club Plc v Reed [2002] E.C.R. I-10273; [2003] R.P.C. 9 at [51]). 38. That interpretation of Article 5(1)(a) of Directive 89/104 has been restated on many occasions and applied in relation to Article 9(1)(a) of Regulation 40/94 (see, inter alia, as regards Directive 89/104,Case C-17/06 Céline Sarl v Céline SA [2007] E.C.R. I-7041; [2007] E.T.M.R. 80 at [16], andCase C-533/06 O2 Holdings Ltd v Hutchison 3G UK Ltd [2008] E.C.R. I-4231; [2008] R.P.C. 33 at [57], and, as regards Regulation 40/94, the order inCase C-62/08 UDV North America Inc v Brandtraders NV [2009] E.C.R. I-1279; [2010] E.T.M.R. 25 at [42], and Google France [2010] R.P.C. 19 at [75]). There has been further clarification of that interpretation to the effect that those provisions enable the proprietor of the trade mark to rely on its exclusive right where there is, or is liable to be, an adverse effect on one of the functions of the trade mark, irrespective of whether the function concerned is the essential function of indicating the origin of the product or service covered by the trade mark or one of the other functions of the mark, such as that of guaranteeing the quality of that product or service or that of communication, investment or advertising (L’Oréal [2010] R.P.C. 1 at [63] and [65], and Google France [2010] R.P.C. 19 at [77] and [79]). 39. With regard to the functions of the trade mark other than that of indicating origin, it should be noted that both the EU legislature—by using the words “in particular” in the tenth recital to Directive 89/104 and in the seventh recital to Regulation 40/94 —and the Court—by using since its judgment in Arsenal Football Club [2003] R.P.C. 9 the words “functions of the trade mark”—have indicated that a trade mark’s function of indicating origin is not the only function of the mark that is worthy of protection against injury by third parties. They have thus taken into account the fact that a trade mark is often, in addition to an indication of the origin of the goods or services, an instrument of commercial strategy used, inter alia, for advertising purposes or to acquire a reputation in order to develop consumer loyalty. 40. Admittedly, a trade mark is always supposed to fulfil its function of indicating origin, whereas it performs its other functions only insofar as its proprietor uses it to that end, in particular for the purposes of advertising or investment. However, that difference between the essential function of the trade mark and its other functions can in no way justify—when a trade mark fulfils one or more of those other functions—excluding from the scope of Article 5(1)(a) of Directive 89/104 and Article 9(1)(a) of Regulation 40/94 acts adversely affecting those functions. Likewise, there are no grounds for holding that only trade marks with a reputation are capable of having functions other than that of indicating origin.”
“48. By contrast, a situation such as that described in question 4(a) [the fact that the sign was liable to mislead some members of the public] may be relevant for the purpose of applying the rule set out in Article 5(1)(a) of Directive 89/104 and Article 9(1)(a) of Regulation 40/94 . 49. Indeed, if the referring court’s assessments of the facts were to show that M&S’s advertising, displayed in response to searches performed by internet users using the word “interflora”, may lead those users to believe, incorrectly, that the flower-delivery service offered by M&S is part of Interflora’s commercial network, it would have to be concluded that that advertising does not allow it to be determined whether M&S is a third party in relation to the proprietor of the trade mark or whether, on the contrary, it is economically linked to that proprietor. In those circumstances, the function of the INTERFLORA trade mark of indicating origin would be adversely affected. 50. In that context, as has been observed at [44] of this judgment, the relevant public comprises reasonably well-informed and reasonably observant internet users. Therefore, the fact that some internet users may have had difficulty grasping that the service provided by M&S is independent from that of Interflora is not a sufficient basis for a finding that the function of indicating origin has been adversely affected.”
“53. Having regard to that situation and to the other matters that it may consider relevant, the referring court will, in the absence of any general knowledge such as that referred to at [51] of this judgment, have to determine whether or not the use of words such as “M&S Flowers” in an advertisement such as the one set out at [19] of this judgment is sufficient to enable a reasonably well-informed and reasonably observant internet user who has entered search terms including the word “interflora” to tell that the flower-delivery service offered does not originate from Interflora.”
“57. However, the mere fact that the use, by a third party, of a sign identical with a trade mark in relation to goods or services identical with those for which that mark is registered obliges the proprietor of that mark to intensify its advertising in order to maintain or enhance its profile with consumers is not a sufficient basis, in every case, for concluding that the trade mark’s advertising function is adversely affected. In that regard, although the trade mark is an essential element in the system of undistorted competition which European law seeks to establish (see, in particular,Case C-59/08 Copad SA v Christian Dior Couture SA [2009] E.C.R. I-3421; [2009] F.S.R. 22 at [22]), its purpose is not, however, to protect its proprietor against practices inherent in competition. 58. Internet advertising on the basis of keywords corresponding to trade marks constitutes such a practice in that its aim, as a general rule, is merely to offer internet users alternatives to the goods or services of the proprietors of those trade marks (see, to that effect, Google France [2010] R.P.C. 19 at [69]). 59. The selection of a sign identical with another person’s trade mark, in a referencing service with the characteristics of “AdWords”, does not, moreover, have the effect of denying the proprietor of that trade mark the opportunity of using its mark effectively to inform and win over consumers (see, in that regard, Google France [2010] R.P.C. 19 at [96] and [97]).”
“62. When the use by a third party, such as a competitor of the trade mark proprietor, of a sign identical with the trade mark in relation to goods or services identical with those for which the mark is registered substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty, the third party’s use must be regarded as adversely affecting the trade mark’s investment function. The proprietor is, as a consequence, entitled to prevent such use under Article 5(1)(a) of Directive 89/104 or, in the case of a Community trade mark, under Article 9(1)(a) of Regulation 40/94. 63. In a situation in which the trade mark already enjoys such a reputation, the investment function is adversely affected where use by a third party of a sign identical with that mark in relation to identical goods or services affects that reputation and thereby jeopardises its maintenance. As the Court has already held, the proprietor of a trade mark must be able, by virtue of the exclusive right conferred upon it by the mark, to prevent such use (Case C-324/09 L’Oréal SA v eBay International AG [2011] R.P.C. 27 at [83]).”
“64. However, it cannot be accepted that the proprietor of a trade mark may—in conditions of fair competition that respect the trade mark’s function as an indication of origin—prevent a competitor from using a sign identical with that trade mark in relation to goods or services identical with those for which the mark is registered, if the only consequence of that use is to oblige the proprietor of that trade mark to adapt its efforts to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty. Likewise, the fact that that use may prompt some consumers to switch from goods or services bearing that trade mark cannot be successfully relied on by the proprietor of the mark.”
“80. However, contrary to Interflora’s contention, the selection of a sign which is identical with or similar to a trade mark with a reputation as a keyword within an internet referencing service does not necessarily contribute to such a development. 81. Thus, when the use, as a keyword, of a sign corresponding to a trade mark with a reputation triggers the display of an advertisement which enables the reasonably well-informed and reasonably observant internet user to tell that the goods or services offered originate not from the proprietor of the trade mark but, on the contrary, from a competitor of that proprietor, the conclusion will have to be that the trade mark’s distinctiveness has not been reduced by that use, the latter having merely served to draw the internet user’s attention to the existence of an alternative product or service to that of the proprietor of the trade mark.”
“91. By contrast, where the advertisement displayed on the internet on the basis of a keyword corresponding to a trade mark with a reputation puts forward—without offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution or tarnishment and without, moreover, adversely affecting the functions of the trade mark concerned—an alternative to the goods or services of the proprietor of the trade mark with a reputation, it must be concluded that such use falls, as a rule, within the ambit of fair competition in the sector for the goods or services concerned and is thus not without “due cause” for the purposes of Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation 40/94. ”
“2. Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation 40/94 must be interpreted as meaning that the proprietor of a trade mark with a reputation is entitled to prevent a competitor from advertising on the basis of a keyword corresponding to that trade mark, which the competitor has, without the proprietor’s consent, selected in an internet referencing service, where the competitor thereby takes unfair advantage of the distinctive character or repute of the trade mark (free-riding) or where the advertising is detrimental to that distinctive character (dilution) or to that repute (tarnishment). Advertising on the basis of such a keyword is detrimental to the distinctive character of a trade mark with a reputation (dilution) if, for example, it contributes to turning that trade mark into a generic term. By contrast, the proprietor of a trade mark with a reputation is not entitled to prevent, inter alia, advertisements displayed by competitors on the basis of keywords corresponding to that trade mark, which put forward—without offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution or tarnishment and without, moreover, adversely affecting the functions of the trade mark with a reputation—an alternative to the goods or services of the proprietor of that mark.”
"It is appropriate to protect all consumers from unfair commercial practices; however the Court of Justice has found it necessary in adjudicating on advertising cases since the enactment of Directive 84/450/EEC to examine the effect on a notional, typical consumer. In line with the principle of proportionality, and to permit the effective application of the protections contained in it, this Directive takes as a benchmark the average consumer, who is reasonably well-informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors, as interpreted by the Court of Justice, but also contains provisions aimed at preventing the exploitation of consumers whose characteristics make them particularly vulnerable to unfair commercial practices. Where a commercial practice is specifically aimed at a particular group of consumers, such as children, it is desirable that the impact of the commercial practice be assessed from the perspective of the average member of that group. It is therefore appropriate to include in the list of practices which are in all circumstances unfair a provision which, without imposing an outright ban on advertising directed at children, protects them from direct exhortations to purchase. The average consumer test is not a statistical test. National courts and authorities will have to exercise their own faculty of judgement, having regard to the case-law of the Court of Justice, to determine the typical reaction of the average consumer in a given case."
"30. There have been several cases in which the Court of Justice has had to consider whether a description, trade mark or promotional text is misleading under the provisions of the Treaty or of secondary legislation. Whenever the evidence and information before it seemed sufficient and the solution clear, it has settled the issue itself rather than leaving the final decision for the national court (see, in particular,Case C-362/88 GB-INNO-BM[1990] ECR I-667 ;Case C-238/89 Pall[1990] ECR I-4827 ;Case C-126/91 Yves Rocher[1993] ECR I-2361 ;Case C-315/92 Verband Sozialer Wettbewerb[1994] ECR I-317 ;Case C-456/93 Langguth[1995] ECR I-1737 ; andCase C-470/93 Mars[1995] ECR I-1923 ). 31. In those cases, in order to determine whether the description, trade mark or promotional description or statement in question was liable to mislead the purchaser, the Court took into account the presumed expectations of an average consumer who is reasonably well-informed and reasonably observant and circumspect, without ordering an expert's report or commissioning a consumer research poll. 32. So, national courts ought, in general, to be able to assess, on the same conditions, any misleading effect of a description or statement designed to promote sales. .… 34. InCase C-373/90 X[1992] ECR I-131 , paragraphs 15 and 16, in which Directive 84/450 was in point, the Court held, inter alia, that it was for the national court to ascertain in the circumstances of the particular case and bearing in mind the consumers to which the advertising was addressed, whether advertising describing cars as new despite the fact that they had been registered for the purposes of importation, without ever having been driven on a road, could be misleading insofar as, on the one hand, it sought to conceal the fact that the cars advertised as new were registered before importation and, on the other hand, that fact would have deterred a significant number of consumers from making a purchase. The Court also held that advertising regarding the lower prices of the cars could be held to be misleading only if it were established that the decision to buy on the part of a significant number of consumers to whom the advertising in question was addressed was made in ignorance of the fact that the lower price of the vehicles was matched by a smaller number of accessories on the cars sold by the parallel importer. 35. The Court has not therefore ruled out the possibility that, in certain circumstances at least, a national court might decide, in accordance with its own national law, to order an expert's opinion or commission a consumer research poll for the purpose of clarifying whether a promotional description or statement is misleading or not. 36. In the absence of any Community provision on this point, it is for the national court, which may find it necessary to order such a survey, to determine, in accordance with its own national law, the percentage of consumers misled by a promotional description or statement that, in its view, would be sufficiently significant in order to justify, where appropriate, banning its use. 37. The answer to be given to the questions referred must therefore be that, in order to determine whether a statement or description designed to promote sales of eggs is liable to mislead the purchaser, in breach of Article 10(2)(e) of Regulation No 1907/90, the national court must take into account the presumed expectations which it evokes in an average consumer who is reasonably well-informed and reasonably observant and circumspect. However, Community law does not preclude the possibility that, where the national court has particular difficulty in assessing the misleading nature of the statement or description in question, it may have recourse, under the conditions laid down by its own national law, to a consumer research poll or an expert's report as guidance for its judgment."
"60. As is clear from paragraph 51 of the judgment in Windsurfing Chiemsee, in assessing the distinctive character of a mark in respect of which registration has been applied for, the following may inter alia also be taken into account: … the proportion of the relevant class of persons who, because of the mark, identify goods as originating from a particular undertaking; … 61. The Court has also held that if, on the basis of those factors, the competent authority finds that the relevant class of persons, or at least a significant proportion thereof, identify goods as originating from a particular undertaking because of the trade mark, it must in any event hold that the requirement for registering the mark laid down in Article 3(3) of the Directive is satisfied (Windsurfing Chiemsee, paragraph 52). 62. However, it must first be pointed out that the Court has made clear that the circumstances in which the requirement under Article 3(3) of the Directive may be regarded as satisfied cannot be shown to exist solely by reference to general, abstract data, such as predetermined percentages (Windsurfing Chiemsee, paragraph 52). 63. Second, the distinctive character of a sign consisting in the shape of a product, even that acquired by the use made of it, must be assessed in the light of the presumed expectations of an average consumer of the category of goods or services in question, who is reasonably well-informed and reasonably observant and circumspect (see, to that effect, the judgment inCase C-210/96 Gut Springenheide and Tusky[1998] ECR I-4657 , paragraph 31). 64. Finally, the identification, by the relevant class of persons, of the product as originating from a given undertaking must be as a result of the use of the mark as a trade mark and thus as a result of the nature and effect of it, which make it capable of distinguishing the product concerned from those of other undertakings. 65. In the light of those considerations, the answer to the third question must be that, where a trader has been the only supplier of particular goods to the market, extensive use of a sign which consists of the shape of those goods may be sufficient to give the sign a distinctive character for the purposes of Article 3(3) of the Directive in circumstances where, as a result of that use, a substantial proportion of the relevant class of persons associates that shape with that trader and no other undertaking or believes that goods of that shape come from that trader. However, it is for the national court to verify that the circumstances in which the requirement under that provision is satisfied are shown to exist on the basis of specific and reliable data, that the presumed expectations of an average consumer of the category of goods or services in question, who is reasonably well-informed and reasonably observant and circumspect, are taken into account and that the identification, by the relevant class of persons, of the product as originating from a given undertaking is as a result of the use of the mark as a trade mark."
“82. The Court has thus already been led to state that advertising relating to the lower prices of cars that are parallel imports can be considered to be misleading only if it is established that the decision to buy on the part of a significant number of consumers to whom the advertising in question is addressed was made in ignorance of the fact that the lower price of the vehicles was matched by a smaller number of accessories on the cars sold by the parallel importer (X, paragraph 16). 83. Analogously, comparative advertising relating to the general level of the prices charged by competing chains of stores in respect of their comparable ranges of products and to the amount that can be saved by consumers purchasing their basic consumables from one of those chains rather than the other should, for example, be considered to be misleading if it is established, in the light of all the relevant circumstances of the particular case, that the decision to buy on the part of a significant number of consumers to whom that advertising is addressed is made in the mistaken belief that all the advertiser's products have been taken into account in calculating the general price level, and the amount of savings, that are claimed by the advertising. The same must be true if it is established that such a decision is made in the mistaken belief that that amount will be saved by consumers irrespective of the nature and quantity of the products which they acquire from the advertiser or, for example, in the mistaken belief that all the advertiser's products without exception are cheaper than those of his competitors.”
"261. At first sight the Court of Justice's reasoning appears broadly consistent with the Court's treatment of this question in Arsenal, Anheuser-Busch, Céline,Case C-48/05 Adam Opel AG v Autec AG[2007] ECR I-1017 and L'Oréal v Bellure. On closer examination, however, the Court's approach appears to have shifted in two respects. 262. First, unlike in Arsenal (see the passage at [54]-[60] …) and L'Oréal v Bellure (see the passage at [61]-[62] …), the Court does not draw a distinction between use which is liable to affect the origin function on the one hand and 'purely descriptive' use on the other hand. Nor, unlike in Anheuser-Busch (see the passage at [59]-[64] …), does it draw a contrast between use which is liable to affect the origin function on the one hand and use 'for purposes other than to distinguish the goods concerned' on the other hand. Nor, unlike in Céline (at [27]), does the Court say that use of a sign is liable adversely to affect the origin function if 'consumers are liable to interpret it as designating the origin of the goods or services in question'. Thus the Court appears no longer to be saying that it is enough that the sign is used as a trade mark in relation to the goods or services in question. 263. Secondly, and perhaps more importantly, the Court introduces a new test in [84], which despite the reference to Céline is not to be found in that case. The new test is that the origin function of the trade mark is adversely affected if the use of the sign considered in context does not enable average consumers, or enables them only with difficulty, to ascertain whether the goods or services referred to under the sign originate from the proprietor of the trade mark or an undertaking economically connected to it, or from a third party. It appears from [84]-[85] and [89]-[90] that this is a test of likelihood of confusion, but with a reversed onus i.e. the onus lies upon the third party to show that the use of the sign in context is sufficiently clear that there is no possibility of confusion on the part of the average consumer as to the origin of the advertised goods or services. 264. It will be appreciated that, in stating the test in this way, I have generalised it from the specific form stated by the Court, which is only applicable to keyword advertising on the internet. It is difficult to see, however, why the test for adverse effect on the origin function should be different in that situation to the situations in issue in cases like Arsenal and L'Oréal v Bellure. Nor does the Court say that the test is different in that situation."
“234. … First, in DataCard I was not addressing the legal burden of proving infringement under Article 5(1)(a) of the Directive and Article 9(1)(a) of the Regulation, which I agree lies on the trade mark proprietor. Rather, I was considering who bore the evidential onus in relation to this particular issue. 235. Secondly, while I accept that, in general, neither the Directive nor the Regulation harmonise national procedural rules, as counsel for Interflora pointed out, we are concerned here with infringement claims under Article 5(1)(a) of the Directive and Article 9(1)(a) of the Regulation, and thus strictly speaking the passage from the tenth recital does not apply. Furthermore, the CJEU has allocated the burden of proof with regard to particular issues in other Article 5(1)(a)/Article 9(1)(a) cases. Thus in Joined Cases C-414/99 to C-416/99 Zino Davidoff SA v A & G Imports Ltd[2001] ECR I-8691 , a case about parallel imports, the Court of Justice held at [54] that "it is for the trader alleging consent to prove it and not for the trade mark proprietor to demonstrate its absence". InCase C-244/00 Van Doren + Q GmbH v Lifestyle sports + sportswear Handelgesellschaft mbH[2003] ECR I-3051 , another case involving parallel imports, the Court of Justice "split" the burden, holding that where the defendant established a risk of market partition, the onus of proving that the goods were first placed on the market outside the EEA fell on the trade mark proprietor: see [37]-[42]. 236. Thirdly, I find it difficult to see how else to interpret what the Court of Justice said in Google France at [84]. The Court's phraseology involves a negative condition: "The function of indicating the origin of the trade mark is adversely affected if the ad does not enable … users, or enables them only with difficulty to ascertain…". That is to say, the origin function is adversely affected unless the advertisement does enable users without difficulty to ascertain this. This implies that it is for the advertiser to show that its advertisement does enable users to ascertain this without difficulty. 237. Fourthly, I consider that this reading is supported by what the Court of Justice says in the following paragraphs. At [85] the Court says that "the use by the third party of the sign identical with the mark as a keyword triggering the display of that ad is liable to create the impression that there is a material link in the course of trade …". Thus the Court is saying that the fact that the advertisement is triggered by the entry by the users of a keyword which is identical to the trade mark is likely to make the user think that the advertisement is for the trade mark proprietor's goods or services. It follows that it is for the advertiser to ensure that that impression is dispelled by the advertisement. At [86]-[87] the Court refers to the requirement of transparency in commercial communications forming part of or constituting an information society service laid down by Article 6 of European Parliament and Council Directive 2000/31/EC of8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market ("the E-Commerce Directive"). Again, this indicates that it is for the advertiser to ensure that the advertisement is transparent as to the source of the goods or services advertised. At [90] the Court says that if the ad is "vague to such an extent on the origin of the goods or services … that … users are unable to determine … whether the advertiser is a third party … or … economically linked to the proprietor, the conclusion must also be that there is an adverse effect". Again, this indicates that it is for the advertiser to ensure that the advertisement is clear as to the origin of the goods or services advertised. 238. Fifthly, if the onus is not on the advertiser, the consequence would appear to be to impose on the trade mark proprietor a requirement to prove something akin to a likelihood of confusion. That cannot be correct for at least two reasons. First, it is plain on the face of Article 5(1)(a) and Article 9(1)(a) that there is no requirement for a likelihood of confusion, in contradistinction to Article 5(1)(b) and Article 9(1)(b). Secondly, the Court of Justice expressly acknowledges at [77] that "the protection afforded by Article 5(1)(a) … and Article 9(1)(a) … is … more extensive than that provided for in the respective paragraphs (1(b) of those articles, the application of which requires that there be a likelihood of confusion". 239. Sixthly, my interpretation of what the Court of Justice has said is consistent with Article 16(1) of the TRIPS, which requires there to be at least a rebuttable presumption of a likelihood of confusion in double identity cases, whereas an interpretation which required the trade mark proprietor to prove a likelihood of confusion, or something akin to it, would not be. 239. Seventhly, I consider that my interpretation is supported by the subsequent case law, as discussed below.”
“… I accept that, when I referred to "no possibility of confusion", I put the matter too strongly. It would, I think, be more accurate to say that the onus lies on the third party to show that the use of the sign in context is sufficiently clear that there is no real risk of confusion on the part of the average consumer as to the origin of the advertised goods or services. ”
“70 In that regard, the issue of proof is raised when a dispute arises, that is to say, when the trade mark proprietor pleads interference with the exclusive rights conferred on it by Article 5(1) of the Directive and Article 9(1) of the Regulation. 71 The interference which may be pleaded consists either in the release for free circulation of the goods or an offering or sale of those goods which necessarily entails putting them on the market in the Community. 72 Interference is the condition for the exercise of the right of prohibition provided for in Article 5(3)(b) and (c) of the Directive and Article 9(2)(b) and (c) of the Regulation. 73 In respect of the issue of the onus of proving that interference, it must be pointed out, first, that if it were a matter for the national laws of the Member States, the consequence for trade mark proprietors could be that protection would vary according to the legal system concerned. The objective of ‘the same protection under the legal systems of all the Member States’ set out in the ninth recital in the preamble to the Directive, where it is described as fundamental, would not be attained (see, on the subject of the Directive, Zino Davidoff and Levi Strauss, cited above, paragraphs 41 and 42). 74 It must then be stated that, in a situation such as the one in the main proceedings, the onus of proving interference must lie with the trade mark proprietor who alleges it. If that is proven, it is then for the trader sued to prove the existence of the consent of the proprietor to the marketing of the goods in the Community (see, on the subject of the Directive, Zino Davidoff and LeviStrauss, cited above, paragraph 54).”
"266. At first blush, this passage appears to indicate that precisely the same test should be applied to determine both whether the origin function of the trade mark is liable to be affected under Article 5(1)(a) and whether there is a likelihood of confusion under Article 5(1)(b). I cannot believe that that is what the Court of Justice meant to say, however. Article 5(1)(a) contains no requirement for a likelihood of confusion, whereas Article 5(1)(b) does. The reason why Article 5(1)(a) contains no requirement for a likelihood of confusion is that a likelihood of confusion is presumed where a sign identical to the trade mark is used in relation to goods or services identical to those for which the trade mark is registered, as is required by Article 16(1) of the Agreement on Trade-related Aspects of Intellectual Property Rights. That is what recital (11) of the Directive means when it says that 'the protection afforded by the registered trade mark … should be absolute in the case of identity between the mark and the sign and the goods or services'. (In another sense, the protection is not absolute, of course, because it is subject to the defences under Articles 6 and 7 of the Directive.) Furthermore, in the case of Article 5(1)(b) it is clear from the Court's earlier jurisprudence that the onus lies upon the trade mark proprietor to establish the presence of a likelihood of confusion, not upon the third party to establish the absence of a likelihood of confusion. 267. Accordingly, it seems to me that the correct reading of [39] must be that the words 'it will be for the national court to hold whether there is a likelihood of confusion when' mean that the trade mark proprietor must establish a positive likelihood of confusion in order to succeed under Article 5(1)(b), and not merely the presence of circumstances which would suffice for the purposes of establishing an effect on the origin function under Article 5(1)(a). 268. Even if that is right, BergSpechte appears to confirm that the test which must be applied in order to determine whether the use of the sign complained of is liable to affect the origin function of the trade mark is a reverse likelihood of confusion test as discussed in paragraph 263 above. Thus the combined effect of the judgments in Google France and BergSpechte is to narrow the distinction between Article 5(1)(a) and Article 5(1)(b) even if they do not eliminate it."
“247. Counsel for M & S described this aspect of the Court of Justice's case law in his closing submissions successively as follows: "a conundrum", "unfathomable" and "it makes no sense". He submitted, however, that it was nevertheless this court's duty to apply the "plain unvarnished words" of the Court's judgments without struggling to understand the jurisprudential basis for them. I do not accept that submission. In my view one cannot hope to be able properly to apply the Court's judgments without trying to understand what they mean. I adhere to the opinion which I expressed in DataCard that the Court cannot have meant to say that the same test should be applied under both Article 5(1)(a)/Article 9(1)(a) and Article 5(1)(b)/Article 9(1)(b). I also adhere to the opinion that the interpretation which I offered in DataCard (as qualified above) is the best way in which to make sense of the Court's case law. ”
“… I understood [Mr Silverleaf] to be relying on my decision in Och-Ziff Management Europe Ltd v OCH Capital Ltd[2010] EWHC 2599 (Ch) , [2011] ETMR 1, although he did not cite it. In that case I held at [79]-[101] that initial interest confusion could be relied upon to establish a likelihood of confusion under Article 5(1)(b)/Article 9(1)(b). The implicit submission was that initial interest confusion is equally relevant to show an adverse effect on the origin function of the trade mark for the purposes of Article 5(1)(a)/Article 9(1)(a). I accept both of these submissions.”
“29. I am bound to say that I have sympathy with Marks and Spencer's complaint that it has been given notice of this material at a very late stage of these proceedings. As I observed at the beginning of this judgment, however, Marks and Spencer does not contend that the Civil Evidence Act Notice was served out of time. The lateness of service of the Civil Evidence Act Notice, as I understand it, is due to the lateness with which the parties ultimately agreed to exchange expert evidence. That being so, the mere fact that the material comes into the case at a rather late stage does not seem to me, in and of itself, to be a sufficient reason to regard Interflora's reliance upon it as unfair or prejudicial to Marks and Spencer. That is particularly so when it is borne in mind that I made the original suggestion that this kind of material be considered as long ago as24 February 2012 and that Interflora made it clear that they were going down this line in their list of documents served on16 August 2012 . 30. The point which most concerns me is whether it is fair for Interflora to be permitted to rely upon a selection of the academic literature in circumstances where I do not know what a wider search of the academic literature might throw up and whether or not there is academic literature, or indeed other official reports like the Ofcom reports, which could be relied upon by Marks and Spencer to rebut the proposition advanced by Interflora. 31. At the end of the day, it seems to me that that is not a matter which amounts to sufficient unfairness that I should exclude this evidence. Marks and Spencer has been on notice that this court would be interested in receiving independent and impartial evidence available from public sources simply at the cost of copying it for well over a year. If Marks and Spencer has not undertaken the kind of search of official reports and the academic literature that Interflora have undertaken, then it seems to me it has only itself to blame. 32. Finally, I think I should deal with one further point made by counsel for Marks and Spencer. He submitted that a further consideration to be taken into account in these circumstances was that the court should be astute to an attempt by parties like Interflora to turn the court itself into its own expert. I think that is a very real concern. I confess to discomfort at the proposition that scientific literature can be put before courts without the benefit of an expert's report to put the literature into context and without the opportunity for an expert to be cross-examined upon the contents of such literature. 33. Upon analysis, however, I think my discomfort relates to the ability of the court to understand and evaluate the material in question. Whatever might be the position in other cases, I do not consider that that is a difficulty which applies in the circumstances of the present case. I have looked at much of the material that is relied upon by Interflora during the course of counsel for Interflora's opening submissions in this case, when he took me to many of the documents in question. I have seen nothing which leads me to believe that I have any difficulty in understanding and evaluating the material in question. Accordingly, whatever might be the position in other cases, this factor does not cause me to exclude the evidence in this case.”
“PPC [pay per click] ads appear for different reasons to the natural search results. I will explain this in more detail below. However the links often appear on the screen in very similar ways. As a result, in my experience, not only do most people not know or appreciate the difference between the search results which have been generated by PPC and which have been generated by SEO [search engine optimisation] but many people do not know or understand that there is a difference.”
“[159] … Mr Rose expressed the view in his evidence that "in my experience, not only do most people not know or appreciate the difference between the search results which have been generated by PPC and which have generated by SEO, but many people do not know or understand that there is a difference". Again, Mr Rose cannot know this, but it represents an informed assessment from someone whose job it is to have an informed assessment on this subject. [160] Still further, Mr Bond's and Mr Rose's assessments are consistent with (a) the Ofcom reports concerning internet literacy, (b) the academic literature relied upon by Interflora (in particular, the Edelman and Gilchrist article) and (c) the Google eye tracking study.”
“301. Secondly, Interflora rely upon the analysis of Hitwise's data conducted by Mr Pandya which I have mentioned above. Mr Pandya identified a subgroup of consumers within its sample (referred to as "Segment A") who searched for Interflora-related terms on Google UK, clicked on a paid advertisement and then visited the M & S website provided that they did so within the same session (the end of a session being marked by 30 minutes of inactivity). The analysis was carried out on a quarterly basis, and the size of Segment A varied between about 4,400 and about 8,800 consumers. 302. Mr Pandya then compared the proportion of those in Segment A who visited Interflora after visiting M & S with the proportion of all visitors to the M & S website in its sample who did so. He was able to report statistically significant results for six quarters, namely Q1 2009, Q2 2009, Q3 2009, Q4 2009, Q1 2010 and Q1 2011. He found that people in Segment A were between 44 (Q1 2011) and 106 (Q2 2009) times more likely to visit Interflora after M & S than the average visitor to M & S. Thus in Q2 2009, 16% of Segment A did so, whereas on 0.15% of all visitors did so. Mr Pandya also compared the proportion of Segment A who visited Interflora after visiting M & S with the proportion of all visitors to the flowers section of M & S website in Hitwise's sample who did so. In this case he was able to report statistically significant results for four quarters, namely Q3 2009, Q4 2009, Q1 2010 and Q1 2011. He found that people in Segment A were between 7.3 (Q1 2011) and 10.9 (Q3 2009) times more likely to visit Interflora after M & S than the average visitor to the M & S flowers section. In my view it is the latter figures which are more relevant for present purposes. In addition, Mr Pandya compared the proportion of Segment A who visited Interflora after visiting M & S with the proportion of all visitors to 20 other flowers websites in the sample who did so. In this case he was able to report statistically significant results for three quarters, namely Q4 2009, Q1 2010 and Q1 2011. He found that people in Segment A were between 1.4 (Q1 2011) and 2.8 (Q1 2010) times more likely to visit Interflora after M & S than the average visitor to the other flowers websites. 303. A number of criticisms were put to Mr Pandya in cross-examination, but in my judgment none of them undermined his analysis. The main point which counsel for M & S relied on in his closing submissions was that Mr Pandya accepted that he was unable to determine what consumers' thought processes were, all he could report was their observed behaviour. As counsel for Interflora submitted, however, the fact that Mr Pandya was properly cautious about interpreting the data does not prevent the court from doing so. 304. Mr Pandya's analysis shows that consumers who searched for Interflora, clicked on an advertisement and then visited the M & S website were an order of magnitude more likely to visit Interflora's website after visiting the M & S website than the average visitor to the flowers section of the M & S website. Interflora's interpretation of this consists of two propositions. The first is that a significant number of consumers in Segment A decided after they had clicked through to the M & S website that it was not where they wanted to be and went to the Interflora website instead. The second is that the reason for this change of mind was that those consumers had clicked through from the M & S advertisement because they assumed from the appearance of the advertisement in response to their search that M & S was part of the Interflora network, but they realised that that was not the case when they clicked through to the M & S website and saw no reference to Interflora. 305. I do not think that M & S seriously challenges Interflora's first proposition, but M & S vigorously disputes that the second proposition follows from the first. As counsel for Interflora pointed out, however, M & S has not risen to the challenge of providing an alternative explanation of the data. In my judgment Interflora's interpretation of the data is persuasive and I accept it. 306. The second proposition involves an acceptance by Interflora that consumers who were initially confused by the M & S advertisement ceased to be confused after they had clicked through to the M & S website. Counsel for Interflora submitted that this did not detract from Interflora's case for two reasons. First, if there was initial confusion, it was probable that some consumers would remain confused after clicking through. Secondly, and in any event, such initial interest confusion was sufficient to establish Interflora's case under Article 5(1)(a)/Article 9(1)(a). So far as the latter point is concerned, I understood him to be relying on my decision in Och-Ziff Management Europe Ltd v OCH Capital Ltd[2010] EWHC 2599 (Ch) , [2011] ETMR 1, although he did not cite it. In that case I held at [79]-[101] that initial interest confusion could be relied upon to establish a likelihood of confusion under Article 5(1)(b)/Article 9(1)(b). The implicit submission was that initial interest confusion is equally relevant to show an adverse effect on the origin function of the trade mark for the purposes of Article 5(1)(a)/Article 9(1)(a). I accept both of these submissions.”
“Q. Really, am I not right in saying to you that looking at a sequence of events, without any timing data, but looking at a sequence of events, either a pathway or a sub-pathway is basically the same thing as looking at browsing on the net; all you are doing is looking at people browsing on the net? A. Yes, so our data is based on people's browsing behaviour on the net and then segmenting that based on the criteria that we are after. Q. Knowing the sequence in which they browse is not of itself telling you anything except that they browsed in the way and in the sequence they did, is it? A. Yes, so this is the actual behaviour that we saw from the data but it is difficult to [then] comment on the intent or any of that sort of thing, yes. Q. You say it is difficult and thank you for that, but is it in fact impossible to come to any conclusions on intent from this data that you have collected? A. Yes, so we cannot give the intent behind a particular behaviour. All we can report is a particular behaviour, but we are not in a position to give intent behind that behaviour. Q. You certainly cannot look into a consumer's mind to understand what their thought processes from this type of data? A. Precisely, that is correct.”
“290. More specifically, counsel for Interflora submitted that the evidence showed that many internet users in the UK do not appreciate the distinction between the natural search results and the paid advertisements on Google's SERPs. In my view, this is something that is likely to have changed over time. As the Ofcom reports show, as a general proposition, internet literacy has steadily increased over the last five years. Counsel for M & S submitted, and I agree, that many internet users learn by doing. In general, I consider that internet users are more likely to be aware both that there is a distinction and the broad nature of the distinction now than they were in May 2008. Considering all the evidence, however, I conclude that, even now, a significant proportion of internet users in the UK do not appreciate that, unlike the natural search results, the advertisements appear on the SERP because the advertisers have paid for the advertisements to be triggered by a keyword consisting of or related to the search term entered by the user.”
“11. I accept that the position is different, and less straightforward, in the scenario presently under consideration, because in this scenario M & S has not selected a keyword which is identical with, or even similar to, the Trade Marks. Nevertheless, I consider that M & S does “use” the sign “interflora”, albeit in a less direct way. What M & S is doing has the object and effect that a search by a consumer for “interflora” results in the display of M & S’s advertisement. Thus the SERP will contain both the sign “interflora” and M & S’s advertisement. In my judgment it is immaterial that this is achieved by a technical means which does not involve M & S selecting “interflora” itself as a keyword. I would add that I do not consider that this reasoning is inconsistent with what the CJEU said in Interflora (CJEU) at [47].”
“46. However, the territorial scope of the prohibition may, in certain circumstances, be restricted. The exclusive right of a Community trade mark proprietor, as provided for under Article 9(1) of Regulation No 40/94, is conferred in order to enable that proprietor to protect his specific interests as such, that is, to ensure that the trade mark is able to fulfil its functions. The exercise of that right must therefore be reserved to cases in which a third party’s use of the sign affects or is liable to affect the functions of the trade mark (see, to that effect, Joined Cases C-236/08 to C-238/08 Google France and Google[2010] ECR I-0000 , paragraph 75 and the case-law cited). 47. It follows, as the European Commission has pointed out, that the exclusive right of a Community trade mark proprietor and, hence, the territorial scope of that right, may not extend beyond what that right allows its proprietor to do in order to protect his trade mark, that is, to prohibit only uses which are liable to affect the functions of the trade mark. The acts or future acts of a defendant (namely the person whose use of the Community trade mark is complained of) which do not affect the functions of the Community trade mark, cannot therefore be prohibited. 48. Accordingly, if a Community trade mark court hearing a case in circumstances such as those of the main proceedings finds that the acts of infringement or threatened infringement of a Community trade mark are limited to a single Member State or to part of the territory of the European Union, in particular because the applicant for a prohibition order has restricted the territorial scope of its action in exercising its freedom to determine the extent of that action or because the defendant proves that the use of the sign at issue does not affect or is not liable to affect the functions of the trade mark, for example on linguistic grounds, that court must limit the territorial scope of the prohibition which it issues.”