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In 2013 Pinsent Masons’ IP team won the landmark ‘first-of-type’ Google AdWords litigation for Interflora against Marks & Spencer.

The result prevents M&S from using the Google AdWords programme – keyword advertising – to promote its flower delivery service by reference to the trade mark ‘Interflora’.

The case highlights Pinsent Masons’ ability to lead at the cutting edge of the law, and the result was internationally anticipated and has implications on keyword advertising across the globe.

As a result of the judgment, distinctive international brands have a precedent that suggests no one should bid on their brand via keyword advertising.

As well as being a ‘first of type’ keyword advertising judgment, the case broke new ground regarding the evidence required to show consumer confusion, with Pinsent Masons devising a strategy utilising Google Analytics and other online metrics rather than traditional survey evidence.

Background to the case

Enter a search term on Google and the search results page instantly delivers relevant listings both as adverts and ‘natural’ results. Competitors pay Google to sponsor ‘keywords’ so that their adverts appear at the top of the search results page in the ‘golden box’. Keyword advertising is worth around £3bn a year in the UK alone most of which is spent on Google’s AdWords programme.

In May 2008 Google changed its trade mark policy which for the first time allowed companies to “bid” on competitors’ trade marks in the Google AdWords advertising programme.

This meant that Marks & Spencer (and other companies) could use the Interflora trade mark as an AdWord to advertise its flower delivery service so that when a customer used Google to search for flowers with the term “Interflora”, adverts for Marks & Spencer appeared in the golden box, alongside adverts for florists in Interflora’s flower delivery network. Prior to the change in policy, the Google search results page showed only results for Interflora.

This had two major financial implications for Interflora. First, Interflora’s advertising costs went up over 3000%. Second, Interflora lost business to Marks & Spencer and other competitors as the conversion rate of customers from ‘search to purchase’ dropped dramatically as a result of competitor keyword bidding.

Pinsent Masons proactively identified and approached organisations likely to be affected. Interflora was one of the companies identified and needed to move quickly to protect its market share. It instructed the firm to pursue an action against all those competitors bidding on the Interflora trade mark.

Pinsent Masons cleared the “Google bidding landscape” until only two companies remained, Marks & Spencer and Flowers Direct, against whom proceedings were issued in December 2008.

A dynamic landscape

The landmark judgment followed a five year battle involving a reference to the Court of Justice of the European Union (“CJEU”) and two trips to the Court of Appeal all before the trial of the action.

The injunction not only prevented M&S from actively using the Interflora trade mark, but also forced M&S to “negative match” Interflora so as to exclude it from all AdWords campaigns relevant to flowers.

It was an extremely high profile case and achieved widespread coverage in the national, legal and trade press. Securing a successful outcome was far from straightforward.

When Interflora launched proceedings against M&S, Pinsent Masons deliberately limited the case to only two types of trade mark infringement – the so called “double identity” (same mark, same goods) and “free-riding” (taking unfair advantage of the Interflora trade mark) – to avoid the need for consumer survey evidence.

However, in concurrent actions taken against Google in France, the CJEU made new law and ruled that even when an identical mark is used for identical goods, the test for infringement requires the national court to determine that the competitor’s sponsored link does not allow a “reasonably well-informed and reasonably observant internet user” to tell if the advert for the goods is for those of the trade mark owner or those of the competitor. The CJEU reference in the Interflora case confirmed that this “average internet user” confusion test was applicable.

To find evidence to satisfy this, Pinsent Masons conducted two pilot surveys to gather witnesses to prove that there was confusion among ‘average internet users’. At first instance, Justice Arnold admitted the evidence from one of the pilot surveys. M&S appealed and in overturning the decision and refusing to allow the evidence, the Court of Appeal re wrote the law on the admissibility of survey evidence.

Given that the M&S appeal was not due to be heard until November and the trial was due to start in April 2013, in order to protect Interflora’s position Pinsent Masons undertook a second exercise to obtain evidence from average internet users. Again, Arnold J allowed the evidence and again, in April 2013, the Court of Appeal overturned him.

It was now less than two weeks before the start of the trial and Pinsent Masons had to proceed without the benefit of a survey to show the “confusion” evidence typically used in trade mark cases.

Novel thinking

The team conducted a detailed analysis of the “Google Analytics” data and other online metrics which advertisers use to track the internet users’ journey from initial search to final purchase. This anonymised “big data” evidence showed that where a customer used Google to search for Interflora and visited M&S thinking it to be part of the Interflora network, the customer would “bounce” immediately back to the Google search results page, confused as to why he or she had not landed on the desired Interflora home page. By comparison the data showed that those customers that searched for Interflora on Google and then visited the official Interflora website, stayed on the Interflora website for a considerable length of time, often to complete a purchase.

Justice Arnold accepted that this evidence could only be explained on the basis that it showed that average internet users were confused by a Google search results page which included M&S when they had searched for Interflora.

It was the first time that a court had accepted this type of “big data” evidence as a proxy for actual evidence of customer confusion.

The result

As mentioned above, the importance of this case was reflected in the long-running media coverage of the matter. The judgment was reported by national media including The Financial Times, The Times, The Guardian and key trade titles such as The Lawyer and World Intellectual Property.

Since the injunction was awarded against M&S the “Google Landscape” has remained clear of competitors bidding on the Interflora trade mark, meaning the ruling has had a huge deterrent effect. In financial terms this means that Interflora’s Google bid costs are at an historic low and its “search to purchase” conversion rates are back to pre-May 2008 levels.

For further information please contact:

Photo of Iain Connor

Iain Connor

Partner

 

t: + 44 (0) 20 7418 8260
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