European Court issues guidance on adwords

Posted: 29th September 2011

The European Court of Justice has handed down guidance of importance to all advertisers who use the internet for advertising that incorporates keywords. It is common in such cases for the advertisement to be set up to appear if a search term is entered which contains the name or other words relating to a competitor.

The case in question was brought by Interflora. It claimed Marks and Spencer (M&S) was in breach of its trade mark by arranging a Google ‘adwords’ campaign which led to an advertisement from M&S being displayed that offered fresh flowers for delivery the next day if the word ‘Interflora’ was entered into the search engine.
Several legal arguments were advanced, but crucial to the decision of the Court was the question of whether a ‘reasonably well-informed and reasonably observant’ internet user would be confused as a result of the ad about whether the flowers came from Interflora or M&S. It was not sufficient that some people might be confused: the confusion would have to arise in the minds of reasonably informed and observant users.
The Court rejected the assertion that the use of a trade mark in such circumstances should be prohibited, concluding that use of a competitor’s trade mark in advertising does not prevent its owner from using it ‘to inform and win over consumers’, nor does the use of the trade mark as an adword.