Posts Tagged ‘EU’

Keywords – Marks & Spencer infringes INTERFLORA TM

Monday, July 15th, 2013

Marks & Spencer has been found to have infringed Interflora’s trade mark in the UK by ‘buying’ ads triggered by Google searches for the keyword INTERFLORA.

An example of the ads Arnold J found infringing:

Keyword search results

CLICK to enlarge

In Google France, the CJEU established that an advertiser would infringe a registered trade mark when its ads were triggered by a trade mark as a keyword where: [1]

“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 [1998] ECR I–5507, paragraph 28, and Case C–120/04 Medion [2005] ECR I–8551, paragraph 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, paragraph 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, paragraph 56, and Case C–245/02 Anheuser-Busch [2004] ECR I–10989, paragraph 60).

Arnold J found on the evidence that a significant section of the public were confused and so Marks & Spencer infringed.

It is not possible to do justice in a blog post to the full range of reasons[2] contributing to his Lordship’s conclusion. Some that stand out follow.

Arnold J accepted (at [316]) that the majority of UK internet users appreciated the difference between paid ads and natural or organic search results, but there was still a significant proportion of internet users in the UK who did not. His Lordship also accepted that “nowadays” the majority of consumers appreciate .

nowadays the majority of consumers appreciate [they are being presented with ads by competitors to the brand they had searched for]. But I consider that a significant proportion do not. (emphasis supplied)

Secondly, the nature of the INTERFLORA brand appears to have been crucial. As you will no doubt be familiar, INTERFLORA is a network. It operates through a network of agents who are usually (always?) branded under their own names and trade marks. Those customers who were not buying online from “interflora.co.uk” or “interflora.com”, for example, would typically go into a retail outlet operating under its own name (and which may display the INTERFLORA name and logo).

The significance of this (at [297] and [299]) was that there was great potential for those customers who realised they were dealing with Marks & Spencer when they clicked on the ad mistakenly to think it was part of the INTERFLORA network.

That potential was in fact borne out by the evidence. In particular, there was evidence from “Hitwise data” that people who (1) searched on the keyword INTERFLORA and (2) as a result clicked on a Marks & Spencer ad generated in response to the search (3) were between 44 and 106 times more likely than the average visitor to the M & S flowers site to leave the M & S site without purchasing and instead go on to an INTERFLORA site.

At [304] – [306], his Lordship accepted the propositions 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.

and such “initial interest” confusion was itself enough for trade mark infringement.

Thus, while Google doesn’t infringe by ‘selling’ keywords, the advertiser may and, in this case on Arnold J’s findings, did.

What, if anything, does it mean for us?

First off, the judgment is full of fascinating details about the “AdWords” and “search” market and the strategies that businesses deploy. For example, it appears that Google held around 90% of the global search (and paid advertising relating to search) market, with Bing and Yahoo! trailing out of site. There are also discussions of market research reports and Ofcom studies into what consumers understand when using the internet.

It is not clear whether Arnold J’s reasoning will provide us with much assistance here. First, while EU law does not appear to require use as a trade mark to infringe, the origin function referenced by the CJEU in Google France appears similar to our concept of use as a trade mark – as a badge of origin or to identify the trade source.[3]

Secondly, it seems doubtful that the considerations identified in [84] of Google France would be relevant at all under our law. The idea of examining whether the “normally informed and reasonably attentive internet users” could ascertain the trade source from the ad, or do so “only with difficulty”, indicates that the content of the advertisment may make it clear that the trade mark owner is not the source of the advertised product. However, a registered trade mark is infringed in Australia even if the trade source is made clear, for example by a disclaimer or other identifying factor. The type of analysis being engaged in under EU law is rather more like what would take place in a passing off action or action for misleading or deceptive conduct.[4]

Thirdly, our law does recognise the idea of “initial interest confusion”,[5] but the number of people who apparently went to M & S’ website and “clicked away” does rather highlight the difficulties with the concept as applied to web searches: clicking the back button, or even doing another web search in the browser, is not so costly as walking out of the shop, hopping back in your car and going looking for the intended destination.

Arguably, the most significant point could be the starting point identified at [288] – the Court of Justice’s recognition that:

keyword advertising is not inherently or inevitably objectionable from a trade mark perspective. On the contrary, the case law of the CJEU in this field recognises that, as a general rule, keyword advertising promotes competition ….

On this view, it was only the very special nature of INTERFLORA as a ‘network’ that convicted Marks & Spencer.

Interflora Inc v Marks and Spencer plc [2013] EWHC 1291 (Ch)


  1. See also [226] – [267] (esp.) of Arnold J’s judgment  ?
  2. Embracing some 318 paragraphs! His Lordship does start drawing the threads together at [295].  ?
  3. See *e.g. Optical 88 (No 2)* at [212].  ?
  4. See *e.g. Optical 88 (No 2)* at [99] and Crazy Ron’s at [86] – [88].  ?
  5. For example Southern Cross v Toowoomba at [5] but, at least in the context of misleading or deceptive conduct / passing off (yes, I know this is a post about registered trade marks) some brake may be imposed on that in at least some cases.  ?

Licensing recorded music

Monday, February 18th, 2013

While the European Commission is trying to reduce the number of licensors you have to deal with (and so reduce transaction costs), the Australian legislation as interpreted by the courts is causing them to proliferate:

IPKat on Max Planck comments on draft directive on collective rights management

Phonographic Performance Company of Australia Limited v Commercial Radio Australia Limited [2013] FCAFC 11

Yes, I know the EU is grappling with territorial issues and not, or not just, subject matter issues and, if someone were trying to set up an umbrella licence in Australia, it would be important to know who had what rights to include, but …

ECJ’s first case on Registered Community Design

Friday, October 28th, 2011

Case C-281/10 PepsiCo v Grupo Promer Mon Graphic

The excellent Class 99 blog has a summary focusing on the concept of “informed user”.

The IPkitties are typically loquacious.

Lid dip: Ray Hind

EU bans stem cell patents

Thursday, October 20th, 2011

The European Court of Justice has ruled that human embryonic stems cells are not patentable subject matter in the EU.

Article 6 of the Biotechnology Directive, 98/44/EC, provides:

1. Inventions shall be considered unpatentable where their commercial exploitation would be contrary to ordre public or morality; however, exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation.

2. On the basis of paragraph 1, the following, in particular, shall be considered unpatentable: (a) processes for cloning human beings; (b) processes for modifying the germ line genetic identity of human beings; (c) uses of human embryos for industrial or commercial purposes; (d) processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes.

A Mr Brüstle had a patent in Germany relating to isolated and purified neural precursor cells, processes for their production from embryonic stem cells and the use of neural precursor cells for the treatment of neural defects. It would appear this involved use of isolated and purified precursor cells having neural or glial properties, obtained from embryonic stem cells. That in turn appears to have involved removal of stem cells from the embryo at the blatocyst stage which, in turn, resulted in destruction of the embryo.

Greenpeace sought to invalidate it.

The ECJ had to consider first the meaning of human embryo:

– any human ovum after fertilisation, any non-fertilised human ovum into which the cell nucleus from a mature human cell has been transplanted and any non-fertilised human ovum whose division and further development have been stimulated by parthenogenesis constitute a ‘human embryo’ within the meaning of Article 6(2)(c) of the Directive;

However:

– it is for the referring court to ascertain, in the light of scientific developments, whether a stem cell obtained from a human embryo at the blastocyst stage constitutes a ‘human embryo’ within the meaning of Article 6(2)(c) of the Directive.

Secondly, the ECJ considered that the use of human embryos in research for patentable subject matter was prohibited by paragraph 6(2)(c), but use for the development of therapeutic or diagnostic purposes applied to human embryos could be patentable if useful.

Thirdly, the ECJ ruled that:

Article 6(2)(c) of the Directive excludes an invention from patentability where the technical teaching which is the subject-matter of the patent application requires the prior destruction of human embryos or their use as base material, whatever the stage at which that takes place and even if the description of the technical teaching claimed does not refer to the use of human embryos.

IPKat here; Scientific American here; Patent Docs here.  Lid dip Ian Pascarl and Penny Smith

S 18(2) of our Act provides:

(2) Human beings, and the biological processes for their generation, are not patentable inventions.

As a result of that prohibition, the Deputy Commissioner has rejected the patentability of

40. Claims 10 to 23 are directed to a method of growing preblastocyst human embryos. It is a method applied to a human embryo. The method has clear advantages in better simulating the natural environment, and reducing apoptosis of cells in the blastocyst, resulting in greater success in implantation, and babies of greater body mass and having fewer complications compared to IVF babies born without the benefit of the method – all of which demonstrates that the process is one that directly relates to the generation of a human being. The process is a biological process – it is a process involving the presence of a chemical such that the in vitro environment better simulates the natural fallopian tube environment. I am satisfied that these claims fall within the ambit of `biological processes for {the generation of human beings}’ as proscribed by s.18(2).

Fertilitescentrum AB and Luminis Pty. Ltd [2004] APO 19. There is presumably some scope to patent embryonic stem cells at least where they do not relate to the biological processes for the generation of human beings. Thus, in H Bion Inc v Commissioner of Patents [2010] FCA 539 a patent application entitled “Embryonic Stem Cell Line and Method of Preparing the Same was accepted. The acceptance was subsequently withdrawn, however, on grounds of fraud or misrepresentation. The decision does not make it clear what the fraud related to.

 

 

 

 

 

Talk on keywords, adwords and trade marks

Wednesday, September 15th, 2010

For anyone who may find some value in them, I have posted the slides from my IPSANZ talk ‘Of Keywords, Adwords and Trade Mark Infringers at Slideshare.

Class actions and antitrust

Thursday, July 15th, 2010

Following on from the post earlier this week about the findings that AstraZeneca had misused its market power in the EU over Losec, the Full Federal Court in Australia (Moore, Jessup and Dodds-Streeton JJ) has largely upheld an appeal against the primary Judge’s decision to strike out a Statement of Claim.

Unlike the AstraZeneca case, this case does not involve allegations of misuse of market power relating to a patented product; it concerns allegations about a price-fixing cartel for rubber compounds.

One interesting aspect about the case is that the litigation in Australia derives from a European Commission finding that Bayer AG and others had engaged in a global price fixing cartel for the rubber compounds. The applicants in this case allege that that cartel had ramifications in Australia causing them damage.

Another interesting aspect is that the applicants are bringing a class action to recover damages for the impact of the alleged cartel in Australia. In the IP field, we have recently seen the class action mechanism deployed to challenge the validity of patenting genes. Incidentally, the applicants’ solicitors in that case are the same as the applicants’ solicitors in this action.

Wright Rubber Products Pty Ltd v Bayer AG [2010] FCAFC 85

Misusing a patentee’s market power

Tuesday, July 13th, 2010

The Court of General Instance (formerly (?) the EU’s CFI) has upheld the European Commission’s ruling that AstraZeneca abused its dominant position in the market by practices designed to block or delay generic drugs competing with Losec from entering the market.

The abusive practices were:

  1. submitting deliberately misleading statements to patent agents, national patent offices and national courts in order to acquire or preserve supplementary protections certificates for omeprazole to which AstraZeneca was not entitled or to which it was entitled for a shorter duration; and
  2. requesting (and obtaining) the withdrawal of regulatory marketing authorisations for Losec capsules and replacing those marketing authorisations with marketing authorisations for Losec MUPS tablets.

The result of the second practice was to delay entry on to the market of competing generic products as they could not use the abridged marketing approval process.

The Court did reduce, however, the fine from Euros 60 million to Euros 52.5 million.

The case concerned patents for omeprazole, the patent protection for which has generated some controversy in Australia.

Like the EU, Australian law does provide for supplementary protection certificates and there is the potential for abridged marketing approval processes for generics (pdf – e.g). Art. 82 of the Treaty also has some resemblance to s 46 of the TPA and, while we might think that the EU has a fairly idiosyncratic approach to determining market power, the Hoffman-La Roche ruling relied on by the Court of General Instance has been referred to with approval by the High Court in Australia.

Case T?321/05 AstraZeneca AB v Commission

which has been conveniently summarised by Linklaters and Gibson Dunn.

Now, we might think this is an application of the peculiar EU approach to

Plant breeder’s rights in the EU

Wednesday, April 21st, 2010

The European Court of Justice has dismissed Ralf Schräder’s appeal from the rejection of its registration for plant breeder’s rights in plectranthus ornatus.

It would seem after detailed genetic testing, including travel to South Africa, the EU regulatory authorities have determined the variety the subject of the application is not distinct from a common South African plant.

IPKat has a good overview, with links to earlier stages in the dispute, here.

Case C?38/09 P Ralf Schräder v Community Plant Variety Office

Resale royalty right in the EU

Monday, April 19th, 2010

In a dispute over which of Salvador Dali’s heirs is entitled to the benefits of the Community Resale Royalty, the ECJ has ruled that this is a matter for national law.

The 1709 blog has a short report here; IPKat waxes lyrical here.

Case C?518/08, Fundación Gala-Salvador Dalí and Visual Entidad de Gestión de Artistas Plásticos (VEGAP) v Société des auteurs dans les arts graphiques et plastiques (ADAGP)

CAL was recently appointed to administer the absolutely inalienable artist’s resale royalty scheme under the Australian Act, Resale Royalty Right for Visual Artists Act 2009 (Cth), and Minister Garrett has announced that the scheme will come into force on 9 June 2010.

Section 15 of our Act will specify who the heirs can be – the person or person who satisfy “the succession test”:

Succession test
(1)  An entity satisfies the succession test in relation to resale royalty right on the commercial resale of an artistic work, if the entity satisfies:
(a)  criteria 1 and 2 (in subsections (2) and (3)); or
(b)  criteria 3 and 4 (in subsections (4) and (5)).
Criterion 1
(2)  The entity received its interest in the right by testamentary disposition, or in accordance with the rules of intestate succession, on the death of an individual.
Criterion 2
(3)  The entity is one of the following:
(a)  an individual with a beneficial interest in the right;
(b)  a charity or charitable institution with a beneficial interest in the right;
(c)  a community body with a beneficial interest in the right;
(d)  a person who holds an interest in the right in trust for:
(i)  an individual; or
(ii)  a charity or charitable institution; or
(iii)  a community body.
Criterion 3
(4)  The entity received its interest in the right on the winding up of a charity, charitable institution or a community body.
Criterion 4
(5)  The entity is a charity, charitable institution or a community body formed for substantially the same purposes as the body that was wound up.

Google’s sale of ‘trademarked’ keywords does not infringe in EU

Wednesday, March 24th, 2010

The European Court of Justice has ruled that the sale of ‘trademarked’ terms by Google as keyword triggers of advertising:

From IPKat reports. According to the IPKat, the rulings themselves:

1. Article 5(1)(a) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks and Article 9(1)(a) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark 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 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 advertisement 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.
2. An internet referencing service provider which stores, as a keyword, a sign identical with a trade mark and organises the display of advertisements on the basis of that keyword does not use that sign within the meaning of Article 5(1) and (2) of Directive 89/104 or of Article 9(1) of Regulation No 40/94.
3. Article 14 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) must be interpreted as meaning that the rule laid down therein applies to an internet referencing service provider in the case where that service provider has not played an active role of such a kind as to give it knowledge of, or control over, the data stored. If it has not played such a role, that service provider cannot be held liable for the data which it has stored at the request of an advertiser, unless, having obtained knowledge of the unlawful nature of those data or of that advertiser’s activities, it failed to act expeditiously to remove or to disable access to the data concerned.

IPKat threatens more detailed consideration in a later post.

Prof. Goldman provides a thoughtful analysis from a US perspective here.