War of the roses continues as Court of Appeal orders Interflora v M&S retrial

In the early summer of 2013 we reported on the outcome at the High Court of the important trade mark dispute between Interflora and Marks & Spencer concerning the latter's use of the former's trade mark as a paid-for Google AdWord (Blooming trade marks) to promote its flower delivery service.

In that case, Mr Justice Arnold recognised a determination from the Court of Justice of the European Union (CJEU) that it was possible lawfully to make use of a competitor's trade mark(s) in keyword advertising, provided that the "essential function" of the trade mark (as a badge of origin) was not undermined by creating confusion amongst users/viewers to the effect that they were buying the brand owner's goods and not those of the online advertiser.

However, he found that in the particular case of Marks & Spencer's use of the Interflora marks, M&S had failed to make it clear (particularly in light of Interflora's business model of attaching its brand to independent floristry retailers) that the goods and services it was promoting on Google were not in fact being supplied by Interflora (perhaps "through" M&S stores as part of their network). He added that the "reasonably well-informed and reasonably observant internet user" would still have been confused as to which company lay behind the promotion and duly found against Marks & Spencer in the claim of trade mark infringement.

M&S appealed the judgment and on earlier this month, the Court of Appeal took the highly unusual step of ordering a retrial of the substantive case, citing a number of what it considered to be errors of law by Mr Justice Arnold in reaching his original conclusions. It is thought that this may well be the first ever instance of the retrial of a trade mark infringement action in the UK.

The Court of Appeal was invited, but declined, to make its own finding on the question of infringement since it had not had the opportunity to review all the documentary and oral evidence available to the trial Judge and citing the principle that appellate courts should be extremely wary of evaluative and qualitative assessments made by a trial judge. However, the Court was not confident that in the absence of what it said were the errors made by the trial judge, he would have reached the same conclusion.

Central to that finding is the Court of Appeal's rejection of Mr Justice Arnold's interpretation of the earlier case of Google France v Louis Vuitton to the effect that where a case of alleged infringement involves the use by the Defendant of an identical mark for identical goods and services to that which is registered by the Claimant, then the assessment of the effect upon the "essential function" of the trade mark should be considered by application of a "likelihood of confusion" test with a reversed burden of proof. In other words, that it was then for the Defendant (the user of the AdWords in this context) to prove that they'd done enough in their advert so that confusion was not caused and the essential function of the trade mark was not undermined.

The Court of Appeal strongly rejected this imposition of a legal onus of proof upon the advertiser but was careful to distinguish this (suggesting that the trial Judge had insufficiently drawn such a distinction) from the obligation in practice upon advertisers to ensure that their adverts demonstrated sufficient clarity as to the origin of the goods being promoted. Advertisers should (the Court held) do enough to enable the average reasonably well-informed consumer to ascertain the origin of goods, but were not under a positive duty to avoid confusion in this context.

The Court of Appeal reflected that the original judgment had been very finely-balanced and expressed concern that the errors of law to which it referred had impacted upon Mr Justice Arnold's interpretation of the evidence. Trade mark owners, online advertisers and intellectual property professionals will now all be watching for the outcome of this unprecedented retrial with anticipation.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.