Interflora: High Court considers infringement by broad matching without negative matching

On May 21 Mr Justice Arnold handed down judgment in Interflora Inc v Marks and Spencer Plc ([2013] EWHC 1291 (Ch)), and this author, in his comment for WTR, started his piece by stating that it “brought to an end (at first instance at least) the longstanding action”. It appears that he spoke far too soon, as on June 12 Mr Justice Arnold handed down a ruling on the terms of the injunction which necessarily included a supplemental ruling on infringement of Interflora’s marks through use of 'broad matching' without 'negative matching'. 

Google permit a variety of matching options when purchasing keywords. One option is 'exact match'. Google describe this as:

“[w]ith exact match, your ads can appear when someone searches for your exact keyword, without any other terms in the search. We'll also show your ad when someone searches for close variations of that specific keyword.”

Another option is the 'broad match', where Google describe the relationship between keywords and ads as:

“[t]he default matching option, broad match means that your ad may show if a search term contains your keyword terms in any order, and possibly along with other terms. Your ads can also show for close variations of your keywords.”

According to the supplemental judgment, the algorithm associated with broad matching means that, where M&S purchased a keyword such as 'flower delivery', a search for 'Interflora' can result in an advertisement for M&S being displayed on the search engine results page (SERP). This situation can be avoided by adding a negative keyword to the broad match. The negative keyword would match the search terms that the advertiser did not want to trigger their advertisement. In the above example, to avoid a search for 'Interflora' giving rise to an advertisement for M&S, M&S would have to negative match 'Interflora' (see here for further details of negative keywords).

Interflora had argued that such broad matching, in circumstances where M&S did not negative match 'Interflora', was also an infringement of its marks.

When writing the main judgment, the judge understood that:

“M&S accepted that it used the sign 'Interflora' within Article 5(1)(a) [of the First Trademarks Directive (89/104/EEC)]/Article 9(1)(a) [of the Community Trademark Regulation (40/94)] by arranging for the display of an M&S advertisement whenever an internet user searched for 'Interflora', whatever the precise keyword and matching algorithm that M&S had chosen to bid on”. 

However, when the parties presented their arguments on the terms of the appropriate injunction to follow judgment, it became apparent from the submissions that this was not the case. Indeed, M&S submitted as follows:

“With regard to Paragraph 1.2 of Interflora's proposed draft order, it must be noted that there is no determination in the judgment to the effect that failing to negative match (as opposed to positively matching) a keyword can constitute 'use' of a registered trademark for the purposes of infringement under Article 5(1)(a) [of the directive]/Article 9(1)(a) [of the regulation]”.

The judge therefore specifically ruled on this issue.

The judge made clear that he considered that M&S used the sign 'Interflora' as a result of the broad matching.  In this regard, he stated:

“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 trademarks. 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 [ECJ] said in Interflora at [47].”

Infringement thus arose due to a lack of negative matching 'Interflora', and such activity was to be covered by any injunction.

Although the terms proposed by both parties included a prohibition on M&S performing specific acts (use of particular keywords), Mr Justice Arnold did not see why the conventional form of injunction - “the defendant must not infringe trademark No x” - should not apply. Unsurprisingly, Interflora did not object to this, but M&S did.

M&S argued firstly that the IP Rights Enforcement Directive (2004/48/EC) required the court to impose remedies that were proportionate, but that a general injunction was disproportionate. M&S argued that they were disproportionate as they had a “chilling effect”, namely that the subject of the injunction had to be very cautious when deciding how to comply with the judgment due to the risk of contempt of court. While Mr Justice Arnold agreed with the requirement of proportionality, he found that it did not follow that the court’s normal practice was disproportionate. While he considered that there may have previously been “considerable force” in the point concerning contempt, the situation had however been changed through the availability of a procedural solution in terms of declaratory relief, as illustrated in Hotel Cipriani Srl v Fred 250 Ltd ([2013] EWHC 70 (Ch)).

In determining to grant an injunction in conventional form, the judge was also influenced by the long list of signs and variety of matching algorithms in use, and the risk of doing injustice to both of the parties by attempting to set out specific rules.

M&S further argued that the judge had explicitly assessed Interflora's claim by reference to reasonably well-informed and reasonably observant internet users in the United Kingdom and had made no finding with regard to internet users in other member states. M&S submitted that, in those circumstances, the injunction should be confined to the United Kingdom. 

Interflora argued that this provided no basis for the restriction, as M&S had not adduced evidence to show that internet users in other member states would react differently to those in the United Kingdom.

The judge found Interflora’s arguments more compelling and, in essence, found that the burden of proof was on a defendant to prove that the use of the relevant sign did not affect, and is not liable to affect the functions of the Community trademark (CTM) in member states for which evidence was not presented by the rights holder.  A Community-wide injunction was therefore imposed in the case of Interflora’s CTM.

As can be seen from the above, there are a number of points of interest in this short judgment. However, a careful eye should now be kept on the Court of Appeal, as Mr Justice Arnold left the door open to an appeal on the imposition of an injunction in general terms in relation to M&S’s initial argument regarding proportionality and the terms of Directive 2004/48:

“In any event, I do not think it would be appropriate for a first instance judge to depart from the established practice of this court. That is properly a matter for the appellate courts to consider.”

Robert Lundie-Smith, EIP, London