Interflora, Inc. and Another v Marks and Spencer Plc and Another
| Jurisdiction | England & Wales |
| Judge | The Hon Mr Justice Arnold,Mr Justice Arnold |
| Judgment Date | 12 June 2013 |
| Neutral Citation | [2013] EWHC 1291 (Ch),[2013] EWHC 1484 (Ch) |
| Docket Number | Case No: HC08C03340 |
| Court | Chancery Division |
| Date | 12 June 2013 |
[2013] EWHC 1291 (Ch)
The Hon Mr Justice Arnold
Case No: HC08C03340
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Rolls Building
Fetter Lane, London, EC4A 1NL
Michael Silverleaf QC and Simon Malynicz (instructed by Pinsent Masons LLP) for the Claimants
Geoffrey Hobbs QC and Emma Himsworth QC (instructed by Osborne Clarke) for the First Defendant
Hearing dates: 15 18 and 22 April 2013
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Contents
| Topic | Paragraphs |
| Introduction | 1–2 |
| The Trade Marks | 3–4 |
| The witnesses | 5–17 |
| Interflora's witnesses | 5–10 |
| M & S's witnesses | 11–17 |
| Factual background | 18–165 |
| The UK flower market | 18–20 |
| Interflora | 21–65 |
| Inc | 21–22 |
| FTD | 23 |
| Fleurop | 24 |
| Trade mark licences | 25 |
| IBU | 26–30 |
| The Interflora network in the UK | 31–39 |
| Interflora orders in the UK | 40–47 |
| The international Interflora network | 48–49 IBU's marketing 50 |
| IBU's keyword advertising | 51–53 |
| Interflora brand recognition | 54 |
| Interflora customer demographics | 55 |
| IBU's commercial partnerships | 56–62 |
| Interflora's trade mark enforcement efforts | 63–64 |
| Flowers Direct | 65–68 |
| Flying Flowers | 69 |
| M & S | 70–86 |
| M & S's marketing | 75 |
| M & S brand recognition | 76 |
| M & S customer demographics | 77 |
| Loyalty and Customer Insight | 76–77 |
| M & S's online service | 78 |
| M & S's sales of flowers in store | 79 |
| M & S's flower delivery service | 80–86 |
| Google AdWords | 87–111 |
| Common features | 90–99 |
| The May 2008 policy change | 100–104 |
| Changes since May 2008 | 105–111 |
| Bing and Yahoo! | 112 |
| Hitwise | 113 |
| Searches for "interflora" | 114–115 |
| M & S's use of keyword advertising prior to 5 May 2008 | 116–117 |
| M & S's reaction to Google's policy change | 118–132 |
| The growth in M & S's keyword advertising | 133 |
| The advertisements which are the subject of the claim | 134–137 |
| Effect of Google's policy change on IBU's keyword advertising costs | 138–141 |
| Internet literacy generally | 142–147 |
| Consumer understanding of keyword advertising | 148–160 |
| Incidence of competitive brand keyword bidding | 161–165 |
| The law | 166–287 |
| Legal context | 166–171 |
| The relevance of TRIPS | 172–174 |
| Date of assessment | 175–176 |
| Article 5(1)(a) of the Directive/Article 9(1)(a) of the Regulation | 177–180 |
| Article 5(1)(b) of the Directive/Article 9(1)(b) of the Regulation | 181–185 |
| Article 5(2) of the Directive/Article 9(1)(c) of the Regulation | 186–193 |
| The "average consumer" | 194–224 |
| The effect of keyword advertising on the origin function | 226–267 |
| Google France | 226–241 |
| BergSpechte | 242–247 |
| BANANABAY | 248 |
| Portakabin | 249–256 |
| 257–260 | |
| Interflora (CJEU) | 261–266 |
| Summary | 267 |
| The effect of keyword advertising on the advertising function | 268–269 |
| The effect of keyword advertising on the investment function | 270–274 |
| Keyword advertising and detriment to the distinctive character of the mark | 275–277 |
| Keyword advertising, unfair advantage and due cause | 278–281 |
| Case law of other Member States concerning keyword advertising | 282–287 |
| Assessment | 288–323 |
| General points | 288–293 |
| Article 5(1)(a)/Article 9(1)(a): effect on the origin function? | 294–319 |
| Factors mentioned by the CJEU | 294–298 |
| Matters relied upon by Interflora | 299–310 |
| Matters relied upon by M & S | 311–317 |
| Conclusion | 318–319 |
| Article 5(1)(a)/Article 9(1)(a): effect on the investment function? | 320 |
| Article 5(2)/Article 9(1)(c): dilution | 321 |
| Article 5(2)/Article 9(1)(c): unfair advantage and due course | 322–323 |
| Comparative advertising? | 324–325 |
| Conclusion | 326 |
Introduction
The Claimants (collectively "Interflora") operate the best known flower delivery network in the United Kingdom. They own registered trade marks consisting of the word INTERFLORA. The First Defendant ("M & S") is a very well known retailer. Both parties operate internet websites which take orders for the delivery of flowers. Google operates the best known internet search engine in the UK. M & S pays Google to display advertisements for its flower delivery service on the search engine results page (or SERP) when an internet user uses Google's search engine to search for "interflora" and similar terms (a form of advertising variously referred to as "keyword advertising", "paid search advertising", "pay per click (or PPC) advertising" and "search engine advertising"). Interflora contend that M & S thereby infringes Interflora's trade marks. M & S deny any infringement.
This dispute raised complex issues of European trade mark law as well as issues of fact. Accordingly, at a relatively early stage of the proceedings, I referred 10 questions of interpretation of the relevant legislation to the Court of Justice of the European Union by an order dated 22 May 2009 for the reasons given in my judgment of that date: [2009] EWHC 1095 (Ch), [2009] ETMR 54 ("my first judgment"). Subsequently, I withdrew 6 questions by an order dated 29 April 2010 and modified one of the other questions for the reasons given in my judgment of that date: [2009] EWHC 925 (Ch). The CJEU answered the remaining questions in its ruling in Case C-323/09 given on 22 September 2011 [2011] ECR I-0000, [2012] ETMR 1 ("Interflora (CJEU)"). Since then I have heard a series of case management applications, two of which resulted in appeals to the Court of Appeal: [2012] EWCA Civ 1501, [2013] ETMR 11 ("Interflora (CA I)") and [2013] EWCA Civ 319 ("Interflora (CA II)"). The case was finally tried before me in April 2013. I must now find the relevant facts and apply the law as stated by the CJEU to those facts. Because the length of time for which this litigation has been pending, I must make findings with regard to the period from May 2008 to the present.
The Trade Marks
The First Claimant Interflora, Inc. ("Inc") is the registered proprietor of the following registered trade marks ("the Trade Marks"):
i) United Kingdom Trade Mark No. 1329840 INTERFLORA registered with effect from 16 December 1987 in respect of various goods and services in classes 16, 31, 35, 38, 39, 41 and 42. These include "natural plants and flowers" in class 31, "advertising services … provided for florists" and "information services relating to the sale of … flowers" in class 35, "transportation of flowers" in class 39.
ii) Community Trade Mark No. 909838 INTERFLORA registered with effect from 19 August 1998 in respect of various goods and services in classes 16, 31, 35, 38, 39, 41 and 42. These include "natural plants and flowers" in class 31, "advertising services … provided for florists" in class 35, "transportation of flowers" in class 39 and "information services relating to the sale of … flowers" in class 42.
There is no dispute as to the validity of either of the Trade Marks. Nor does M & S dispute that the Trade Marks have acquired a substantial reputation in the United Kingdom and elsewhere in the European Union in relation to flower delivery and the operation of a flower delivery network.
The witnesses
Interflora's witnesses
Michael Barringer has been the Marketing Director of the Second Claimant Interflora British Unit ("IBU") since 2003. He is in charge of all Interflora advertising and marketing in the UK. He gave evidence about IBU's flower delivery business and its reputation and about IBU's keyword advertising.
Ann Bampton is the Marketing Projects Manager at IBU. She has been with IBU in various roles for over 35 years. She gave evidence concerning the history of the Interflora brand and the nature of the Interflora network.
Nicholas Priest is the Director of Interflora Services at IBU, which is responsible for all members. He joined IBU in January 2009. He gave evidence concerning the members of the network and IBU's relationship with them.
Rhys Hughes is President of IBU. He has been Chief Operating Officer since August 2006 and President since May 200He is Managing Director of the UK and Irish operations, among other territories. He gave unchallenged evidence about the transformation of IBU from a trade association into a commercial organisation and about his communications with Sir Stuart Rose and Marc Bolland (former Chairman and current CEO of M & S respectively) concerning this dispute.
Adam Rose is Head of Paid Search, UK, at Croud Inc Ltd, an online digital marketing company which manages IBU's keyword advertising. He gave evidence about Interflora's keyword advertising and the impact of M & S's keyword advertising on Interflora.
Anang Pandya is a Senior Custom Analyst at Experian Hitwise (as to which, see below). He gave evidence about an analysis of Hitwise's data he carried out on behalf of Interflora for the purposes of these proceedings.
M & S's witnesses
Steven Bond is Director of Customer Insight and Loyalty at M & S. He gave evidence concerning the history of the M & S business and its reputation, and specifically the M & S flower business and its reputation.
Jack Lemon is an Online Marketing Manager responsible for all UK search engine advertising activity on behalf of M & S. He gave evidence about search engine advertising and about M & S's Google AdWord accounts relating to "interflora" and other variant terms, as well as other flower-related accounts.
Anna Del Gesso is Head of Customer Service Centres for M & S. She gave evidence based on searches...
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