Marks and Spencer Plc v Interflora Inc. (A Company Incorporated Under the laws of the State of Michigan, USA) and Another
|England & Wales
|Lord Justice Lewison,Lord Justice Etherton,Lord Justice Hughes
|20 November 2012
| EWCA Civ 1501
|Case No: A3/2012/1757
|Court of Appeal (Civil Division)
|20 November 2012
 EWCA civ 1501
Lord Justice Hughes
Lord Justice Etherton
Lord Justice Lewison
Case No: A3/2012/1757
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
INTELLECTUAL PROPERTY COMMUNITY TRADE MARK COURT
Mr Justice Arnold
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Geoffrey Hobbs QC & Miss Emma Himsworth QC (instructed by Osborne Clarke Solicitors, London) for the Appellant
Mr Michael Silverleaf QC & Mr Simon Malynicz (instructed by Pinsent Masons LLP, London) for the Respondents
Hearing date : 7 November 2012
This is a case about alleged trade mark infringement. The dispute is between Interflora and Marks & Spencer. Both are household names. The particular question raised on this appeal from Arnold J is whether the trade mark proprietor should be allowed to call the evidence of witnesses identified by means of a witness gathering exercise, where the proprietor does not intend to rely on the survey or questionnaire by means of which the witnesses were identified. There are three parts to the question:
i) Is there a rule of law which lays down a principle that such evidence is (a) always admissible or (b) always inadmissible?
ii) If it is admissible, should it nevertheless generally be excluded in the exercise of the court's powers under CPR Part 32.1 (2)?
iii) Should the particular means by which the witnesses were identified in this particular case lead the court to exclude the evidence of those witnesses?
First it is necessary to outline the background to the case and the issues. I take much of this verbatim from an earlier judgment of Arnold J at a previous stage in these proceedings:  EWHC 1095 (Ch).
Background and issues
Interflora is a well known brand. The Interflora corporation is the owner of the trademark INTERFLORA, which is both a United Kingdom Trade Mark and a Community Trade Mark. Interflora operates the largest flower delivery network in the world. The Interflora network is a network of florists, each of which trades under and by reference to its own trade mark, but which also trades under and by reference to the trade marks in issue in this case. Orders may be placed either in person or by telephone with one member of the network (typically a member close to where the person placing the order lives) for fulfilment by another member of the network (usually the member closest to the address to which the flowers are to be delivered). The order is then transmitted from the first member to the second member. It follows that members of the network both have their own individual reputations under their own trade marks and benefit from the reputation of the trade marks built up by Interflora and the members of the network. Interflora also operates an online flower delivery service which enables orders to be placed via the internet, again for fulfilment by the member closest to the address to which the flowers are to be delivered. This is operated via a website located at www.interflora.com which resolves to country-specific websites such as www.interflora.co.uk.
Marks & Spencer plc ("M & S") is also very well known as a national retailer. It operates a flower delivery service via its website which enables orders to be placed online. M & S is not a member of the Interflora network.
M & S advertises its flower delivery service on the internet. One means by which it does this is by the use of AdWords bought from Google. AdWords operates as follows. When the Google search engine carries out a search, it shows the user two types of links to third party webpages in the search results. The first type, referred to as "natural" or "organic" links, are links to websites assessed to be relevant to the search query by the search engine's algorithm sorted in order of relevance. Although there are various ways in which website operators can and do seek to influence their position in the "natural" search results, in principle the ranking is an objective one based solely on relevance. By contrast, the second type of link, referred to as "sponsored links", are a form of advertising which are displayed because the website operator has paid for them to appear. Sponsored links are generally displayed in a separate section of the search results page, at the top and/or at the side. A sponsored link is displayed when the user enters one or more particular words into the search engine. These words, which are referred to as keywords, are selected by the advertiser in return for the payment of a fee. This is often referred to as "purchasing" the keywords.
A sponsored link consists of three elements. The first is an underlined heading which functions as a hyperlink. That is to say, when the user clicks on the link, the user's browser is directed to the advertiser's website. The hyperlink may consist of or include the keyword or it may not. The second element consists of some promotional text, which may or may not include the keyword. The third element consists of the URL of the advertiser's website. The URL does not function as a hyperlink (although the user could type it or cut-and-paste it into his or her browser and access the website in that way).
At the relevant time an advertiser like M & S could purchase a keyword such as INTERFLORA which is a registered trade mark of a competitor such as Interflora. That is what M & S did. It also purchased a number of variants of INTERFLORA. This had the result that, when a user entered the word INTERFLORA (or its variants) into the search engine, in addition to displaying the natural or organic results, the computer would also display the sponsored links including an advertisement for M & S for goods and services covered by that trade mark. One such advertisement read:
"M&S Flowers Online
www.marksandspencer.com/flowers Gorgeous fresh flowers & plants. Order by 5pm for next day delivery"
It is advertising of this kind that is said to amount to infringement of Interflora's trade marks.
Interflora's pleaded case is now contained in its Amended Particulars of Claim. Some of the amendments were prompted by the result of a reference to and decision of the Court of Justice at an earlier stage in these proceedings, and to which I will refer later. The first of the allegations to which the contested evidence is said to be relevant is contained in paragraph 13.1.1 of the Amended Particulars of Claim which reads:
"… the manner in which the Defendant's advertising is presented does not enable reasonably well-informed and reasonably observant internet users or enables them only with difficulty to ascertain whether the goods or services referred to by the advertisement originate from the Claimants or an undertaking economically connected to the Claimants or on the contrary originate from a third party."
A related allegation is contained in paragraph 13.2.1 which reads:
"… the use complained of is detrimental to the distinctive character of the Trade Marks because there will be a blurring or dilution that will lessen the capability of the Trade Marks to distinguish the Claimants and their goods or services from those of others in that it does not enable reasonably well-informed and reasonably observant internet users or enables them only with difficulty to ascertain whether the goods or services referred to by the advertisement originate from the Claimants or an undertaking economically connected to the Claimants or on the contrary originate from a third party."
The legal framework
It is convenient to describe the legal framework by reference to article 9 of Regulation 40/94 (the Community Trade Mark Regulation), which is in similar terms to article 5 of the Trade Marks Directive and section 10 of the Trade Marks Act 1994. Article 9 provides:
"A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(a) any sign which is identical with the Community trade mark in relation to goods or services which are identical with those for which the Community trade mark is registered;
(b) any sign where, because of its identity with or similarity to the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark;
(c) any sign which is identical with or similar to the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.
2. The following, inter alia, may be prohibited under paragraph 1: …
(b) offering the goods, putting them on the market or stocking them for these purposes under that sign, or offering or supplying services thereunder; …
(d) using the sign on business papers and in advertising."
The Court of Justice has now considered the question of AdWords on a number of occasions, including a previous stage of this litigation. In cases... Joined
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