An ongoing legal battle over trademarks being bought as AdWords highlights the need for retailers to tread carefully when it comes to possible infringements

Why are we talking about it now?

A case to decide whether Marks & Spencer infringed Interflora’s trademark has been referred to the European Court of Human Justice and is awaiting a final ruling.

What are AdWords?

The paid-for search terms or ‘keywords’ that online advertisers can bid on in order for their ads to appear as sponsored links in Google’s search results when a consumer uses Google to search on that term.

How did this case come about?

Google previously changed its policy on who it would sell AdWords to. M&S then bid on the term Interflora - meaning that an ad for M&S Flowers was displayed as a paid-for result when a Google user searched for Interflora. Interflora then initiated litigation proceedings against M&S. The High Court of Justice of England and Wales then referred the case to the European Court of Justice.

What has the Advocate General said?

The Advocate General of the European Court of Justice Niilo Jääskinen has recommended that M&S be found liable for trademark infringement by using ‘Interflora’ as a Google AdWord. While his judgement is non-binding, it is thought that the official European Court of Justice ruling in a few months’ time could be in line with this judgment.

Is Google being taken to court too?

The European Court of Justice already ruled in March 2010 that Google’s practice of selling companies’ trademarks as AdWords is legitimate. However, this decision left the AdWords purchaser’s liability open to question.

While it is not a trademark infringement to purchase an AdWord that is a rival’s brand name, this case will settle whether it is a trademark infringement if consumers are led to believe that the goods available through the AdWords link are the trademark owner’s.

What does this mean for retailers?

Until the final decision by the European Court of Justice, anyone buying paid-for search terms, such as AdWords, that are trademarks of other companies are advised to take care in how they use them.

Kirsten Gilbert, partner at Marks & Clerk Solicitors, warns that the “Advocate General considers that use of a rival trademark as a Google AdWord constitutes trademark infringement where the consumer is unable to determine whether or not the advert is for the brand they originally searched for”.