Sponsored links on the internet - no Acte Clair as UK court refers questions to the ECJ

The issue as to whether or not sponsored links on the internet can constitute trade mark infringement in the UK is far from clear as demonstrated by two recent UK cases.

Earlier this year, we reported that Interflora had filed a trade mark infringement claim against Marks & Spencer as a result of Marks & Spencer’s sponsorship of “Interflora” as a Google Adword search term.

In May 2009, the High Court published its judgment. Mr Justice Arnold declined to grant Interflora an interim injunction against Marks & Spencer to stop them using “Interflora” and other close variants as Google Adword search terms. Mr Justice Arnold instead chose to follow the approach adopted by other national courts in the EU by referring a number of questions to the European Court of Justice (“ECJ”). Mr Justice Arnold’s view was that as “both European trade mark law and European law with regard to the liability of internet service providers are substantially harmonised, this is a question which, subject to one qualification, there ought to be a common European set of answers”. The qualification is that as previously reported by us in August last year, Google has a different adword policy in the UK and Ireland to elsewhere in the EU, so any common set of European answers may need to be qualified for the UK and Ireland. An additional factor that Mr Justice Arnold took into consideration in deciding to refer questions to the ECJ, was that he had already decided to refer questions to the ECJ for a preliminary ruling in the case of L’Oreal SA v eBay.

In the case of L’Oreal SA v eBay, L’Oreal brought an action against eBay for trade mark infringement arising as a result of counterfeit products and imports for sale on the eBay website. In Justice Arnold’s judgment, handed down the same day as his judgment in the Interflora v Marks & Spencer case, Mr Justice Arnold concluded that whilst the fourth to tenth defendants (the sellers of the products in question) had infringed L’Oreal’s trade marks, eBay was not jointly liable for the infringements committed by these defendants.

On the question as to whether eBay had infringed L’Oreal’s trade marks through the use of sponsored links, whilst Mr Justice Arnold commented that the display of sponsored links to users does not, in his opinion, constitute “use” of the marks by eBay, he felt that due to the uncertainty in Europe surrounding this issue, the matter was far from being an “acte clair” and he therefore decided to refer a number of questions to the ECJ.

The precise questions to be referred to the ECJ in both cases are yet to be agreed between the parties. Once agreed, we will eagerly await the guidance of the ECJ which will hopefully give some much needed clarity as to whether or not the use of sponsored links can constitute trade mark infringement.

If you have any questions relating to this article or any other trade mark or brand related issue, please contact any member of our Brand Guardianship team at brandguardianship@boyesturner.com or on +44 (0)118 952 7247.

Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the
accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.

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