M&S May Be Stopped Over Trademark-Keyword Use, Court Aide Says

Marks & Spencer Group Plc (MKS) may be stopped from using trademarked terms as keywords on Web search engines to trigger advertisements that could confuse online users, an adviser to the European Union’s highest court said.

Trademark owners are “entitled to prohibit” use of protected terms as Internet keywords if the ads don’t allow people to ascertain where the services or products come from, Advocate General Niilo Jaeaeskinen of the EU Court of Justice said in a non-binding opinion today. The Luxembourg-based EU court follows such advice in a majority of cases.

Interflora, a network of more than 1,800 florists which has operated a flower-delivery network in the U.K. since the 1950s, is suing Marks & Spencer in the U.K. for violating its trademark rights by using keywords, such as Interflora, Intaflora and Interflora Delivery, to trigger ads on Google Inc. (GOOG)’s search engine.

“An error concerning the origin of goods or services arises when the competitor’s sponsored link is liable to lead some members of the public to believe that the competitor is a member of the trademark proprietor’s commercial network, when it is not,” said the court adviser. In such a case, the trademark owner “has the right to prohibit use of the keyword in advertising by the competitor in question.”

A spokeswoman for London-based Marks & Spencer said the company couldn’t comment until it consulted its lawyers.

The High Court in London in 2009 referred the case to the EU’s top tribunal for guidance on how to interpret the bloc’s trademark rules in such cases.

Google Ruling

The EU court last year set a precedent with its ruling in a dispute between Google, owner of the most-used search engine, and LVMH Moet Hennessy Louis Vuitton SA. (MC) It was the first time the EU’s top court ruled on the rights of companies to prevent search engines in the 27-nation region from distributing trademarked names as keywords.

The March 2010 ruling said brand owners can sue advertisers who buy protected keywords and display ads on the search engine’s website that make it difficult for users to see whether they sell original or fake products.

Interflora said in a statement that today’s opinion, if followed by the Court of Justice, would “enable brand holders across Europe to deliver quality service and ensure that trademarks guarantee the origin of the goods bought by consumers online.”

FTD Group Inc., the florist whose symbol is the winged god Mercury delivering flowers, bought Interflora in 2006 to enter the European market. FTD Group was acquired by Internet retailer United Online Inc. (UNTD) in 2008.

The court adviser said policies by search engines such as Google that don’t allow companies in some countries to block the selection by others of keywords that are identical to their trademark “is as such immaterial in so far as the liability of the advertiser using the keywords is concerned.”

To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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