In its judgement, the Court of Justice of the European Union, addresses the extent of possible violations of the trademark “function” and answers the reference for preliminary ruling raised by British courts in relation to a claim put forward by the company Interflora against Marks & Spencer for the use of one of its trade mark as a keyword on Google referencing service.

According to the conclusions set forth by the Court of Justice in its judgement of the Case Interflora and Others C-323/09, it will be to national courts to determine whether the use of certain keywords corresponding to the trade mark of one of its competitors to reference its products in search engines, can or cannot undermine any of the “functions” of that trade mark and whether it may constitute “free-riding”. In so doing, the Court also reminds that the owner of a trade mark is entitled to prevent the use by a third party of a sign identical to the trade mark in relation to goods or services identical to those for which it is registered, only if it is liable to have an adverse effect on one of the “functions” of the mark.

Therefore, it this case the Tribunal examines for the first time the scope of the protection of a trade mark’s investment function which, together with the function of indicating origin and the advertising function, are the main functions of a trade mark. In that sense, the Court considered that the use by a competitor of a sign identical to the trade mark in relation to identical goods or services, when that use substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty , undermines the trade mark’s investment function.

However, the Tribunal also points out that it cannot be accepted that the proprietor of a trade mark may prevent such use by a competitor if the only consequence of that use is to oblige the proprietor of the trade mark to adapt its efforts to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty. Similarly, the trade mark proprietor cannot rely on the fact that such use may prompt some consumers to switch from goods or services bearing that trade mark.

Enhanced protection for trade marks with a reputation

Regarding the extent of the concepts known as “dilution” and “free-riding”, the Court states, that in those cases in which Internet advertisers select keywords in order to offer for sale goods which are imitations of the goods of the proprietor of the marks with reputation corresponding to those words without “due cause”, these behaviours may be construed as free-riding. By contrast, where the advertisement displayed on the internet on the basis of a keyword corresponding to a trade mark with a reputation puts forward an alternative to the goods or services of the proprietor of the trade mark with a reputation , such use falls, as a rule, within the ambit of fair competition in the sector for the goods or services concerned.