Illegal Free-riding on the Interflora Brand

by Ann Bampton on September 2, 2009

In December 2008 we jointly filed a lawsuit with Interflora Incorporated based in Illinois against Marks and Spencer and Flowers Direct Online for breach of trade mark law.

Prior to May 2008, Google’s policy throughout the whole of Europe was to allow trade mark owners to object to the use of their marks in this way by competitors. This changed in the UK and Ireland in May 2008 but it is still the position in mainland Europe. Just because Google’s AdWords policy allows this kind of advertising, it doesn’t make it legal.

Marks and Spencer and Flowers Direct started bidding on the wordmark ‘Interflora’ which is a registered trade mark. Our case argues that sections 10 (1) and 10 (3) of the Trade Marks Act 1994 are being breached by Marks and Spencer and Flowers Direct.

Section 10 (1) is breached by making use of a sign which is identical to another’s trade mark, in the course of trade, in relation to goods or services identical to those for which the trade mark is registered.

Section 10 (3) is breached by making use of a sign which is identical or similar to another’s trade mark, and where the use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.

Below is an example of Marks and Spencer bidding on the wordmark ‘Interflora’ which is a registered trade mark.

Interflora AdWords adverts

Commenting on the legal action our Marketing Director, Michael Barringer says,

We consider this is a clear case of trade mark infringement; it’s the internet equivalent of asking for a Coca Cola and being given a Pepsi.

By advertising on ‘Interflora’ Marks & Spencer and Flowers Direct are free-riding upon the fame of our brand. Our brand is our most valuable asset and we will not tolerate competitors taking advantage of it and infringing our rights. We are very proud of the rich history we have built on our brand and protecting our brand is key.

The legal action we have started represents the beginning of a broader strategy to defend the Interflora mark against infringers.

In March 2009 our case against Flowers Direct was settled with Flowers Direct agreeing to cease bidding on ‘INTERFLORA’ for the time being.

The High Court in London has decided that the law is not settled on whether brand bidding on a competitor’s brand is lawful and has referred certain questions to the European Court of Justice for determination. This clearly goes against Marks and Spencer’s position that the practice is “not unlawful”. The High Court has denied Marks & Spencer permission to appeal to the Court of Appeal in respect of the nature of the questions referred to the European Court of Justice.

In his judgement, Mr Justice Arnold commented that Google’s decision to operate a different policy in the UK and Ireland to that in the rest of Europe is “fairly remarkable given that the relevant law is, or should be, essentially the same throughout Europe.”

We are currently waiting for the European Court of Justice to deliver their ruling, watch this space…


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Ann Bampton

Post category: Industry News, Interflora News, News  

{ 25 comments… read them below or add one }

Marc Smith 02 Sep 2009 at 5:30 pm

Quite right too. In my experience people like me that have computers with web installed on them can’t always distinguish between real ads and fake ads. This causes real problems. I once tried to buy a mouse for my pet tarantula, Fred, and I got a plastic one instead. It didn’t even look like a mouse, the eyes were buttons and it had a wheel for a nose. Don’t even get me started on the tail. Needless to say Fred was not impressed. Keep up the good work.

sammysunset 02 Sep 2009 at 11:44 pm

How do you know that they are bidding for the term, “Interflora”? What if Google, instead, anticipated the user’s request and offered them more than one option?

It sounds to me like there is a lot of unfair assumption, here. Do you, or your company, fully understand the algorithm that Google uses? Does anyone at your establishment know how a Search Engine works well enough to make this type of judgment?

I think not. You could look at the positive side of this and realize that your listing is #1 (meaning it’s far more likely to be clicked on), but instead you’re focusing on all the theoretical dollars you’re missing out on. Wipe your chin, fellas, and let free market reign.

If there’s no competition, then what’s the fun in running a business?

sammysunset 03 Sep 2009 at 11:32 am

Yes I agree, anyone should be able to steal someone else’s identity as they see fit. It’s a free market.

best regards

Sammysunset

Christian Hirlemann 03 Sep 2009 at 3:04 pm

Sammy,

It is clear that Marks & Spensers are bidding on Interfloras term, the biggest indication is that they have admitted it! (by saying they cannot see anything illegal with what they are doing).

It would be too much of a leap of faith on Googles part to ‘assume’ that people will want to see M&S flowers when they enter the term interflora, also if they did that then why not Next flowers or other large Brands that sell flowers?

Also, your point about it being a free market and that people should do what they want. Well, imagine if it really was a free for all and we really could bid on branded terms, lets just say you wanted to buy a guitar from Tanglewood, you enter ‘Tanglewood Guitars’ in the search engine and every guitar type turned up on the Search engine results page (SERP), how would you find what you specifically wanted…A Tanglewood. If you wanted a list of the best guitars as per google just enter ‘guitars’ or ‘guitars uk.

One of the biggest problems with the internet is that it is virtual, there is no physical location. If I walk into PC world I can be fairly sure that I am walking into a reputable store and that I can come back if I have a problem, the internet is not the same. I cannot go to the ombardman or the police and say “Big Brand at 17 to 21 Small Street, sold me a dodgy wigdet and refuse to refund me”.

Further to this imagine another company made a website that looked like the Tanglewood website and bid on their terms, if the site was fraudulent they could make huge sums of money just by pretending they were a trusted brand and then disappear leaving the real site to deal with the fallout.

I personally believe that it would be unethical the allow anyone to bid on branded terms, companies work very hard to build Brand awareness and public confidence in this brand. If the brand name is not something used in normal day to day searches then I see no reason why people should be allowed to bid on it, ie if I have chocolates that I call “Fine Chocolates” then I would understand that others would bid on that term, whereas if my Brand was called ‘Lindt’ then I would not see any reason for anyone to bid on that term.

I hope that this makes sense, if anyone disagrees please post another comment.

sammysunset 03 Sep 2009 at 3:22 pm

Hey, there, Sammysunset! Why, you certainly are a handsome chap!

In all seriousness, though, you are clever — but completely off-base.

This isn’t about stealing someone’s identity. This is about providing your services to compete with someone else’s services. If you scroll up to the screenshot above, you’ll notice that they aren’t labeling themselves as Interflora. They aren’t even claiming to be *better* than Interflora (which they *could* do). They are simply being listed alongside Interflora in order to provide options for the potential visitor.

Have you ever been downtown, where all the fast food restaurants are? Have you noticed that Burger King is right across the street from McDonald’s, and that their logos sort of look similar (i.e. simple shapes, large print of the company name, high up in the air and with similar color scheme)?

Does this mean that Burger King is trying to be McDonald’s? No. They are providing competition.

I’d like to iterate that Interflora is the first result for the search phrase, “Interflora”. What else would Interflora prefer? To have *nothing* else on the page, other than Interflora? Does Interflora not like the fact that there are *two* sponsored search result slots available, both of which must be filled with relevant sponsored results?

I can tell the difference between my alias and the one you provided, Sammysunset. I never capitalize the ‘s’ in my name. Now, if Interflora (as well as yourself) could exercise an equal degree of discernment, then maybe you both could avoid such silliness.

sammysunset 03 Sep 2009 at 3:30 pm

Well met, Christian Hirlemann!

I agree. If this M&S Flowers were masquerading as Interflora, then I would not be arguing with you. You’d be — clearly — absolutely right.

I also agree with you on the necessity of defending one’s own brand. However, in this case (again) M&S is not attempting to be mistaken for Interflora; they are simply wishing to be pitted against them in search results.

In the system Google has setup, everyone has an equal opportunity for success, and a user has an equal opportunity to choose what they are looking for. If one were searching for Interflora because they wanted cheap, good looking flowers in the UK, then they could very easily find it. The results are above, in the screenshot.

However, if they chose to move their gaze down about 24 pixels, then M&S would have the opportunity to win their business. Now, if they *want* Interflora then they can have it very easily… but if they’re open to being wooed by M&S, then they may choose that instead. This is the service that Google provides, and is why I mentioned free market.

M&S has not labeled themselves as Interflora. They have not (as you appropriately opined with your suggestion) created a fraudulent website where they pose as Interflora. It appears as though they simply wish to offer people looking for Interflora with a [what they believe to be] better alternative.

sammysunset 03 Sep 2009 at 3:35 pm

Christian Hirlemann: Also, I admit that I hadn’t caught that they admitted that they were bidding on the term Interflora. The argument, however, is whether or not this is wrong of them to do so.

Cheers!
- sammysunset

Adrian 03 Sep 2009 at 3:59 pm

Christian,

Some brand names become so big that people commonly refer to them meaning the item rather than the brand.

Is South Africa, it was common to talk of “carlton roll” meaning “kitchen towel” and “hoover” meaning vacuum cleaner (almost to the point of hoover becoming a verb).

So it’s not unreasonable to assume that people searching for interflora mean “international flower deliver” or “stratocaster” meaning “awesomely great guitar”

You are quite correct, if a site made a look alike site and tried to dupe customers into thinking it was Tanglewood, when it actually was Tinglewid, a lousy guitar manufacturer, that would be illegal.

However M&S in neither their advert of their site is pretending to be anything other than a different site offering the same of similar products. It can be reasonable expected that no customer seeing either the adverts or the sites would think they were buying from Interflora when on the M&S site. What M&S is essentially doing is buying a billboard near an Interflora bricks and motor store saying “Try M&S flowers, we’re down the road and have great prices”

In fact if the M&S advert read “We’re not Inteflora, our flowers are way better” as I understand your post you would still object as they are still bidding on your keyword.

Which as far as I can tell is the real issue. Not brand as much as Interflora doesn’t like the competition, or the increased costs.

I wonder should Interflora win this case (which honestly I don’t see how they can), they could get referred to the Competition Authority for anti-competive practises. Both for taking competition out of the keyword bidding on the word, as well as making the market place less competitive as to not allowing their competitors to advertise in a free market.

The only damage to the band I can see is this ridiculous case.

Adrian 03 Sep 2009 at 4:04 pm

In fact following on from my last comment, you are saying that this should be illegal

http://images.intomobile.com/wp-content/uploads/2008/11/microsoft-apple-bullring.jpg

Because a reasonable person might walk into the Microsoft booth and walk away with a crummy netbook thinking he just bought an Apple Macbook Air ?

Which I think most people would agree is ridiculous.

Christian Hirlemann 03 Sep 2009 at 5:58 pm

Hey Sammy/ Adrian- Thought I would answer you both in one post.
By the way in my last post it was supposed to be addressed to Sammysunset I was not pretending to be him (if that is what you thought).

OK so I deviated from the actual case under discussion. More to iterate the possible implications that this case could have and one of the reasons I am against (competitors) bidding on Branded terms.

What would worry me, as a small business owner is that
(1) We (that’s all advertisers) would loose one of the only areas of PPC that is still low cost,
(2) Searchers would loose the simplest search possible (enter brand, choose from very short list of 1 maybe 2! and
(3) if I was to work hard building a brand, then before I had been able o make my position stable a new competitor could enter the (online market), use my branded term to pressure me. If they incorporate the critical success factors from my campaign they may steal traffic/ customers I have grown through hard work and providing a high quality service/ content. Not really fair if you consider that for many branded terms almost nobody would search for it before (and as I suggested in my last post I do not include Brands with Generic names such as ‘Fine Chocolates’ or ‘Quality Hotels’, it is obvious that for terms like this it would be unreasonable (for advertiser or consumers) to limit competition here.

Adrian, I was trying to make reference to the fact that on the internet there are only a few things telling you where you are is the URL, Page title etc (at least for those of us that are not computor wizzes), I was also specifically debating the risk of fraudulent sites pretending to be someone else (so bidding on Apples term, looking like the Apple Store, accepting payment online and then disappearing without providing a product or service). To use your example, if I had the mac book air in my hand there would be no problem, I could take a look at it there and then. On the internet however I wait for it to be delivered (having already paid) and the only points of reference I will have are the site the search engine that gave me the results, the URL and the details that my bank will have from the transaction (fraudsters usually based in other country, close bank accounts and disappear too!). Yes, very obvious that if you physically have something in your hand you can see the difference, my point is that on the internet I choose my product by the picture displayed and not by choosing the product I will take home that day! Very different.

Now a comment specific to the Interflora vs Marks & Spencers
Yes in this specific case M&S, a reputable company and is making it clear who they are and is merely occupying real estate near to interflora. I can understand the business reason behind this, and in fact I do not see a major problem in this specific case (other than M&S leaching off of interfloras Brand awareness and good reputation).

I can understand why it would seem beneficial to have extra competition on the SERP, however my view is that the searcher entered Interflora, a term they only became aware of because of that company and one that unless the company existed would not be a searched for, they are also specifically interested in this company. So in a way I see the Branded term to be Intelectual Property, something created by the company to make itself easily found in a bustling and busy high street.

Just to use the Burger King and Mc Donalds example, I have always thought that burger King put their restaurants next to Mc Donalds because it was easier, they already have targeted passing trade and mac donald already did the hard work in finding what should be the best location for a fast food restaurant of there kind. The difference is that people may not ONLY be there because of McDonalds, they probably pass by anyway (that is why McDonalds is there in the first place), whereas in the virtual real estate of the SERP people move via ‘teleportation’, therefore do not pass by anything. This I think makes the the virtual real estate on SERPs different from the physical world, particularly for branded terms.

The more I think about this the more I understand the idea that more competition on the SERP can be good, I still hold my ground though.

Perhaps you can change my mind. You came close with the suggestion that there is more choice for the consumer and if they want they can choose interflora. However, if it becomes clear that it is legal to bid on others branded terms wait to see the floods of leachers heading for the high traffic brands.

Regards

Gareth James 04 Sep 2009 at 9:14 am

I actually dicagree. Its about consumers having choice – here Google is giving users to their search engine more choice, which is a good thing. If they were actually using ‘interflora’ in the title, that would be different.

Nick Wilsdon 04 Sep 2009 at 10:17 am

@sammysunset

There is no doubt that M&S were bidding on the term ‘Interflora’. Even with expanded broad match, you would not get this result. Maybe if the user had put in ‘Interflora Flowers’ (and M&S had BM on ‘flowers’) but not on the singular search term.

Adrian 04 Sep 2009 at 10:27 am

Hi Christian

A few comments
- You are correct businesses would lose on cheap adverts on their own brands. That’s life, there are no easy breaks.
- You can also flip the small business argument. This allows small business’s to break into the market. What if I’m a small business doing niche hand made guitars. I can come in and bid on some bigger players names and highlight consumer choice. Choice is _always_ good.
- Businesses should compete on quality, value, service. If I have a better product to offer I should be able to let people know. I get the feeling that the only companies crying about brand leeching are those with products who aren’t as good. If you feel your product is better you have nothing to worry about.

If you can be number 2 in serps, you can be number 2 in the adwords. If you think users shouldn’t be allowed to be in the adwords you should ban them being number two in serps. This is clearly stupid. Unless you’re suggesting users are so stupid they can’t tell the difference.

I think the argument about fake sites and fake urls is misleading. No one is suggesting tricking searchers should be allowed. What is being suggested is that competitive ad’s for competitive sites where both the advert and the site clearly show it’s not the same. This argument is a red herring, and I don’t believe what we are debating.

Christian Hirlemann 04 Sep 2009 at 10:58 am

Here is an example of a scam pretending to be ABC news (a large news broadcaster in the US and partner with the BBC in the UK).

As the articles shows they did not even do a great job of it, it still worked and many fell into the trap.

http://www.blogation.net/2009/08/alert-google-cash-scam.html

Imagine if this site had been able to bid in the term ABC News (perhaps they did, i do not know).

Christian Hirlemann 04 Sep 2009 at 11:33 am

OK, so perhaps I am just a grumbling advertiser sad at the fact he will loose cheap advertising.

I do completely agree that choice is a good thing and competition is an important market force.

However I still think that bidding on Branded terms is wrong.

Adrian 04 Sep 2009 at 11:37 am

Ok but Christian, you seem to keep missing my point that we all agree pretending to be someone else’s site is clearly wrong, and illegal.

Could you highlight where any companies in the Interflora case have done this ? Else this is not relevant to the case in question.

TechChuff 04 Sep 2009 at 12:00 pm

This very much reminds us of the case of Eddie Murphy when he accidentally picked up a ‘lady of the night’ to only discover that she was a man ‘masquerading’ as a lady.

After that terrible error he then goes and has a baby with Mel B who is actually a man too. Once simple error. A lifetime of man love.

Christian Hirlemann 04 Sep 2009 at 3:49 pm

Hi Adrian,

I did say in one of my posts that I had deviated from the case in point and admitted that in the case M&S were in fact making it clear who they were and so in this case there is not a problem of fraud.

As this is a test case it will have ramifications that reach further than these two companies alone, it will set a president for paid online (brand) advertising in the UK, I would suggest that there are a lot of online marketers watching this case with anticipation.

So just to be clear, I had said that in this specific case the only problem I see is M&S leaching on Interfloras’ brand awareness (and this is only a problem online for the reason I mention about the form of travel around the internet).

I hear your argument about this being just another form of competition (and sammy made the point that if the consumer wants Interflora they can click on that ad). It is a compelling argument that I am sure will be taken into account in the court case.

I have made my current preference clear, I will of course be watching the case with interest and an open mind to the fairness of this tactic.

I will not be able to reply to any further comments due to time limitations, I thank you all for you input, it has been interesting. I will read future comments but unlikely to respond.

Regards to all.

sammysunset 04 Sep 2009 at 4:53 pm

I wonder how Interflora feels about such a discussion on their blog?

I wonder if they have anything to add to the discussion?

Noah 04 Sep 2009 at 7:47 pm

It is odd that Google’s policies can change so much across different parts of Europe. Were you guys merely trying to get them to stop bidding on the trademark, or were you also filing for some sort of damages? If so, did you win in regards to damages? Very interesting case.

Michelle Bryant 02 Dec 2009 at 11:12 pm

I think some people on this thread are missing the point. Imagine you called up 118 118 (or 118 247 or 118 123 or …) and you said, “Hello, I’d like the number for Interflora please.” And they said “Certainly Madam, we have two listings for Interflora: Interflora and Marks & Spencer – which did you want?” That’d be ridiculous.

Google is a supplier of information. It must be forced to supply information that is correct and not misleading.

Interflora has made a grave mistake by not adding Google Inc to this court case. Google and Google Adwords are not ISPs (and therefore not a “mere conduit” under UK and EU law) but Google Adwords is an advertising medium and must therefore adhere to trademark law.

Interflora, if you lose this case, it’s because you’ve failed to sue the correct party – Google Inc. What was that about “First, do no evil”? Showing competitor listings in Adwords triggered by trademarks protected under law is evil. Note that SERPS and Adwords are two very different things – one is a result of a clever algorithm and one is simply a cash of who has the most cash.

Lincoln 28 Jan 2010 at 7:33 pm

Michelle i think you’ve missed the point. How about when you look in the yellow pages for interflora and find M&S have parked their advert right by it? Many positions in the yellow pages are sold on this basis which is exactly the same as google producing ads for anyone offering a relevant service who wants to be seen there.

The fact is that on both the natural listings and the sponsored listings the correct company which you requested has been displayed in the top position and as such google has performed well. The added information provides additional consumer choice if you really like buying your flowers from interflora then go on – click through and do so, if you want more choice and maybe a different price or delivery schedule the choice is available.

Don’t confuse patent and copyright law with trademark. Trademark law is there to stop someone claiming to be or claiming to have an affiliation with someone when they are / have not. M&S do not suggest they are anyone else and their advert is clear about who they are and so is their web site.

Christian Hirlemann 09 Jul 2010 at 4:16 pm

Are there any updates regarding this case? I would love to know what is happening just not sure where to look.

Christian Hirlemann 09 Jul 2010 at 4:26 pm

Some raw information on the case can be found using this link
http://www.bailii.org/ew/cases/EWHC/Ch/2009/1095.html

Jens Steffen 03 Dec 2010 at 1:06 pm

Hey all,

In relation to an earlier comment when a product becomes the industries brand, such as Hoover being for a vacuum cleaner, then I am pretty positive that the wordmark becomes defunct and you do not have a position to argue.

However in the case of interflora it is a known brand name not an industry term. I dont say I am going to buy interflora, I say I am going to buy flowers. Then you ask where from, answer the florist, or online florist. I don’t buy flowers often and so when I type interflora I expect interflora. If I wanted choice I would enter florist or flowers.

In discussions about looking through the yellow pages, there is not a category interflora, it is a category florist so then you have open choice.

I find it ridiculous to claim this is offering more choice by allowing others to tag onto to a brand, as already previously mentioned people chose interflora to look up.

However as a compromise to the idea of a free market, how about when a brandname (which is a registered trademark/wordmark) that this sits top of the search engine (not a paid advert like currently for interflora) and that the other adverts sit in the side bar rather than above the actual website. With this format there can be no confusion about clicking on the wrong website. Also the advert is not in the direct line of vision so people who want a choice can still see it but it requires slight extra effort. For example as previously mentioned with McDonalds and burger king, I don’t walk through the burger king in order to get to the McDonalds but it is fine if it is sitting next to it.

Looking forward to comments

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