(Corrects paragraph 3 to show Adwords can push websites higher
in Google ad lists, not search results)
Sept 22 * EU court: use of rival trademarks
is part of competition
* Lawyers: ruling a boost for Google's Adwords product
* Setback for brand owners
* Up to national courts to decide on merits of each case
(Adds Interflora, lawyer comments)
By Foo Yun Chee and Georgina Prodhan
BRUSSELS/LONDON, Sept 22 Marks & Spencer
may be allowed to use another company's trademark for online
advertising as long as it does not hurt its rival's reputation,
Europe's highest court ruled, in a boost for Google's
The European Court of Justice (ECJ) was ruling on
Thursday on a lawsuit brought by U.S. flower delivery group
Interflora against M&S, in which British judges sought advice
from the Luxembourg-based ECJ.
Google's Adwords allows organisations or individuals to
increase their prominence on the Web by buying keywords that
will push their websites higher up in Google ad lists when users
type those words in.
Many companies use this as a tool to piggyback on the
strength of rival brands, for example in the case of M&S, which
bought the keyword "Interflora" to lead consumers to its own
The court said M&S could use an online advertisement with a
keyword corresponding to another trademark to attract customers
to its goods or services, as long as it did not damage the
reputation of the rival brand.
"Such use falls, as a rule, within the ambit of fair
competition in the sector for the goods or services concerned,"
the ECJ ruled.
The ruling confirms Google's business model, said Geert
Glas, an intellectual property rights specialist at law firm
Allen & Overy.
"The court allows a certain degree of free-riding as part of
normal competition on the Internet. The court sees keyword
advertising as something to stay and which has a legitimate
place in the Internet economy," he said.
"I think it's good news for Google. It will be able to
convince customers that they can take out Adwords as long as
these comply with the rules set by the court."
Google's Adwords service, which involves the sale
of keywords to trigger advertisements, is at the heart of the
company's $23 billion online advertising operations and a key
plank of commerce for Internet service providers.
British judges, who will have to make a final decision in
the Interflora case, may decide in favour of Interflora as the
nature of its service could lead consumers to think M&S is part
of its network, said Mark Owen, at London-based law firm
Harbottle & Lewis.
Overall the Luxembourg ruling was a setback for brand
owners, he added.
"The case is unlikely to be of assistance to many other
brand owners who are trying to stop their competitors bid on
their brands as keywords," he said.
Interflora welcomed the ruling, saying judges broadened the
scope of possible trademark infringements.
"This ruling has gone a bit further," said Helyn Mensah of
Pinsent Masons, who acts for Interflora.
"It's saying that if you use a keyword that is identical to
a registered trademark or brand, and that use has an adverse
effect on the brand owner's ability to attract or retain
consumers, then that is also infringement," she said.
Affirming last year's ruling in a case involving Google and
Louis Vuitton , the ECJ also said that brand owners
could go after rivals if the trademark free-riding confused
consumers as to who was providing the service or the goods.
It will be up to national courts to decide on the merits of
each case, the judges said.
(Editing by Rex Merrifield and Helen