INTA Bulletin

February 15, 2012 Vol. 67 No. 4 Back to Bulletin Main Page

EUROPEAN UNION: Guidance on Infringement by Dilution and Free-Riding Through Keyword Sponsorship

On September 22, 2011, the Court of Justice of the European Union (CJEU) gave judgment on a reference from the English High Court in Interflora v. Marks & Spencer (Case C-323/09), which concerned the sponsorship by Marks & Spencer (M&S), advertising flower deliveries, through the Google AdWords service of words (including INTERFLORA) corresponding to trademarks of Interflora, a flower delivery network service, without Interflora’s consent.

This report focuses on questions regarding infringement under Article 5(2) of the EU Trademarks Directive (Council Directive 89/104/EEC, replaced by Directive 2008/95/EC) and Article 9(1)(c) of the CTM Regulation (Council Regulation (EC) No. 40/94, replaced by Council Regulation (EC) No. 207/2009) concerning a mark used without due cause that takes unfair advantage of the repute or distinctive character of a trademark with a reputation (free-riding) or causes detriment to such distinctive character (dilution).

The Judgment
According to the CJEU, in relation to dilution, a trademark proprietor may prevent use of the trademark that reduces the distinctiveness of the mark without having to wait for the “end of the process” of dilution: that is, the total loss of distinctive character. This means that a trademark proprietor should be able to prevent “cuts” without waiting for its mark’s “death by a thousand cuts.”

The Court held that dilution occurs where the use is such as to contribute to turning the trademark into a generic term. However, if the resulting advertisement is clearly for an alternative product (and does not make any other “generic” use of the trademark), there will be no dilution, as the use serves only to draw the Internet user’s attention to the existence of the alternative. It will be for the English court to determine whether this was the case.

In relation to taking unfair advantage, the Court found that although the selection of a trademark with a reputation as a keyword for triggering advertisements did “take advantage” of its reputation, such use is fair competition, not an infringement, where the resulting advertisement is offering a mere alternative. However, where the advertisement offers imitation goods or services, or otherwise causes dilution (or tarnishment) or adversely affects one of the functions of a trademark, such use may “take unfair advantage” and infringe. Again, it will be for the English court to determine whether free-riding has taken place, depending on its assessment of M&S’s advertisements.

The judgment contains a clear statement that the use of a trademark with a reputation in sponsored advertisements that may tend to turn the trademark into a generic term is likely to be infringement by dilution. This is the first clear statement from the CJEU on the meaning of dilution, and it should be welcomed by proprietors of trademarks with a reputation.

For more on keywords in Europe, see Google AdWords Advertising and Community Trademark Law: All Clear After the Court of Justice Has Spoken? (INTA Bulletin Vol. 66 No. 3 February 1, 2011) and EUROPEAN UNION: AG’s Opinion on Use of Third-Party Marks as Google Keywords (INTA Bulletin Vol. 66 No. 13 July 15, 2011)

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers
are urged to check independently on matters of specific concern or interest.

© 2012 International Trademark Association