12th April 2011

Admin for Ad Men: changes in online advertising regulation

Internet Keywords and Inter-flora versus Marks and Spencer plc

The Advocate General recently delivered an Opinion on a question put to the European Court of Justice involving alleged search engine keyword ‘coat-tailing’ by Marks & Spencer.  In that case, M&S sponsored the keyword ‘interflora’ on the Google AdWords system, so that users who searched for ‘interflora’ would see a link to M&S’ own flower delivery service in the sponsored links section.  Naturally, the owners of Interflora were not best pleased with this and sought to have M&S’ advert taken down as it infringed on their trademark.

The Advocate General recognised that a distinctive trademark (like ‘Interflora’ or ‘Kodak’) could be hijacked by competitors trying to gain an unfair advantage.  This is distinct from coat-tailing that is coincidental: a fruit & veg wholesaler who sponsors the word ‘apple’ it is unlikely to be unfairly taking advantage of the popular iPod manufacturer. However there was little doubt here that M&S was seeking to take advantage of Interflora’s popularity in sponsoring the keyword ‘interflora’: the Opinion recognised that there was a danger that consumers presented with a link to M&S Flowers after searching for ‘interflora’ could believe that M&S Flowers was a part of Interflora’s business network.

However the Advocate General stopped short of encouraging prohibiting all such ads. There are potential grey areas: even in the present case, some Google users may search for ‘interflora’ simply as a way to find a flower delivery service, rather than as a way of finding Interflora’s own website.  Further, in cases concerning trademarks less distinctive than ‘Interflora’, advertisers may simply argue that they are merely trying to present themselves as commercial alternatives and that customers generally have the ability to tell the difference between competing products.  The tension between the protection for trademark rights and the need for undistorted competition will clearly be an issue in such ‘grey area’ cases, which will need to be resolved on a case by case basis.

Interflora will find the Opinion very encouraging, and other holders of distinctive trademarks will take heart from the Court’s readiness to protect their rights in cases where competitors seek to exploit those trademarks in a bid to siphon away confused customers. The ECJ’s ruling on the case may clarify how similar matters will be treated by the courts.

The new Advertising Standards Agency rules

On 1 March this year, the ASA introduced new guidelines regulating the use of digital advertising. Since then, online advertising is now monitored in the same way as TV, radio and printed ads.

Online advertisers must now ensure that any “communication for a good, service, opportunity or gift that primarily sets out to sell something” must be “legal, honest, decent and truthful”. So, claims about the prowess of your business must be true, special offers must be valid and product descriptions must be accurate. This applies equally whether advertising on your own website, on a paid-for location (such as Google AdWords) or non paid-for locations which are under your control (like Facebook or Twitter).

Businesses should now review their digital marketing material as a matter of priority.  The ASA can force the removal of offending adverts, name and shame offenders and, interestingly, put up ‘counter-adverts’ highlighting an offender’s non-compliance.  In an age where record numbers of consumers go online for an ever increasing range of goods and services, businesses can ill-afford to have their online presence damaged by inviting such sanctions upon themselves.

Stewart Dunbar

Trainee Solicitor

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