European Court rules in favour of Interflora – an end to brand bidding?

by Patrick Altoft on September 22, 2011 / 3 responses

The Court of Justice of the EU has today ruled in favour of Interflora in the brand bidding case against Marks & Spencers.

The full judgement is here.

Interflora had argued that M&S shouldn’t be allowed to bid on the keyword “interflora” via Adwords and it seems that the European Court agrees with them.

The ruling is good news for brands because it could (in my personal opinion) eventually spell the end of controversial brand bidding in the UK, assuming that the High Court in London decides to uphold the European Courts ruling sometime in 2012.

Brand bidding is something that costs brands heavily and rarely delivers much ROI for the people piggybacking on other companies brand terms. The only real winner with brand bidding is Google.

Interflora has blogged about the ruling and their statement is below.

Interflora is delighted by the judgment of the Court of Justice of the European Union which today ruled in their favour. This ruling will enable brand holders across Europe to deliver quality service and ensure that trade marks guarantee the origin of the goods bought by consumers online. Keyword advertising is a very powerful tool and so it is vital for consumer protection that internet search results take consumers immediately to the brands they were looking for.

This judgment goes much further than previous rulings by saying that the use by a competitor of a keyword identical to the trade mark in relation to identical goods or services has an adverse effect on the investment in the trade mark where that use substantially interferes with the brand’s reputation and its ability to attract and retain consumers. Further, a competitor may be construed as free-riding on a brand when that competitor uses the brand owner’s trade mark as a paid for keyword to deliver sponsored advertising along side natural search results. This is exactly what Interflora and other global brands have been arguing for many years.

However, Interflora acknowledges that the judgment of the Court of Justice needs to be applied by the High Court in the UK to determine the question of Marks & Spencer’s liability. This is expected in the course of 2012.

Thanks to Leeds SEO for the tip!

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Patrick Altoft is Director of Search at Branded3, a Leeds SEO & Digital Agency specialising in SEO, Web Design, Development & Social Media.