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On the way into the office today I noticed a bunch of tweets along the lines of 'Interflora wins EU PPC case vs M&S'. 

I have just read the ruling in full, and I don’t interpret it as a win at all, but there are some key takeaways that you need to be aware of if your brand is involved in bidding on competitor trademarks. 

The background

In May 2008 Google told UK advertisers that they could bid on competitor keywords. Shortly after that M&S started to bid on the ‘Interflora’ keyword. The florist (or florists, since it is actually a network) didn’t care for M&S’ strategy and instructed its lawyers to go to work.

The case was first heard in the UK and subsequently elevated to The Court of Justice of the European Union, which yesterday made its judgement.

Interflora wrote a blog post in which it states that it is “delighted with the ruling”. I’m a little surprised at that, because I don’t see it as an outright victory. Far from it. 

The case has been referred back to the UK, where a court will make a final call on whether or not Interflora’s trademark has suffered any reputational damage as a result of the M&S paid search campaign. If it did then M&S may find itself in water of indiscernable temperature (possibly hot).

The EU ruling

The core ruling is that trademark owners are “not entitled to prevent advertisements displayed by competitors on the basis of keywords corresponding to that trademark”. By which INTERFLORA, as it is legally known, cannot stop M&S from bidding on the term ‘Interflora’.

But as with all of these things the devil is in the detail. Trademark law is incredibly dense, and there appear to be lots of grey areas, but my understanding is that while trademark owners cannot stop competitors from bidding on their trademarks on platforms like Adwords, they are nevertheless protected in various ways.

Brand bidding is still something that you can undertake. Such usage “as a rule, falls within the ambit of fair competition”. Unless certain lines are crossed...

Careful now

Competitors who do bid on trademarks need to be very, very careful about the text used in ads.

There are three things you must not do, under any circumstances…

1. Ads must not cause reputational damage to the owner of the trademark, nor to the trademark itself. M&S was wise not to use the ad text: "Interflora sucks. Buy your flowers at M&S."

2. Ads must not make it difficult for internet users to determine who is selling the advertised goods or services. If M&S had implied that it was part of the Interflora network then it would have been in trouble.

3. Ads must not take “unfair advantage of the distinctive character or repute of that trademark”, nor should they damage or dilute the character or repute (for example by turning the trademark into a generic term).

The full judgement can be found here. I’d love to hear your views on whether I have interpreted this correctly, and what the judgement means for brands.

The real winner of course is Google, as it's going to be increasingly important to bid on your own trademarks, rather than allowing organic search to do its job.

Chris Lake

Published 22 September, 2011 by Chris Lake

Chris Lake is CEO at EmpiricalProof, and former Director of Content at Econsultancy. Follow him on Twitter, Google+ or connect via Linkedin.

582 more posts from this author

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Patrick Altoft

I think a lot of brands would prefer brand bidding to stop.

It does have a negative effect on the brand owner in terms of lost traffic that leaks to competitors and also the inflated PPC costs that end up being paid to Google.

almost 5 years ago

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@LordManley

I went through precisely the same process as you did. I read and tweeted the Interflora blog, then I read and tweeted some coverage of the opportunity to appeal on BusinessWeek, then I read the actual ruling and thought 'Wait! That's not right!'.

As far as I can see this is an open invitation from Europe to bid on other people's trademarks and not the victory that Interflora have declared it.

On balance I am glad, genericised terms are to be avoided, but for borderline brands there is no advantage to excluding competitors from being visible in the same space.

almost 5 years ago

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George

I would never use this technique for my advertising campaigns, too risky in my opinion and I prefer to focus on more "traditional Methods"

almost 5 years ago

Ian Miller

Ian Miller, Search Director at Crafted

I agree, certainly looks like a win for M&S to me, unless they were using the trademarks within the ads resulting in misrepresentation.

If they were just simply bidding on the keywords to trigger their own ads without using the trademark in copy or negatively, they it's no change / win for M&S.

almost 5 years ago

Chris Lake

Chris Lake, CEO at Empirical Proof

@Ian - that's basically it. Unless Interflora has examples of shady ad text used by M&S then it's going to fizzle out.

almost 5 years ago

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Rachel Morley, Digital Marketing Manager - Search at Aviva

What does this mean for affiliates though? Can this be interpreted to say that if you aren't the brand but are selling that brand that you aren't able to use the brand term? Seems like a lack of clarity again.

almost 5 years ago

Peter Gould

Peter Gould, Senior PPC Analyst at Epiphany

@Rachel - The scenario for affiliates tends to be different in my experience. Ultimately, the brand will or should set out guidelines to its affiliates as to which terms they can and can't bid on or display in ad text anyway. As long as the affiliate works within those guidelines, I don't see there being an issue.

almost 5 years ago

James Gurd

James Gurd, Owner at Digital JugglerSmall Business Multi-user

Morning all,

Chris I think you're interpretation is right. I've just read Dan's blog post and it seems that competitive brand bidding is very much alive, legally. The hand slap is if the use of a competitor's trademark is done in a way that negatively impacts the perception of their brand or confuses the searcher, making them believe that you are representing the brand.

The most important thing for me is whether or not it really adds any value. If I am searching for Interflora, would I really click through to an M&S link? The thought process doesn't lend itself to that click path. However, it's possible that a big promotion/offer could grab attention and divert the thought process to a different website. When I was CLient side I tested some competitive brand bidding (not to say I couldn't have done it more intelligently) and it really didn't stack up. I decided that focussing on my own brand and product range was a more realistic approach.

@Rachel - Peter's right that the control of affiliates around PPC bidding needs to come from your affiliate program guidelines. If affiliates don't work to the guidelines you can screen them out and through the big networks it's also possible to claim back commissions (thought this can be time consuming and the cost of doing so not worth the recovered commission).

I tested letting a key affiliate partner do brand bidding with the agreement that they would use some of the revenue to invest in generic but it did nothing, simply gave them easy commission and didn't drive my acquisition. That said, if you pick carefully you might find an affiliate partner who is a search specialist and can deliver better ROI than a PPC agency and then allowing them to do brand and generic bidding can reap rewards.

thanks
james

almost 5 years ago

Manfredi Sassoli de Bianchi

Manfredi Sassoli de Bianchi, VP Marketing at jobinasecond

In my experience brand bidding is often profitable but if you do it, you should expect your competitors to do the same on your trademark. The implication is that in the medium terms the gains you make will equal the losses, profitability won't increase but spend will.

Looking at things in more detail, I think Google has made it very easy for advertisers to deliver misleading messages. The ads display URL can now contain other trademarks e.g. M&S could display an ad with the following URL: www.interflora.M&S.com.

Based on the latest announcements, I would advice anyone to stop using this tactic.

almost 5 years ago

Jonathan Beeston

Jonathan Beeston, Director, New Product Innovation, EMEA at Media & Advertising Solutions, Adobe

I think there's some particular asymmetry with the Interflora vs M&S battle that you don't see with most brand bidding issues.

First, in my opinion Interflora is one of those brands where the name tends to describe the generic product or service, rather like Hoover. I suspect that some people search for Interflora just looking for a flower delivery service, instead of this specific network of florists.

Second, it's very hard for Interflora to respond in kind. Everyone searching for Interflora is looking for flowers, but only a fraction of those searching for M&S are.

So whereas I agree that most brand bidding issues are a zero sum game, I think there's a bit more to it in this one.

almost 5 years ago

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Paul

3. Ads must not take “unfair advantage of the distinctive character or repute of that trademark”, nor should they damage or dilute the character or repute (for example by turning the trademark into a generic term).

I have a couple of clients who will find the outcome of this case very interesting however, point 3 is a little sticky for me.

If the trademark is already a generic term e.g. the word "Hover" with this ruling would electolux still not be able to bid on the word "hover"

almost 5 years ago

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Joel

Interflora's legal team are going to have their work cut out. Since the September ruling there are now a large number of their other competitors bidding on their brand.

almost 5 years ago

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kevin miz, owner at ts4bp

I have a competitor who has a trademark full of generic keywords, i.e., "Fast and Cheap Bakery." If my business is also a bakery, how can I overcome not bidding on these keywords that are adjectives that describe my business? If I use negative keywords for fast and cheap, I essentially lock myself out of these keywords that people search for. If I use keyword insertion, I will end up with their trademarked name. Ideas?

3 months ago

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