Africa and the Hague Agreement

South Africa is in a fortunate position in developing our trade mark case law as we can adopt developments in Europe which suit us and discard those which don’t. The reason for this is that the South African Trade Marks Act is closely modelled on the United Kingdom Trade Mark law and the European Directive on Trade Marks with the result that our courts have been happy to seek guidance from the European courts in interpreting the South African Act but have made it clear that we are not bound by such rulings.

An area of commerce which tests all areas of law, intellectual property being no exception, is the ever increasing and developing field of e-commerce. The particular issue which I wish to explore this month is the question of keywords and whether the purchase and use of a third party’s trade mark as a key word may constitute trade mark infringement.

The European Court of Justice has dealt with a number of such issues, the most recent being the case of Interflora Inc v Marks & Spencer PLC (M&S) where the CJEU was faced with a number of questions in the context of infringement proceedings relating to the selection of the registered trade mark Interflora as a keyword for use in Internet reference services by a competitor of the registered proprietor. When an Internet user entered Interflora in the relevant search engine an advertising link to Marks & Spencer’s website was generated under the heading “sponsored links” at the right hand side of the screen. The advertising link displayed the following text:

“M&S Flowers Online Gorgeous fresh flowers & plants Order by 5 p.m. for next day delivery”

M&S paid a fee to the referencing service, AdWords. Interflora claimed that the use of the Interflora trade mark in this manner constituted both classical trade mark infringement and dilution. It was common cause that Interflora is a well known trade mark for flower delivery services.

Classical trade mark infringement entails the use of a trade mark, in the course of trade, in relation to goods or services in respect of which the trade mark is registered and, significantly, where the identical trade mark is used, there is no further requirement that a likelihood of confusion or deception need be established. On the face of it M&S’s conduct would appear to meet all these requirements. However the CJEU reaffirmed that a trade mark is always supposed to fulfil its function of indicating origin, but then somewhat muddied the waters by referring to trade marks performing other functions, in particular for the purposes of advertising or investment.

The CJEU never finds on the facts, it merely stipulates what legal criteria must be adopted by the referring court, in this case the UK High Court. In the Interflora case the CJEU stated that it was for the referring court to consider whether the condition of an adverse effect on one of the functions of a trade mark was met but then did consider it appropriate to provide the referring court with further guidance.

In dealing with the potential adverse effect on the origin function the court reaffirmed the test that the court should assess whether reasonably well-informed and reasonably observant Internet users were deemed to be aware, on the basis of general knowledge of the market, that M&S’s flower delivery services was not part of the Interflora network and secondly, if that was not generally known, whether its advertisement enabled such persons to tell that the services concerned did not belong to the Interflora network.

As indicated above, the court also muddied the waters by considering the adverse effect on the advertising function and investment function but as I believe it will be some time, if ever, before the South African courts embrace the concepts of an advertising and investment function of a trade mark in classical trade mark infringement (as opposed to trade mark dilution) we needn’t consider the court’s guidelines on those issues.

What we can do is apply the origin function test to the South African situation where I believe it is safe to conclude that Interflora is also a well known trade mark and Woolworths could conveniently replace Marks & Spencer in the South African environment.

The first, and most important, question is what constitutes the reasonably well-informed and reasonably observant South African Internet user. While access to the Internet is widely available in South Africa, the Internet user must be literate both in the literal sense and the computer sense. I believe that it is safe to say that any Internet user who is aware of keywords and Adwords would not initially be confused because such user would be astute enough to realise that the mere entry of a trade mark such as Interflora will result in numerous hits that are not linked with the genuine Interflora business, and any doubt would also be removed by the fact that the reference to a competitor business appears under the heading “sponsored links” on the right hand side of the screen. The next issue is precisely what appears in the sponsored link, as well as in the website that the link is connected to. In this case, using our hypothetical Woolworths example and adapting it to the text referred to above, clear reference to “Woolworths Flowers Online” together with a link to the Woolworths website would remove all doubt as to origin.

In the circumstances while the the law is complex and will no doubt challenge the European courts for many years to come, South African law has already accepted that use otherwise than as a trade mark does not constitute classical trade mark infringement (once again relying on European authority) and the application of this principle to the facts of a keyword trade mark infringement case in South Africa could allow our courts, by referring to Interflora, to hone in on the key issue which is that the mere use a third party’s trade mark as a keyword would not constitute classical trade mark infringement but, if there are other elements in the sponsored link or the website linked thereto which cause the reasonably well-informed and reasonably observant Internet user to be confused as to origin of the goods or services in question, such us would constitute trade mark infringement.

Date published: 2012/09/06
Author: Charles Webster

Tags: hague agreement south africa trade mark