Using big data in big litigation

Keyword advertising is worth around £3 billion a year in the UK alone, most of which is spent on Google’s AdWords programme. For most businesses it is an essential part of online retailing. But what happens when that online opportunity becomes a commercial threat? That was the scenario facing Interflora when a number of competitors chose to promote alternative flower delivery services by using Interflora trade marks as keywords.

The challenge

Enter a search term on Google and a page instantly delivers relevant listings both as adverts and ‘natural’ results. Competitors pay Google to sponsor ‘keywords’. Their adverts then appear at the top of the search results page in the ‘golden box’.

Some time ago Google changed its trade mark policy enabling companies to ‘bid’ on competitors’ trade marks in the Google AdWords advertising programme.

Interflora's competitors could therefore use the Interflora trade mark as an AdWord to advertise its flower delivery service. So when a customer wanting flowers from Interflora’s delivery network used the search term “Interflora”:

• Adverts for Marks & Spencer’s flowers appeared in the golden box
• Adverts for florists not in Interflora’s flower delivery network appeared alongside adverts for the official Interflora website

This had two major financial implications for Interflora. First, Interflora’s advertising costs went up over 3,000%. Second, Interflora lost business to Marks & Spencer and other competitors. This meant the conversion rate from ‘search to purchase’ dropped dramatically as a result of competitor keyword bidding.

Pinsent Masons was instructed by Interflora to pursue an action against all competitors bidding on the Interflora trade mark.  We cleared the ‘Google bidding landscape’ until only two companies remained, Marks & Spencer and Flowers Direct, against whom proceedings were launched for trade mark infringement.

Around the same time that Interflora launched proceedings against its competitors, M&S and Flowers Direct, Louis Vuitton took direct action against Google in France. As a result of Louis Vuitton’s case the Court of Justice of the European Union created a completely new test for infringement. This required the national court to determine whether the competitor’s sponsored link allowed a “reasonably well-informed and reasonably observant internet user” to tell if the advert for the goods came from the trade mark owner or the competitor.

In the Interflora action, the consumer survey evidence to satisfy this “transparency test” was ruled disproportionate by the Court of Appeal as it set a new cost/benefit test for the admissibility of survey evidence. The case was due to proceed without the benefit of a survey to evidence ‘confusion’ , the approach typically used in trade mark cases.

The solution

The team conducted a detailed analysis of the ‘Google Analytics’ data and other online metrics which advertisers use. They tracked the internet user’s journey from initial search to final purchase, thus acquiring anonymised ‘big data’ evidence. The evidence showed that ‘confused’ customers searched for Interflora, visited the M&S website, then ‘bounced’ immediately back to the Google search results page after apparently realising it was not part of the Interflora network.

By comparison, the data showed that customers who searched for Interflora on Google and subsequently visited its site stayed there for a considerable length of time, often to complete a purchase.

Justice Arnold accepted that this evidence could only be explained by average internet users being confused by the M&S advert which appeared on the search results page in response to a search for ‘Interflora’. 

The result

This was the first time a court had accepted this type of ‘big data’ evidence as a proxy for actual evidence of customer confusion. The outcome was closely watched and subsequently reported around the world, including in The Financial Times, The Times of London and The Guardian.

An injunction was succesfully secured that not only prevented M&S from actively using the Interflora trade mark, it also forced M&S to ‘negative match’ Interflora so as to exclude it from all AdWords campaigns relevant to flowers. It is no understatement to say this has impacted keyword advertising strategies across the globe. The case was appealed and subsequently settled on confidential terms.

The case highlights that we are more than just good lawyers and sector experts: we are proactive and tech-savvy, and think creatively for and with our clients.