At its heart, the case is about keyword advertising and the display on the internet of M&S's advertisements in response to the search term "interflora" (see feature article "Trade marks on the internet: how far does liability extend?").

The litigation started in 2008 and seems to have taken on epic proportions, with this decision representing the third Court of Appeal judgment in the dispute, as well as a European Court of Justice (ECJ) ruling on questions that arose in connection with the infringement proceedings ([2012] EWCA 1501, see Briefing "Surveys in trade mark infringement cases: lessons from Marks & Spencer v Interflora"; C-323/09, www.practicallaw.com/5-509-5156).

Interflora issued proceedings against M&S for trade mark infringement under Articles 9(1)(a) and 9(1)(b) of the CTM Regulation (Article 9(1)(b)). Interflora was successful in its trade mark infringement case under Article 9(1)(a) ([2013] EWHC 1291 (Ch); see Briefing "Keyword advertising: lost its bloom?"). There was an additional judgment in Interflora's favour on the scope of the injunction ([2013] EWHC 1484 (Ch); see News brief "Adwords and negative matching: round two for M&S"). The court summarised the appeal issues as follows:

The question was whether the advertisements in issue did not enable reasonably well-informed and observant internet users to ascertain whether the goods and services advertised originated from Interflora or an undertaking economically linked to Interflora, or, on the contrary, from M&S. The court upheld the High Court's finding that it was entitled to have regard to the effect of the advertisements on a significant section of the relevant class of consumers and it was not barred from finding infringement because the majority of consumers were not confused.

The court found that the onus is on the trade mark owner to show that the advertisement complained of does not enable informed and reasonably attentive internet users to ascertain if the goods in the advertisement originate from the trade mark owner, or an economically linked undertaking, or from a third party. The High Court was wrong in holding that the onus lies on the third-party advertiser to show that the use of the sign in context is sufficiently clear and that there is no real risk of confusion by the average consumer as to the origin of the advertised goods. The High Court's incorrect approach to the burden of proof had probably influenced its assessment of the evidence, which consequently affected all of its findings in the case.

The concept of initial interest confusion derives from US trade mark law and is a highly controversial type of confusion that arises when a consumer is confused as to the origin of goods or services before purchase. This sort of confusion has been found in an earlier High Court decision involving Article 9(1)(b) infringement, where the High Court held that it was equally relevant for the purposes of Article 9(1)(a) (Och-Ziff v OCH Capital [2010] EWHC 2599 (Ch)).

However, the court found that it was not helpful to import the doctrine of initial interest confusion into EU trade mark law, at least so far as it applies to the use of a sign that is the same as, or similar to, a trade mark used as a keyword in an internet referencing service, and that has the potential positively to mislead. The court found that the doctrine is an unnecessary and potentially misleading gloss on the tests as previously set out by the ECJ in determining whether the relevant sign has an adverse effect on the origin function of a trade mark (Google France SARL and Google Inc v Louis Vuitton Malletier SA, Google France and Google Inc v Viaticum SA and another, and Google France v Centre national de recherche en relations humaines (CNRRH) SARL and others C-236/08, C-237/08 and C-238/08, www.practicallaw.com/3-502-1166; Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmüller GmbH v Günter Guni and another C-278/08; Portakabin Ltd and another v Primakabin BV C-558/08, www.practicallaw.com/3-502-8766).

The relevant question is whether an advertiser has enabled the average consumer to ascertain the origin of the advertised goods in order to make an informed decision.

The court considered the admissibility of certain evidence and the reliance that the High Court had placed on that evidence. On the issue of the academic papers put forward in support of Interflora's case, the court found that this was a reasonable exercise of the High Court's discretion and it was not one with which it could properly interfere. On the issue of the witness evidence, the court found that the High Court had erred in giving the evidence the weight that it did.

The High Court had considered the role of negative matching in the Google AdWords process. Negative matching a term prevents an advertisement from displaying to people that search for certain terms, such as a competitor's brand name. Interflora complained that M&S had bid on generic flower-related terms without negative matching the word "interflora". The court, applying Google France, dismissed M&S's appeal on negative matching issues and agreed with the High Court that a failure to negative match could constitute infringing use of a competitor's trade mark.

It is clear that the court favoured close adherence to EU case law on the tests for trade mark infringement, rather than the High Court's attempts to innovate and develop this law further. A trade mark owner must establish that the advertisement would not enable the average consumer to ascertain if the goods originate from the trade mark owner (or his licensee) or from a third party. The decision also points to the dangers of a court permitting the late admission of technical evidence, which should be subject to the full rules on expert evidence and be subject to cross-examination.