The lawsuit was filed in UK courts by Interflora, an online flower delivery service, and alleges that rival floral business Marks & Spencer infringed on its trademark by sponsoring Google AdWords with the Interflora name. Its argument of trademark infringement was supported when Interflora was able to prove that Marks & Spencer was bidding on its name and gaining an unfair advantage as a result.
The most notorious example in recent history of firms seeking a competitive advantage at the expense of a rival was when Lowcostholidays ran advertising on Thomas Cook's name as the travel giant's financial trouble became public knowledge. Lowcostholidays is accused of using the controversial search phrase 'been Thomas Crooked?' in its search engine advertising in order to bid against adwords 'Thomas Cook' and 'Thomas Cook Holidays.'
By request, search engines send companies a Third Party Authorization Form to prevent competitors from bidding on their names. However Google is said to not widely support this service. As for the Interflora issue, the case concerned "double-identity" which was use by Marks & Spencer of an identical sign (Interflora) in relation to identical services, namely flower-delivery services. In its judgment on the case, the Court of Justice of the European Union has clarified the circumstances in which a sponsored link advertiser will be liable for trademark infringement when they use a keyword that has been registered as a trademark by a third party. In the U.S. Google has generally allowed parties to bid on a trademarked word, however, the resulting ad cannot use the trademark of another company in the actual text.
The Court reiterated the need for balance between the protection offered to registered trademarks and fair competition in the sector for the goods and services for which the trademarks are registered.