Reposted from DLA Piper’s Law à la Mode Edition 4 – Winter 2011

By:  Michael K. Barron, Sarah Phillips and Nadea Taylor (Boston and London)
“AdWords,” the paid, subscription-based Google referencing service which allows users to advertise their companies alongside Google search results, has recently been the subject of much legal scrutiny.  In late September, the European Court of Justice (ECJ) gave a preliminary ruling on questions referred to it by the English High Court in the case between Interflora and Marks & Spencer (“M&S”), regarding the purchase by M&S of the Google AdWord “Interflora” and other similar AdWords. 
In answering the questions referred to it, the ECJ repeated much of the recent jurisprudence in this area, in particular from the Google France case.  Previous cases established that purchasing a third parties’ trademark as an AdWord would only amount to trademark infringement if such use would have an adverse effect on one of the functions of the trademark.  
The ECJ gave the following guidance on how national courts should assess whether the use by a third party of a sign identical with a trademark in relation to identical goods or services has an adverse affect on one of the functions of the trademark:

By: Bartolome Martin (Madrid)

Some decades ago, the Spanish Tourism Authority’s advertisements across Europe proudly touted that “Spain is different.”  In reality, this may indeed be true.  Spain is an idiosyncratic country where universality and localism are good friends, crisis and luxury seem to have a passionate relationship, and customs from the past walk hand in hand with the latest trends.  This self-contradicting spirit, cultural individuality and inherent diversity are without a doubt reflected in the Spanish fashion market. 

Some decades ago, the Spanish Tourism Authority’s advertisements across Europe proudly touted that “Spain is different.”  In reality, this may indeed be true.  Spain is an idiosyncratic country where universality and localism are good friends, crisis and luxury seem to have a passionate relationship, and customs from the past walk hand in hand with the latest trends.  This self-contradicting spirit, cultural individuality and inherent diversity are without a doubt reflected in the Spanish fashion market. 

The structure of the Spanish fashion manufacturing and distribution market presents a good example.  At first sight, this market appears fragile, with a fragmented industry:  Eighty percent of Spanish manufacturers and distributors have less than ten employees.  However, the strength of the few key players, such as Inditex, the largest manufacturer-distributor in the world and architect of the fast fashion concept, make Spain an extremely competitive and aggressive fashion market.  Buying fast fashion is not just a need or desire in Spain; it is part of the essence of the Spanish lifestyle.  

The Spanish retail market is similarly situated.  Louis Vuitton’s Fashion Director recently referred to Zara, Spain’s world renowned fast fashion retailer, as “possibly the most innovative and devastating retailer in the world.”  Zara’s success is a reflection of the Spanish consumer.  Spanish consumers have constantly evolving preferences; yet the fashion market is not without its difficulties.  Product moves slowly (attributed to today’s hard economic times), product lifecycles are short and there is constant pressure to follow the latest fashion trends.  This makes the Spanish retail business (and, by comparison, the European market in general) a serious strategic and logistical challenge where only the fittest can survive.  

Spanish consumers themselves exhibit conflicting behavior and are the source of many of these idiosyncrasies.  Consumers are fashion conscious and strive to follow the trends, but at the same time, are hardly inclined to pay a premium for the inherent value of such creativeness.  This leads to the lavish availability of fake products in the streets of Madrid and Barcelona, and likewise across the country, particularly rampant are knock-off accessories, including handbags, belts, wallets, etc.  These products are welcomed by the masses, whose pockets have been fiercely punished by today’s economy, but not enough to warrant renunciation of their consumptive habits.  The market will likely continue to evolve, particularly due to the E.U.’s prospective consideration of joining in the Anti-Counterfeiting Trade Agreement.  

Similar issues emerge when you consider the applicable legal framework.  Despite best efforts by E.U. authorities to offer a harmonized environment to European players, Spain’s regional configuration, formed by a bouquet of seventeen autonomous regions and two autonomous cities, results in a multiplicity of overlapping legal regimes that affect and influence commerce, consumer protection, environmental and many other related matters. Leading political figures have admitted the need for an improved structure that favors business endeavors, but to date these plans are merely well intentioned blueprints or openly wishful thinking.  

Notwithstanding these troubles, the Spanish fashion market remains intimate and charming for many of the players, who manage to rise above these challenges and have lived to tell their story of immense commercial success in Spain.