Honest concurrent use is now a reliable defence to infringement in the English courts, but what are its limitations? In the recent decision of Victoria Plum v Victorian Plumbing, Justice Henry Carr told us what it is not. It is not:
- use of the claimant's trade mark, where the claimant's and defendant's marks are not identical, or
- taking steps to exacerbate confusion between the marks, particularly where the confusion will benefit the defendant.
Facts
Victoria Plumbing had been using VICTORIAN PLUMBING in parallel to Victoria Plum's use of VICTORIA PLUMB, for 15 years. Both parties had been using their respective marks for retail of bathroom products. Only Victoria Plum had obtained trade mark registrations for VICTORIA PLUMB (logo and word) in 2010 and 2014.
The defendant, Victorian Plumbing, had been bidding on keywords VICTORIA PLUMB and trivial variations (such as VICTORIAPLUMB and VICTORIA PLUM) since 2008. An infringement claim was brought by Victoria Plum on the basis of its UK registrations.
Decision
As in Interflora (2014), Justice Carr pointed out that merely bidding on keywords will not necessarily lead to confusion. The bidding has to be looked at in conjunction with the ads displayed. Confusion depends on what words are used in the ads and how the relevant consumer would perceive those ads.
The defendant conceded that the use of the identical mark VICTORIA PLUMB in the main text of ads constituted infringement. These ads, produced by Google's "dynamic keyword insertion" service, automatically display the search term (eg. VICTORIA PLUMB) in the main text of the ad. For this to work, a successful bid on the search term must take place before Google will insert the term into the ad.
It was also found that the defendant's bidding on VICTORIA PLUMB (and trivial variations) along with the subsequent ad display of its own mark VICTORIAN PLUMBING, and hybrid marks VICTORIAN PLUMB and VICTORIA PLUMBING, would each lead to a likelihood of confusion.
Honest concurrent use would have succeeded as a defence in respect of the VICTORIAN PLUMBING, VICTORIA PLUMB and VICTORIA PLUMBING ads, had it not been for two crucial factors:
- honest concurrent use only works to protect the use of the defendant's mark, in this case VICTORIAN PLUMBING. The bidding on the identical mark VICTORIA PLUMB was not use of the defendant's mark. This even applies to the instances where the defendant's mark was displayed in the subsequent ad, meaning that the mere bidding on the claimant's mark in this context was enough to fall foul of the defence;
- the bidding on VICTORIA PLUMB was not 'honest'. The evidence showed substantially higher click-through rates to the defendant's site as the bidding and displaying of ads increased. The higher click-through rates after adopting keyword advertising, Justice Carr said, were due to consumer confusion, something the defendants at least ought to have been aware of. The defendant had a duty to act fairly and ensure that the ads were 'transparent'' (citing Google France (2015)). That would include using the defendant's own mark in the ads. This activity only ''exacerbated confusion'' and could not be called honest.
This 'duty' of the defendant not to increase instances of confusion probably does not extend to moving into a new sales channel. The expansion into online retail was considered an inevitable and legitimate business interest, not in breach of the 'honesty' requirement, in IPC Media (2014).
Unusually, the defendant's counterclaim for passing off its rights in VICTORIAN PLUMBING (relied upon as a squeeze in the event it was found to be infringing) also succeeded. To have both claimant and defendant win claims against each other relying on parallel rights is rare (only one previous case, Interlotto (2004), comes to mind). The claimant here had, in previous years, bid on the defendant's mark VICTORIAN PLUMBING and displayed its own ads containing VICTORIA PLUMB. This had been going on since 2011, when Victorian Plumbing had established goodwill. It was accepted by Justice Carr that this bidding alone would mislead the public and create a likelihood of damage.
Conclusion
Honest concurrent use will protect a defendant's use of its own mark. However, where the defendant's and claimant's marks are confusingly similar, this defence will not allow:
- Keyword advertising/bidding of another's trade mark;
- Keyword advertising/bidding of another's trade mark, which will increase the level of confusion;
- Keyword advertising/bidding on marks with a reputation (and hence passing off rights).
Bidding on other brands in keyword advertising, may be acceptable where the mark is not confusingly similar to the bidder's mark (as in Interflora). However, one should be careful about the potential to fall into the trap of infringing as a result of the ''dynamic keyword insertion'' feature of Google's Adwords service.
Case [2016] EWHC 2911
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