UK: Reed Solutions Plc -v- Reed Business Information Limited and Others

Originally published March 2004

In a disappointing judgment for Reed Solutions Plc, the Court of Appeal this month considered the use of metatags and internet search engine keywords in the context of trade mark infringement. It also provided guidance on the own name defence and identicality of marks and services and re-visited the application of the user principle in relation to damages for trade mark infringement and passing off.

The appellants, Reed Business Information Limited, Reed Elsevier (UK) Limited and Total Jobs.com Limited ("RBI") are part of a large multi-national publishing company whose publications include large sections dedicated to job advertising. The respondent, Reed Solutions Plc, a well-known agency established in 1960 by Mr Alex Reed registered the trade mark "Reed" in 1986 in class 35 in relation to employment agency services. Both parties started to use the internet actively as a business tool in the mid to late 90’s. RBI had never used "Reed" on its own, save as a keyword which caused a banner advertisement for the appellants to appear when users typed in "Reed" as a search term. RBI had used two logos incorporating the words "Reed Elsevier" and "Reed Business Information", and had used these composite names themselves, the latter as part of a copyright notice on its website and also in invisible form as a metatag. At first instance, Pumfrey J found there to be trade mark infringement (at least pursuant to section 10(2) of the Trade Marks Act 1994, implementing article 5(1)(b) of the EU Trade Marks Directive) and passing off. At a later application, Pumfrey J also held that damages could be awarded on the "user" basis - he stated this may apply in cases such as this where it was not possible to show actual loss of sales or diversion of business.

The Court of Appeal overturned Pumfrey J’s decision on all counts save on the question of infringement in relation to use of the logos, which was no longer in issue. Jacob LJ criticised the trial judge’s approach to the question of trade mark infringement in that he failed to distinguish sufficiently between the requirements of section 10(1) and section 10(2). In doing so he provided useful comment on the question of when a sign should be considered to be identical to a registered mark (LTJ Diffusion-v- Sadas Vertbaudet case C-291/00). Jacob LJ agreed with the ECJ’s assertion that the criteria for identity of trade mark and sign must be interpreted strictly, although he criticised the marriage of this strict interpretation with the importation of the concept of imperfect recollection. He found no identity between "Reed" and any of the appellants’ signs (though he found them to be similar). Moving on to consider the construction of the specification of services, more guidance was provided; one must identify the core and unique features of the services in question, which, in this case, are selection and judgment. Adopting this approach, Jacob LJ concluded that the service of publishing job advertisements was not identical to employment agency services, though they were similar.

In considering section 10(2) he found there to be no likelihood of confusion based on the use of the Reed mark in the copyright notice or in the metatag or keyword. He also rather surprisingly suggested that use of a metatag is not necessarily use as a trade mark in the course of trade at all! However the key issue for the Court of Appeal was whether causing a site to appear as a result of use of a sign as a metatag or a keyword leads to a likelihood of confusion. Merely causing a site to appear by these means, without more, did not, in the appeal court’s view, lead to such confusion. In the absence of an actionable misrepresentatation, it was concluded that the claim for passing off also failed.

So far as the own name defence is concerned, the appeal court confirmed that this was available to a company, subject to any reference to the European Court of Justice. More importantly perhaps the Court of Appeal also held that use of one’s own name even as a trade mark can provide a defence provided there is no significant deception.

Finally, Jacob J questioned the application of the "user" principle (which has recently staged somewhat of a renaissance in the UK following the Eddie Irvine case) to calculating damages in trade mark or passing off cases, where the mark in question is not the sort of mark that is actually available for licensing.

This decision highlights just how different the approach of the UK courts on the question of invisible internet use now is to that of the courts in the United States where the doctrine of initial interest confusion applies. The Court of Appeal here found that the fact that the keywords in issue would lead to the appellants website did not mean that the surfer would think that there was a connection with the registered proprietor of the trade marks.

However it is arguable that a different judgment on infringement may have been reached if section 10(3) infringement (which does not require confusion) had been alleged. At first instance, Pumfrey J did perhaps attempt to import section 10(3) into his reasoning by focussing on his finding that the purpose of the metatag in question was to attract custom unfairly. However, Jacob L J, in his consideration of the issues surrounding section 10(2) argued that the purpose of the metagtag had no relevance here. Instead he reinforced the requirement for the existence of an actual likelihood of confusion. It seems clear that the UK courts are presently reluctant to broaden the scope of trade mark protection to cover "invisible" uses on the internet. In the absence of an ECJ decision on the issue, this Court of Appeal judgment means this is likely to remain the case for some time.

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