Reed Executive Plc & Ors v Reed Business Information Ltd & Ors

The Court of Appeal allowed the appellants' appeal in relation to most claimed infringements, holding that only the unappealed findings relating to the visible logos and Version 1 of totaljobs remained. The court applied the Directive tests for trade mark infringement (Art. 5(1)(a) and 5(1)(b)) and concluded there was no strict identity of sign and mark and no identity of services for the disputed uses; most contested uses therefore fell to be judged under Art. 5(1)(b) and were held not to be infringing.

Key legal points: the notion of identity under Art. 5(1)(a) must be applied strictly (LTJ Diffusion); additions to a word mark can prevent "identity" and require a likelihood-of-confusion inquiry under Art. 5(1)(b); the proper construction of a services specification is to identify the core activities of the named service at the date of registration; the court rejected that totaljobs in its relevant versions was providing core "employment agency services"; the own-name defence in Art. 6(1) / s.11(2)(a) can be available to a company and may protect use of a name even where limited confusion exists so long as use accords with "honest practices" (Gerri/Kerry guidance was followed).

The court rejected infringement and passing off claims based on invisible or indirect internet uses (metatags, directory listings and Yahoo banner reserved-word activity), and found the copyright notice alone did not establish infringement. The judge's order and the quantum inquiry were remitted for reconsideration in light of these findings.

Background and parties: Reed Employment (the claimants/respondents) owned a registered word mark "Reed" for "employment agency services" (registered 1986). Reed Business Information, Reed Elsevier and totaljobs.com (the defendants/appellants, collectively "RBI") operated an online recruitment website totaljobs.com. Pumfrey J had found trade mark infringement and passing off in respect of several versions of totaljobs (notably Version 1) and associated uses; RBI appealed.

Nature of the claim and relief sought: The claim combined registered trade mark infringement under the Trade Marks Act/Directive provisions (articulated as s.10(1)/s.10(2) and s.11(2)/Art.6(1) defences) and common-law passing off. Remedies sought included declarations, injunctions and an inquiry as to damages; the lower court ordered an inquiry and allowed damages on a "user"/royalty basis for certain uses.

Procedural history: The appeal came from two judgments of Pumfrey J (substantive and further procedural matters) reported at [2003] RPC 12 and [2002] EWHC 2772 respectively. The Court of Appeal heard full argument and gave a reserved judgment allowing the appeal in major respects.

Issues framed: (i) whether the defendants' signs were "identical" to the registered word mark "Reed" for Art.5(1)(a) purposes, or merely similar so as to engage Art.5(1)(b); (ii) whether the services provided by totaljobs were identical to the registered "employment agency services"; (iii) whether a company may rely on the "own name" defence under Art.6(1)/s.11(2)(a); (iv) whether various internet practices (visible logos, copyright notice, metatags, reserved-word banners and directory listings) amounted to trade mark infringement or passing off; (v) the appropriate basis and scope of any inquiry as to damages.

Court's reasoning and conclusions:

• Identity of sign: The court followed the ECJ guidance in LTJ Diffusion: identity requires reproduction without modification or only such insignificant differences as would be unnoticed by the average consumer. The composite names "Reed Business Information" and "Reed Elsevier" contained additions significant enough to avoid "identity" with the registered mark "Reed" and thus the case did not fall within Art.5(1)(a) save for the unappealed logo findings.
• Identity of services: The court adopted the principle that specifications should be confined to the core meaning of the phrase at registration. It analysed the core activities of an "employment agency" and concluded totaljobs (Versions 1–3) was essentially a publisher/searchable job-advertising service, not an employment agent exercising control over introductions or having a proprietary interest in matches. Thus services were not identical to "employment agency services".
• Art. 5(1)(b) assessment: Having rejected identity, the court applied the global likelihood-of-confusion test (Sabel, Canon, Lloyd and related authority). Taking account of the common surname "Reed", the limited distinctiveness arising from that, the internet context, and survey evidence, the court concluded that use of the copyright notice alone, metatags, directory entries and reserved-word Yahoo banners did not give rise to a sufficient likelihood of confusion; infringement and passing off were not made out in respect of those uses. The judge's earlier findings as to Version 1 and the logos were not appealed and remained binding.
• Own-name/Art.6.1 defence: The court held that a company can invoke the own-name defence and that trade mark use can fall within Art.6.1. The proviso of "honest practices" requires a factual overall assessment; some limited co-existence and limited confusion can be tolerated where use is fair. RBI had progressively reduced the use of "Reed" after Version 1 and acted in accordance with honest practices thereafter.
• Internet specific issues: The court rejected the proposition that invisible metatag or reserved-word uses automatically cause infringement: there was no evidence of misleading substitution or of sufficient confusion in search-result contexts, and the mere triggering of an otherwise innocuous banner by a reserved word did not establish a likelihood of confusion.
• Damages and remedies: The Court of Appeal reduced the ambit of any inquiry and remitted the quantum inquiry to the trial judge for case-managed reconsideration, expressing doubt about automatic application of a "user" royalty approach and urging proportional management of the damages process under civil procedure rules.

Result: The appeal was allowed in large part; only the earlier unappealed findings concerning the logos and Version 1 remained effective and the remainder of the infringement and passing off findings were reversed or set aside and the damages inquiry remitted.

Appeal allowed. The Court of Appeal held that (i) the defendants' uses did not engage Art.5(1)(a) because the accused signs (eg "Reed Business Information") were not identical to the registered mark "Reed"; (ii) totaljobs in the relevant versions did not provide the core "employment agency services" for which the mark was registered; (iii) most contested uses therefore fell to be judged under Art.5(1)(b) and, on the global assessment, did not give rise to a likelihood of confusion or passing off (save for the unappealed findings relating to the logos and Version 1); (iv) the own-name defence under Art.6(1)/s.11(2)(a) is available to a company and may protect honest concurrent use; and (v) the damages inquiry was to be remitted for reconsideration in light of these rulings.

Appeal from two judgments of Pumfrey J in the High Court of Justice (Chancery/Patents list) concerning liability and subsequent procedural relief: Pumfrey J (substantive judgment) 20 May 2002 ([2003] RPC 12) and (procedural/damages-related) 19 December 2002 ([2002] EWHC 2772). The present judgment is the Court of Appeal decision [2004] EWCA Civ 159.