IPC Media Ltd v Media 10 Ltd

Long-standing honest concurrent use may mean that a trade mark’s guarantee of origin differs from the guarantee ordinarily provided by a mark used by one undertaking. Some consumer confusion does not necessarily establish an adverse effect on the mark’s essential function.

The decisive question under article 5(1)(b) of Directive 2008/95/EC remains whether the impugned use is liable to affect the functions of the registered mark. Where closely related retail activity is a natural extension of each party’s established business, continued honest use may leave the existing guarantee unchanged. For invalidity based on an earlier passing-off right, the challenger must show that normal and fair use of the registered mark for the relevant services was liable to be prevented when registration was sought.

IPC published Ideal Home magazine and operated mail-order and online retail services under the Ideal Home name. Media 10 operated the long-established Ideal Home Show and later provided online retail services under Ideal Home Show. Although the magazine and show were unrelated, both names had been used concurrently in the home-interest field for many years, and many consumers believed the businesses were connected.

IPC alleged that Media 10’s online retail activity infringed its registered trade mark under article 5(1)(b) of Directive 2008/95/EC, as implemented by the Trade Marks Act 1994. Media 10 counterclaimed for invalidity on the ground that normal and fair use of the registration was liable to be prevented by passing off.

The Intellectual Property Enterprise Court, [2013] EWHC 3796 (IPEC), dismissed both the infringement claim and the counterclaim. IPC appealed and Media 10 cross-appealed. The central questions were whether the challenged use adversely affected the registered mark’s functions and whether normal and fair use of that mark was liable to be restrained in passing off.

1. The appeal and cross-appeal were dismissed. Kitchin LJ delivered the judgment, with which Bean LJ and the Master of the Rolls agreed.

2. The essential function of a trade mark is to guarantee the origin of the marked goods or services. An adverse effect will generally arise where use of a similar sign for similar goods or services creates a likelihood that the public will believe they come from the same or economically linked undertakings. The controlling question under article 5(1)(b) of Directive 2008/95/EC is nevertheless whether the particular use is liable to affect the mark’s functions.

3. The principle concerning long-standing honest concurrent use was not confined to cases sharing all five exceptional features of Budějovický Budvar. Nor did it require confusion to be merely de minimis. Once honest concurrent use is established, a mark may indicate the goods or services of either user. Its guarantee of origin is then different from the guarantee associated with use by one undertaking.

4. The parties’ home-interest businesses had coexisted under Ideal Home names since 1920. Their online retail services were closely related to those established activities and were a natural extension of each business. On the deputy judge’s sustainable findings, Ideal Home had never denoted online home-interest retail services as originating from IPC alone. Media 10’s honest use of Ideal Home Show therefore left the existing guarantee of origin unchanged and did not adversely affect the mark’s essential function. Some resulting confusion was the inevitable consequence of the established concurrent use. Media 10 had not increased that confusion or encroached upon IPC’s goodwill.

5. This conclusion did not authorise either party to enter the other’s core business. Such an expansion would be different in character, might encroach upon established goodwill and might cause actionable deception. The court expressed no final conclusion because that issue was not before it.

6. For invalidity under article 4(4)(b), as implemented by section 5(4)(a) of the Trade Marks Act 1994, Media 10 had to show that, at the application date, normal and fair use by IPC for any registered service was liable to be prevented by passing off. It failed to do so. Online retailing was a natural expansion for IPC, and ordinary use of Ideal Home for that activity did not represent that the services originated exclusively from the Ideal Home Show business. The registration therefore remained valid.

• Court of Appeal (Civil Division): By [2014] EWCA Civ 1439, unanimously dismissed IPC’s appeal against the rejection of its infringement claim and Media 10’s cross-appeal against the rejection of its invalidity counterclaim.
• High Court, Intellectual Property Enterprise Court: By [2013] EWHC 3796 (IPEC), Mr John Baldwin QC, sitting as a deputy judge, dismissed both the registered trade mark infringement claim and the counterclaim for rectification.