Honest concurrent use in keyword advertising

This English High Court case concerned two well-known UK bathroom retailers, Victoria Plumb and Victorian Plumbing. The two companies had co-existed peacefully in the same market since 2001, each conducting significant amounts of their businesses online. The claimant, which actually started using "Victoria Plum" in 2011 (though nothing in the case turned on the dropping of the "b"), owned UK and EU trade mark registrations for VICTORIA PLUMB and

VictoriaPlum.com respectively, as well as a UK trade mark registration for the figurative mark below:

Despite years of co-existence, Victoria Plumb brought infringement proceedings against Victorian Plumbing, after the latter started bidding for advertising keywords which included the VICTORIA PLUM(B) mark. This, they said, constituted trade mark infringement, since the ads displayed as a result of the defendant's bidding led to increased levels of customer confusion.

The complaint was particularly directed to use of the keywords to generate two types of ads: (i) those containing VICTORIA PLUM(B) in the ad-text, and (ii) those with "Victoria(n) Plumbing" in the ad-text. The claimant did not, however, seek to prevent the defendant from continuing to use the name "Victorian Plumbing" for its underlying business.

Honest concurrent user defence

Victorian Plumbing accepted that use of the claimant's mark to generate the ads in category (i) constituted infringement, and they submitted to judgment to that extent. For category (ii), however, they relied on the defence of honest concurrent user, alleging that as the parties had honestly built up their respective businesses and reputations using confusingly similar names over many years, as a matter of law they had to live with the resulting confusion.

In considering the relevant law, the court commented that there is no provision for such a defence in the EU Trade Marks Directive or Regulation. However, "any rational system of registered trade marks has to cater for the situation where two traders have co-existed."

The court considered the relevant case-law, including Phones 4U (English Court of Appeal) and Budweiser (CJEU). Although the cases established the principle that a degree of inevitable confusion must be tolerated where two separate entities have co-existed honestly for a prolonged period, it was equally clear that "the defendant must not take steps which exacerbate the level of confusion beyond that which is inevitable and so encroach upon the claimant's goodwill."

Further, in order to be "honest", "the defendant has a duty to act fairly in relation to the interests of the trade mark proprietor."

Applying these principles to the facts of this case, the court found that the defence of honest concurrent user did not apply to the defendant's use of the claimant's mark as a keyword to generate the ads in category (ii).

This was because:

• the use complained of was use by the defendant of the claimant's marks as a keyword, not continued use of its own name
• the defendant had never in fact used the claimant's mark other than by bidding on it as a keyword, which was the subject of the complaint
• the defendant's use was not "honest", due primarily to a change in approach to its keyword bidding, which had increased very significantly between 2012 and 2016.

Finally, it is worth noting that the defendant had also pursued a counterclaim against the claimant for passing off, in relation to the latter's bidding on "Victorian Plumbing" as a keyword. Whilst the claimant's bidding activities were on a smaller scale that those of the defendant, the judge found equally against the claimant in relation to this "tit for tat" aspect of the dispute.

In short

This case is a useful reminder of the principles applicable in case of long-standing concurrent use of confusingly similar marks.

It is also interesting to see this issue considered in the context of keyword advertising.

In particular, in a situation involving long-standing use of confusingly similar marks by two parties, it is important to be aware of the perils of one party changing its behaviour in a way that upsets the delicate balance.

Case details at a glance

Jurisdiction: England and Wales
Decision level: High Court of Justice Chancery Division Intellectual Property
Parties: Victoria Plum Limited (trading ad "Victoria Plumb" and Victorian Plumbing Limited, Mark Radcliffe and Coral Phones Limited
Date: 18 November 2016
Citation: [2016] EWHC 2911 (Ch)
Full decision: http://dycip.com/victoriaplum