Concurrent use and enforcement of retail marks - not IDEAL

In IPC Media Ltd v Media 10 Ltd ([2013] EWHC 3796 (IPEC), December 6 2014), the Intellectual Property and Enterprise Court (formerly the Patents County Court) has held that IPC Media, publisher of Ideal Home Magazine and owner of the trademark IDEAL HOME (a retail mark for a wide range of home goods sold online, by phone or in-store) could not prevent the use of ‘Ideal Home Show Shop’ by the owner of the Ideal Home Show in respect of its new online shop.

The Ideal Home Show had used the name since 1908 and the court held that the public was used to distinguishing between the two. Any low levels of confusion had been tolerated, and even encouraged, by both parties for a significant period.

The case illustrates the problems with attempting to enforce trademark rights following long-standing concurrent use and accepting (or even, in some instances, encouraging) low levels of confusion which had, up until the online retail age, been of mutual benefit in some contexts.

The deputy judge acknowledged that his decision opened up the possibility of some confusion between the online retail businesses of the two parties, but recommended that it would be in the interests of both parties for that confusion to be kept to the minimum by "appropriate measures" such as "choice of get-up and the like".

In general terms, where there are such market overlaps (even where such overlaps have been tolerated by similarly branded businesses for any period of time), the parties would do well to consider entering into a coexistence agreement which would act to delimit the spheres of current activity for each of the parties, identify potential areas of conflict, set out procedures for dealing with any confusion in the market place and also take account of any future brand extension or new markets. Whilst the aim of formal coexistence arrangements is to allow the parties to use and develop their own brand and business and to future-proof the relationship without the need to resort to litigation, there remains the risk that the use of identical brands in similar markets will cause confusion in the minds of the relevant public which would tend to serve to undermine the distinctiveness of each party's own mark. Of course the ideal situation is therefore one where there is clear water between the activities of the parties.

The key findings of the decision are as follows:

• Double identity (infringement under Section 10(1) of the Trademarks Act 1994) - IPC Media failed to establish double identity (ie, that the defendant used the same mark in relation to the same goods), as the mark used was held to be IDEAL HOME SHOW, not the registered sign IDEAL HOME (following LTJ Diffusion and Reed).
• Concurrent use, guarantee of origin and confusion (infringement under Section 10(2) of the Trademarks Act) - although the registered trademark was for non-core aspects of the business of each party, the specification did cover areas in which both parties provided retail services in respect of home interest goods. The use of IDEAL HOME SHOW did not impair the guarantee of origin provided by IPC Media's IDEAL HOME trademark. By reason of concurrent use by both parties over many years, the guarantee of origin afforded by the mark and protected by the registration was not the same as the guarantee provided by a trademark in the normal circumstances of a single user of a mark. Thus, although there may be some confusion, that confusion is no more than may be expected by reason of concurrent trading by the parties in their core businesses using ‘Ideal Home’ and is not such as to affect the function of the IPC Media trademark more adversely than it is already affected by virtue of the long standing uses by the two separate entities.
• Reputation, blurring and dilution (infringement under Section 10(3) of the Trademarks Act): IPC Media argued that Ideal Home was a mark with a reputation and, as such, the use to which Media 10 were putting the mark could cause dilution or blurring of the brand recognition (and guarantee of origin and other functions of the mark). The court found that the reputation was principally from the use in connection with the magazine and no separate reputation had been established in connection with the retail services for which it was registered. There was a "massive overlap" with reputation for home interest goods between that relating to the magazine (IPC Media) and that relating to the shows (Media 10). The finding was that ‘Ideal Home’ did not denote the retail services of the proprietor alone and thus the Section 10(3) infringement claim did not succeed.
• Distinctiveness and prior rights - Media 10's attack on the validity of IPC Media's registration failed both under Section 3(1)(b) (devoid of distinctive character - since the mark had acquired distinctiveness) and under Section 5(4)(a) (prior rights in passing-off - since the deputy judge considered that the use of the mark for the sale of home interest goods would be "sufficiently in the middle of the spectrum" between the respective core businesses for neither party to be able to succeed against the other in a passing-off claim).

Joel Smith, Laura Deacon and Rachel Montagnon, Herbert Smith Freehills LLP, Sydney and London