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Wednesday, 26 November 2014

From Earls Court to High Court: when litigation is far from Ideal

Left to oneself and without any knowledge of law, the typical sentient human being, being of sound mind and average judgement, might be prepared to assume that, when one business has been using its name since 1908 and another has been using the same name since 1920, it would be difficult to establish nearly a century later that the use of the name by one of them might infringe the trade mark rights of the other.  However, when it comes to the extension of business activities to the internet, it is easy to see how one business might seek to use that facility as a stick with which to beat the other.  In England and Wales we have seen a couple of examples of previously acquiescent co-users of the same name coming to quite unnecessary blows. One is Reed Executive plc v Reed Business Information plc [2002] EWHC 1015 and [2002] EWHC 2772 (Ch) in which the late and much-loved Pumfrey J lamented the existence of "vanishingly small" damage in litigation that cost the parties a fortune and left them in pretty much the identical position to that before which they started suing (though a good deal the poorer). Another unfounded action was Pitman Training Ltd & another v Nominet UK & another [1997] EWHC Ch 367, in which the real dispute was between two companies that shared the name "Pitman" because they were originally the two halves of the same business.

The latest example of this malady is to be found in IPC Media Ltd v Media 10 Ltd [2014] EWCA Civ 1439, is a Court of Appeal for England and Wales ruling of Lord Dyson MR, Lord Justice Kitchin and Lord Justice Bean, which came out while this Kat was Down Under.

The Ideal Home magazine was originally published in 1920.  From around 1965 its owners, IPC, sold a range of home interest products through that magazine through special offers to its readers. In 2006 IPC secured the registration of the words IDEAL HOME as a trade mark for retail services in class 35. Later, in 2009, IPC launched an online shop, the "Ideal Home Shop". In the same year Media 10 purchased the business of the Ideal Home Show -- a popular event that had been in existence since 1908. Unsurprisingly, since they were run by different businesses, the Ideal Home Show had no connection with the Ideal Home magazine.

In 2011 Media 10 created the Ideal Home Show Plus website and, in May 2012, launched the Ideal Home Show Shop on that website. This triggered proceedings in 2012 in which IPC maintained that Media 10's activities in offering online mail order retail services under the name Ideal Home Show infringed its registered trade mark under Article 5 of Trade Mark Harmonisation Directive 2008/95 (=  the Trade Marks Act 1994 s 10). Media 10 denied infringement, counterclaiming that, in so far as the trade mark had encompassed its activities, its use was liable to be prevented by the law of passing off and its registration was thus contrary to Article 4(4) of the Directive (= section 5(4)(a) of the 1994 Act).

At trial John Baldwin QC [in a decision noted here on this weblog] dismissed both IPC's claim for infringement and Media 10's counterclaim: while there was some confusion between the businesses, it was of little practical consequence since as one was running a show and the other a magazine. What's more, he said, the sale of home interest goods by either party under the Ideal Home name was 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 [at that time Merpel wanted to know why no-one told IPC Media not to be so silly as to bring this action in the first place and why the parties couldn't sort out a sensible coexistence agreement for their mutual benefit. To her this looked like an attempt to use the court as a convenient forum for venting a bit of spleen].

Undeterred by Merpel's comment, IPC appealed and Media 10 cross-appealed.

IPC's appeal turned on whether the use by Media 10 of the name Ideal Home Show in relation to internet retail services was liable to have an adverse effect upon the functions of its registered trade mark, in the light of the very many years during which the words Ideal Home had been used in connection with the parties' respective businesses.

Media 10's cross-appeal turned on whether, in his assessment of the attack on the IDEAL HOME mark, the judge had been required to consider a notional use of the trade mark separate and distinct from the context of the Ideal Home magazine.

As Merpel predicted, both the appeal and the cross-appeal were very properly dismissed. Kitchin LJ delivered judgment for the court and there were no great surprises:

IPC's appeal

* the trial judge was entitled to make the findings that he did, and to reject the infringement claim. The confusion that occurred while the parties just ran a show and a magazine respectively had been more in the nature of an administrative inconvenience. There was indeed a possibility of some confusion between the parties' online retail businesses, but that was the inevitable consequence of the use by two separate entities of the same or closely similar names in relation to such similar businesses.


Elvis's Ideal Home ...
* IPC's business was run on a scale and in a manner that didn't generate any reputation or goodwill separate or in any way different from the enormous reputation which the parties had enjoyed in the name Ideal Home as a result of their respective core activities. Consequently, when used in relation to online retail services, the words "Ideal Home" denoted what they had always denoted, sending out a message that those were the services of the entities or entity responsible for the show and the magazine. The likelihood of confusion and the nature of that confusion were just the same as they would have been had the parties begun to offer such retail services at exactly the same time. This was therefore one of those rare cases in which the allegedly infringing use of the mark was honest. It had not, and would not have, an adverse effect upon the essential function of the registered trade mark.

Media 10's cross appeal

* Media 10 totally failed to establish that normal and fair use of IPC's IDEAL HOME mark for online retail services could ever be prevented by an action for passing off -- and the judge had been right to say so.

* the expansion of IPC's business into the provision of online retail services was an entirely natural step for it to take, and the use of the IDEAL HOME trade mark for such services had never denoted that they were those of the entity responsible for the Ideal Home Show and no-one else. Indeed, in the context of home interest services, the name "Ideal Home" had always signified the business of the show or the magazine, or both of them.

Some folk, including this Kat, have argued that mediation is the best way forward when seeking to resolve disputes of this nature, where long-standing businesses have activities that cast shadows over one another's sphere of interest. Mediation doesn't always work, particularly since it may depend upon the common sense, good judgement and ability to visualise a shared future. In cases like this, not to mention Reed v Reed and Pitman v Nominet, Merpel would like to see the party initiating the proceedings take some sort of sanity check, and/or be made to issue a statement to shareholders, explaining what it was trying to do, and why. That might stop some of these disputes getting to trial, or beyond.

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