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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Victoria Plum Ltd (t/a Victoria Plumb) v Victorian Plumbing Ltd & Ors [2016] EWHC 2911 (Ch) (18 November 2016) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2016/2911.html Cite as: [2016] EWHC 2911 (Ch), [2017] Bus LR 363, [2016] WLR(D) 613 |
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CHANCERY DIVISION
INTELLECTUAL PROPERTY
Rolls Building Fetter Lane London EC4A 1NL |
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B e f o r e :
____________________
Victoria Plum Limited(trading as " Victoria Plumb") | Claimant |
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- and - |
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(1) Victorian Plumbing Limited(2) Mark Radcliffe (3) Coral Phones Limited |
Defendants |
____________________
Michael Silverleaf QC and Tom Alkin (instructed by Gordons LLP) for the Defendants
Hearing dates: 18, 20, 21, 25 October 2016
____________________
Crown Copyright ©
| Introduction | 1 |
| The Witnesses | 18 |
| Keyword advertising/paid searches | 23 |
| History of the parties' businesses | |
| The Claimant | 30 |
| The First Defendant | 35 |
| Bidding on keywords – the law | 38 |
| Legal issue in dispute | |
| What is the use complained of? | 45 |
| A propensity for confusion in keyword advertising | 49 |
| Application to the facts | |
| Do the acts complained of satisfy the Google France test for infringement? | 52 |
| Honest concurrent user – the law | |
| Basis for the defence | 59 |
| Summary | 74 |
| The test for honesty | 75 |
| Summary | 79 |
| Application to the facts | |
| The signs complained of | 80 |
| Honesty of Use | |
| (i) A change in approach to keyword bidding by the First Defendant | 88 |
| (ii) Click through rates | 95 |
| (iii) Exacerbation of confusion | 112 |
| (iv) Additional submissions by the Defendants | 118 |
| Conclusion | 124 |
| Estoppel | 127 |
| Statutory acquiescence | 130 |
| Joint tortfeasance | 135 |
| Counterclaim for passing off | 138 |
| Conclusion | 143 |
Mr Justice Henry Carr:
Introduction
Victoria
Plumb",
but in July 2015 altered its name to "
Victoria
Plum".
It is common ground that for the purposes of this case, nothing turns on the omission of the "b" from "
Plumb".
The First Defendant has used, and continues to use, the name "
Victorian
Plumbing".
Victoria
Plum(b)
marks") which are alleged to be infringed are as follows:
i) UK Trade Mark No. 3,066,332 registered on 19th December 2014 for the words "
VICTORIA
PLUMB"
in respect of goods in classes 11 and 20 and services in class 35, filed on 29 July 2014 ("the 332 Mark");
ii) UK Trade Mark No. 2,530,488 registered on 5th February 2010 for a figurative mark including the words "
Victoria
Plumb"
in respect of goods in classes 11 and 20 and services in class 35, filed on 2 November 2009 ("the 488 Mark"); and
iii) EU Trade Mark No. 14,347,181 for the mark "
VictoriaPlum.com"
in respect of goods in classes 11, 20 and 21 and services in class 35 ("the 181 Mark").
Victoria
Plumb"
as the Claimant's case on infringement stands or falls on the basis of this registration. Although I refer collectively to the Claimant's registered trade marks, my primary focus is on the 332 Mark. The material parts of the specifications of the registered trade marks are essentially similar. The 332 Mark includes the following:
"the bringing together, for the benefit of others, of…[bathroom items]… enabling customers to conveniently view and purchase those goods… via a website."
Victoria
Plum(b)
marks by bidding on the Claimant's name (or minor variants of that name) as a keyword.
i) Bidding on the following terms as search advertising keywords ("the
Victoria
Plum(b)
keywords"):
a) "victoria
![]()
plumb"
/ "
victoriaplumb";
b) "victoria
![]()
plum"/
"
victoriaplum";
c) "victorian
![]()
plumb"
/ "
victorianplumb";
d) "victorian
![]()
plum"
/ "
victorianplum";
and
ii) Displaying advertisements on searches of those terms which include the following terms:
a) any of the terms listed in (i) above;
b) "victoria
![]()
plumbing"
/ "
victoriaplumbing";
c) "victorian
![]()
plumbing"
/ "
victorianplumbing"
(alone and in URL).
Victoria
Plum(b)
keywords, at a minimal level, in 2008. However, towards the end of 2012 the First Defendant's bidding on the
Victoria
Plum(b)
keywords increased very substantially, and has continued to increase in subsequent years. The First Defendant's advertisements presented to the public as a result of searching for the
Victoria
Plum(b)
keywords contain the signs "
Victorian
Plumbing"
and "www.
victoriaplumbing.com".
The Claimant asserts that an average consumer who types into Google the names "
Victoria
Plumb"
or "
Victoria
Plum"
is looking for, and expecting to find, advertisements for the Claimant's website. It submits that the public are being confused, to a significant degree, by advertisements for the First Defendant's websites, since the signs "
Victorian
Plumbing"
and "
Victoria
Plumbing"
are confusingly similar to the Claimant's
Victoria
Plum(b)
marks.
Victorian
Plumbing".
It submits that the acts complained of constitute a significant change of business practice by the First Defendant. By bidding on the
Victoria
Plum(b)
marks as keywords, the First Defendant is using signs identical, or confusingly similar, to those trade marks. This is an infringement, since the presentation of the First Defendant's advertisements does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the advertisements originate from "
Victoria
Plum(b)"
or an undertaking economically connected to it, or from a third party. It further claims that since late 2012, the First Defendant, with full knowledge of the similarity of its name to that of the Claimant and the likelihood of confusion, has exacerbated the inevitable, but low-level, confusion which had previously existed.
Victoria
Plumb.
These advertisements were produced by Google's "dynamic keyword insertion" service whereby Google automatically displays the search term as the main text in the paid search listing. The Defendants have accepted that this was an infringement of trade mark and have submitted to judgment, and an injunction against further infringement, on that part of the claim.
Victoria
Plum(b)
marks which contain the terms "
Victoria
Plumbing"
and/or "
Victorian
Plumb".
The First Defendant ceased using these terms in its advertisements in 2014, as explained in a letter from its solicitors dated 17th October 2016. However, the issue remains live since infringement is not admitted and no undertaking has been offered by the First Defendant not to recommence these acts.
Victorian
Plumbing,
Victorian
Plum
and
Victoria
Plumbing
are confusingly similar to the Claimant's marks. They rely upon a defence of honest concurrent use and submit as follows. The parties have traded for many years in a wide range of directly competing goods. It is self-evident that the parties' names are so similar that there is a likelihood of confusion on the part of the public between them. In spite of actual confusion, the parties have co-existed peaceably for many years, each trading, without complaint, on an increasing scale.
The Witnesses
Victoria
Plumbing"
advertisement format. Michael Silverleaf QC, who appeared on behalf of the Defendants did not criticise the evidence of Mr Walker in his written closing submissions. However, during his oral closing, he submitted that Mr Walker was convinced that confusion as a result of the First Defendant's keyword bidding was far more serious and damaging than was in fact the case, and this coloured his evidence. He further submitted that Mr Walker's evidence that the Claimant did not "keep tabs" on its competitors' products, pricing and activity was inconsistent with certain documents disclosed by the Claimant.
Victorian
Plumbing
advertisements by users who had entered the term "
Victoria
Plumb"
in their search boxes.
Keyword advertising/paid searches
History of the parties' businesses
The Claimant
Victoria
Plumb",
and since July 2015, "
Victoria
Plum".
It has always marketed its own brand of bathroom products and was the first online only own-brand bathroom retailer. It began designing its own products in 2006 and has focused on designer products at reasonable, but not "bargain basement" prices.
Victoria
Plumb"
brand. It has advertised online by bidding on search engine keywords, and in particular on its own brand and other bathroom related terms. It has also advertised extensively offline. At the outset this was primarily in lifestyle magazines but as the business grew, advertising extended to the press and radio, both national and local. In October 2012 the Claimant ran its first national television advertising campaign. By the time of Mr Walker's departure in 2016, the Claimant had spent almost £30 million in offline advertising since its establishment and in the financial year 2014/15 alone it spent over £8.5 million.
Victoria
Plumb"
achieved an unprompted customer recognition score of 15% in January 2016. Bathstore, a major bathroom retailer with high street stores, scored 14%. The First Defendant had a much lower unprompted customer recognition score of 1%. Certain of the Claimant's competitors had an unprompted recognition score of zero. For prompted awareness, where a customer is asked to select a bathroom retailer from a list,
Victoria
Plumb
scored 49%, Bathstore 48% and
Victorian
Plumbing
27%.
| Year |
Turnover |
| 2009 |
£8,177,980 |
| 2010 |
£8,994,868 |
| 2011 |
£13,688,507 |
| 2012 |
£19,145,633 |
| 2013 |
£26,236,371 |
| 2014 |
£53,785,027 |
| 2015 |
£72,339,998 |
Victoria
Plumb
business was relatively small, between about £1 million and £2 million. However, by 2006 there had been a significant increase, and sales were large enough to order a full bathroom offer from Asia, which required a sufficient volume for the factory to justify production. Turnover, by this stage, was likely to have been several million pounds.
The First Defendant
Victorian
and Edwardian bathroom fittings. The First Defendant was incorporated in September 2000 as the corporate vehicle for this business. In addition, Mark Radcliffe had set up a business selling mobile phone accessories online. This enabled him to gain expertise in setting up a website and in achieving visibility for that website online. Mark Radcliffe proposed that he set up a further website through which his father could sell his refurbished bathroom fittings. The First Defendant's website went live at the domain "www.
victorianplumbing.co.uk"
in early 2001. From about 2002 the First Defendant began selling contemporary bathroom fittings and in 2005 the business in restored pieces was moved to a separate website.
| Financial Year |
Turnover | Advertising |
| 2003/4 |
£159,578 | Not given |
| 2004/5 |
£138,208 | Not given |
| 2005/6 |
£584,031 | £61,672 |
| 2006/7 |
£706,735 | £42,027 |
| 2007/8 |
£573,235 | £31,111 |
| 2008/9 |
£644,668 | £27,172 |
| 2009/10 |
£671,464 | £21,484 |
| 2010/11 |
£1,764,831 | £97,029 |
| 2011/12 |
£4,157,285 | £254,573 |
| 2012/13 |
£8,895,755 | £1,016,921 |
| 2013/14 |
£19,205,084 | £2,677,230 |
| 2014/15 | £42,263,980 | £9,208,454 |
Bidding on keywords – the law
"50 The use of a sign identical with a trade mark constitutes use in the course of trade where it occurs in the context of commercial activity with a view to economic advantage and not as a private matter (Case C-206/01 Arsenal Football Club v Reed [2002] ECR I-10273, [2003] R.P.C. 9, para. 40; Céline, para. 17; and UDV North America, para. 44).
51 With regard, firstly, to the advertiser purchasing the referencing service and choosing as a keyword a sign identical with another's trade mark, it must be held that that advertiser is using that sign within the meaning of that case-law.
52 From the advertiser's point of view, the selection of a keyword identical with a trade mark has the object and effect of displaying an advertising link to the site on which he offers his goods or services for sale. Since the sign selected as a keyword is the means used to trigger that ad display, it cannot be disputed that the advertiser indeed uses it in the context of commercial activity and not as a private matter."
"82 The essential function of a trade mark is to guarantee the identity of the origin of the marked goods or service to the consumer or end user by enabling him to distinguish the goods or service from others which have another origin (see, to that effect, Case C-39/97 Canon Kabushiki Kaisha v Metro-Goldwyn-Meyer Inc [1998] ECR I-5507, [1999] RPC 117, para. 28, and Case C-120/04 Medion AG v Thomson Multimedia Sales Germany and Austria GmbH [2005] ECR I-8551, para. 23).
83 The question whether that function of the trade mark is adversely affected when internet users are shown, on the basis of a keyword identical with a mark, a third party's ad, such as that of a competitor of the proprietor of that mark, depends in particular on the manner in which that ad is presented.
84 The function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party (see, to that effect, Céline, para.27 and the case-law cited).
85 In such a situation, which is, moreover, characterised by the fact that the ad in question appears immediately after entry of the trade mark as a search term by the internet user concerned and is displayed at a point when the trade mark is, in its capacity as a search term, also displayed on the screen, the internet user may err as to the origin of the goods or services in question. In those circumstances, the use by the third party of the sign identical with the mark as a keyword triggering the display of that ad is liable to create the impression that there is a material link in the course of trade between the goods or services in question and the proprietor of the trade mark (see, by way of analogy, Arsenal Football Club, para.56, and Case C-245/02 Anheuser-Busch Inc v Budejovicky Budvar NP [2004] ECR I-10989, [2005] ETMR 27, para. 60).
86 Still with regard to adverse effect on the function of indicating origin, it is worthwhile noting that the need for transparency in the display of advertisements on the internet is emphasised in the European Union legislation on electronic commerce. Having regard to the interests of fair trading and consumer protection, referred to in recital 29 in the preamble to Directive 2000/31, Art.6 of that Directive lays down the rule that the natural or legal person on whose behalf a commercial communication which is part of an information society service is made must be clearly identifiable.
87 Although it thus proves to be the case that advertisers on the internet can, as appropriate, be made liable under rules governing other areas of law, such as the rules on unfair competition, the fact nonetheless remains that the allegedly unlawful use on the internet of signs identical with, or similar to, trade marks lends itself to examination from the perspective of trade-mark law. Having regard to the essential function of a trade mark, which, in the area of electronic commerce, consists in particular in enabling internet users browsing the ads displayed in response to a search relating to a specific trade mark to distinguish the goods or services of the proprietor of that mark from those which have a different origin, that proprietor must be entitled to prohibit the display of third-party ads which internet users may erroneously perceive as emanating from that proprietor.
88 It is for the national court to assess, on a case-by-case basis, whether the facts of the dispute before it indicate adverse effects, or a risk thereof, on the function of indicating origin as described in para.84 of the present judgment.
89 In the case where a third party's ad suggests that there is an economic link between that third party and the proprietor of the trade mark, the conclusion must be that there is an adverse effect on the function of indicating origin.
90 In the case where the ad, while not suggesting the existence of an economic link, is vague to such an extent on the origin of the goods or services at issue that normally informed and reasonably attentive internet users are unable to determine, on the basis of the advertising link and the commercial message attached thereto, whether the advertiser is a third party vis-à-vis the proprietor of the trade mark or, on the contrary, economically linked to that proprietor, the conclusion must also be that there is an adverse effect on that function of the trade mark."
"75 The following general points of principle emerge from this passage. First, the critical question to be answered in such a case is whether the advertisement does not enable normally informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to in the advertisement originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party.
76 Secondly, the trade mark proprietor is entitled to prevent the display of third party advertisements which such internet users may erroneously perceive as emanating from that proprietor or which suggest that there is a material link in the course of trade between the goods or services in question and the proprietor.
77 Thirdly, if the advertisement, though not suggesting an economic link, is vague as to the origin of the goods or services in question so that such internet users are unable to determine, on the basis of the advertising link and the commercial message attaching to it, whether the advertiser is a third party or, on the contrary, is economically linked to the proprietor, then this will have an adverse effect on the origin function of the trade mark."
"appears to be founded upon certain generic characteristics of advertisements of the kind in issue and a recognition by the Court of the need for transparency about the origin of the goods and services so advertised"
"143 As we have said, the Court has recognised that keyword advertising is not inherently objectionable. But it has also acknowledged that there are features of such advertising which may lead the consumer to mistake the origin of the goods or services so advertised. It has noted too the importance of transparency in the display of advertisements on the internet. In this context the Court has therefore explained that the trade mark proprietor must be entitled to prohibit third party advertisements displayed as a result of the use of the mark as a keyword if average internet users may wrongly perceive that the goods or services so advertised originate from the trade mark proprietor, or which are so vague that such users cannot determine whether they do or not. This of course means that the third party advertiser using a trade mark as a keyword must take care to ensure that his advertisements do enable average internet users to ascertain whether the goods or services originate from the trade mark proprietor or an unconnected third party. If he fails to do so, he may be found to have infringed the trade mark."
"… internet advertising using keywords which are identical to trade marks is not an inherently objectionable practice. On the contrary, its aim is, in general, to offer to internet users alternatives to the goods or services of trade mark proprietors and it is not the purpose of trade marks to protect their proprietors from fair competition"
Legal issue in dispute
What is the use complained of?
Victoria
Plumb"
and trivial variations on that sign. This constitutes use of signs identical to, or immaterially different from, the
Victoria
Plum(b)
marks. This is not use of the First Defendant's name "
Victorian
Plumbing".
Secondly, it is necessary to ask whether such use is likely adversely to affect the origin function of the Claimant's trade marks (since, in the present case, is not alleged that any other function is adversely affected). If the answer to this second question is in the affirmative, then, subject to the various defences advanced by the defendants, there is infringement. If it is answered in the negative, then there is no infringement. This does not alter the fact that the First Defendant is using the Claimant's name, rather than its own name, in the keyword bidding complained of.
A propensity for confusion in keyword advertising
i) A user who searches by reference to a brand name is likely to be looking for that brand. In this context, there is a particular propensity for confusion if the resultant advertising is vague as to origin; Google France at [85]; Interflora at [132].
ii) This explains the particular emphasis on "transparency" in the judgment of the CJEU. The reason why transparency is necessary is to protect the consumer from unclear advertising which, in context, is liable to mislead; Google France at [86] – [87]; Interflora at [143].
iii) On the other hand, bidding on trade marks as keywords, where the advertiser ensures that his advertisements enable average internet users to ascertain whether the goods or services originate from the trade mark proprietor or an unconnected third-party, cannot be objected to; Google France at [57] – [59]; Interflora at [98].
Application to the facts
Do the acts complained of satisfy the Google France test for infringement?
Victoria
Plumb"
(and immaterial variants of that mark) as a keyword. It is admitted, and I find, that by the end of 2012, and indeed prior to that date, the Claimant had established a valuable reputation and goodwill in the name "
Victoria
Plumb".
Victoria
Plum(b)
keywords are identical or confusingly similar to the
Victoria
Plum(b)
marks. The next question is whether the presentation of the First Defendant's advertisements as a result of a member of the public searching for
Victoria
Plum(b)
do not enable normally informed and reasonably attentive internet users, or enable them only with difficulty, to ascertain whether the goods or services referred to by the advertisements originate from
Victoria
Plum(b)
or an undertaking economically connected to it, or on the contrary, originate from a third party.
Victoria
Plumb"
where the resultant advertisement displayed in position 2 includes the terms "
Victoria
Plumbing"
and/or "
Victorian
Plumbing".
On occasion the First Defendant's advertisements appear in position 1 in response to such a search. There is nothing in the First Defendant's advertisements to indicate that these are not advertisements for a business of or connected with the Claimant.
Victoria
Plumb"
and "
Victorian
Plumbing"
are emphasised, and it is submitted at [45] that:
"The conclusion as a matter of principle is that these two marks of visually, orally and conceptually closely similar. Without more, in our submission, a finding that there is a likelihood of confusion amongst the public is unavoidable."
Victoria
Plum(b)
or an undertaking economically connected to it, or on the contrary, originate from a third party.
Honest concurrent user – the law
Basis for the defence
"21. In this discussion of "deception/confusion" it should be remembered that there are cases where what at first sight may look like deception and indeed will involve deception, is nonetheless justified in law. I have in mind cases of honest concurrent use and very descriptive marks. Sometimes such cases are described as "mere confusion" but they are not really – they are cases of tolerated deception or a tolerated level of deception.
22. An example of the former is the old case of Dent v Turpin (1861) 2 J&H 139. Father Dent had two clock shops, one in the City, the other in the West End. He bequeathed one to each son – which resulted in two clock businesses each called Dent. Neither could stop the other; each could stop a third party (a villain rather appropriately named Turpin) from using "Dent" for such business. A member of the public who only knew of one of the two businesses would assume the other was part of it – he would be deceived. Yet passing off would not lie for one son against the other because of the positive right of the other business. However it would lie against the third party usurper."
"Does Article 4(1)(a) of Directive 89/104 apply so as to enable the proprietor of an earlier mark to prevail even where there has been a long period of honest concurrent use of two identical trade marks for identical goods so that the guarantee of origin of the earlier mark does not mean the mark signifies the goods of the proprietor of the earlier and none other but instead signifies his goods or the goods of the other user?"
"Article 4(1)(a) of Directive 89/104 must be interpreted as meaning that a later registered trade mark is liable to be declared invalid where it is identical with an earlier trade mark, where the goods for which the trade mark was registered are identical with those for which the earlier trade mark is protected and where the use of the later trade mark has or is liable to have an adverse effect on the essential function of the trade mark which is to guarantee to consumers the origin of the goods."
"It should be stressed that the circumstances which gave rise to the dispute in the main proceedings are exceptional."
"In the light of the foregoing, the answer to the third question is that Article 4(1)(a) of Directive 89/104 must be interpreted as meaning that the proprietor of an earlier trade mark cannot obtain the cancellation of an identical later trade mark designating identical goods where there has been a long period of honest concurrent use of those two trade marks where, in circumstances such as those in the main proceedings, that use neither has nor is liable to have an adverse effect on the essential function of the trade mark which is to guarantee to consumers the origin of the goods or services."
"I do not accept that these findings are inconsistent with what I said in my first judgment. I did not hold that the level of confusion was de minimis. I said was small, not that it was negligible. The level of confusion in the earlier cases was clearly not negligible: otherwise the claims for passing off would have failed for that reason alone, not because there was defence of honest concurrent use or failure to prove goodwill. What I said is entirely consistent with the findings relied upon by [Anheuser-Busch]. Common sense prevails here. These two brands have lived side by side with large sales: the sale of Anheuser-Busch's beer are much greater than Budejovicky Budvar's but the latter are substantial. You do not have to be a genius to infer from those very facts alone that the public by and large will have got used to that. Or that there will always be some who are confused, albeit that many are not."
"So I do not think that there is any impairment of the guarantee of origin – of either side's mark. The guarantee is different given a situation of long established honest concurrent use."
"Now it is entirely true to say that the facts of the present case are different from those of Budweiser. Moreover, the circumstances of Budweiser were clearly exceptional. However, I do not understand the reasoning or guidance of the Court of Justice to be limited to only those cases which share all five characteristics of that case. To the contrary, it seems to me that the Court has made it clear that the fundamental question to be asked and answered in any particular case is whether the impugned use does or does not have an effect upon the functions of the trade mark.
Further and importantly in the present context, the Court has not ruled that honest concurrent use cannot avail a trader if the impugned use is liable to cause some confusion. Indeed, this court was required to consider that very question in deciding the ultimate outcome of that case, for Anheuser-Busch argued that, in the light of the guidance given by the Court, the doctrine could only apply where the level of confusion was de minimis. It argued that if there was a level of confusion above that, then the essential function of the trade mark relied upon would be impaired and a case of permissible honest concurrent use would not be made out."
"I respectfully agree that there may well be more than de minimis confusion in a case of honest concurrent use. No doubt many consumers will recognise that the marks are used by different businesses, but others will not. In other words, once honest concurrent use is established, the mark does not solely indicate the goods or services of just one of the users. As Sir Robin Jacob explained, in such a case the guarantee given by the mark is different."
"…is the inevitable consequence of the use by two separate entities of the same or closely similar names in relation to such similar businesses, namely the running of a show of consumer interest products and the publishing of a magazine all about such products. I am satisfied that the provision of online retail services concerning such products was an entirely natural extension of the business of each of them."
"…of course Media 10 must not take any steps to increase the level of confusion beyond that which is inevitable and so encroach onto IPC's goodwill. But the Deputy Judge was satisfied that it had not done so …."
Summary
i) Where two separate entities have co-existed for a long period, honestly using the same or closely similar names, the inevitable confusion that arises may have to be tolerated.
ii) This will be the case where the trade mark serves to indicate the goods or services of either of those entities, as opposed to one of them alone. In those circumstances, the guarantee of origin of the claimant's trade mark is not impaired by the defendant's use, because the trade mark does not denote the claimant alone.
iii) However, 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.
The test for honesty
"The possibility of a limited degree of confusion does not preclude the application of the defence, however. It all depends upon the reason for that confusion and all the other circumstances of the case"
"In this passage the Court has made clear the where the use by an advertiser of a sign identical to a trade mark as a keyword in an internet referencing service is liable to be prevented under art. 5 of the Directive then the advertiser cannot in general rely upon art. 6 as a defence, and that is so because, in such a case, its advertisement is likely to cause at least a significant section of the relevant public to establish a link between the goods or services to which it refers and the goods or services of the trade mark proprietor or persons authorised to use the trade mark"
Summary
i) The defendant has a duty to act fairly in relation to the legitimate interests of the trade mark proprietor.
ii) All circumstances must be considered when ascertaining whether or not the use by the defendant is honest, including whether the defendant can be regarded as unfairly competing with the trade mark proprietor.
iii) However, the question is not simply whether use of the sign complained of gives rise to consumer deception, as such deception may have to be tolerated. Similarly, the defendant may well be aware of the existence of such confusion, having lived with it for a considerable period.
iv) The question is whether the defendant has taken steps which exacerbate the level of confusion beyond that which is inevitable and so has encroached upon the claimant's goodwill.
v) Whether the defendant ought to be aware that such steps will exacerbate confusion is a relevant factor.
Application to the facts
The signs complained of
Victoria
Plum(b)
marks (or trivial variations thereof) by bidding on them as keywords. I do not consider that the defence can apply in these circumstances, for the following reasons.
Victoria
Plum(b)
marks for the simple reason that it has never used those marks other than by bidding on them as keywords, which is the subject of this complaint.
Victoria
Plumb"
and "
Victoria
Plum".
As in the Budweiser case, there could be no objection to registration. This cannot be correct, as the Defendants themselves recognise.
Victoria
Plum(b)
marks. Mr Radcliffe, during his cross examination, readily accepted that the First Defendant did not claim any rights over the Claimant's trade marks. He recognised that those trade marks indicated, exclusively, the Claimant and not the First Defendant. That is why the Defendants submitted to judgment in respect of advertisements displayed in response to the First Defendant's keyword bidding which contained a sign identical to the Claimant's trade mark "
Victoria
Plumb",
as is made clear by the following evidence (T2/104/6-18):
"MR PURVIS: …the reason that you took those steps was that you accept that it's wrong to put the claimant's trade mark in the text of the ad; correct?
A. I think the fact we have admitted the claim straight away proves that, yes.
Q. Because of course,Victoria
![]()
Plum
is the claimant's trade mark?
A. My Lord, theVictoria
![]()
Plum
is indeed the claimant's trade mark, a shorter version of our name that we selected in the year 2001, before the claimant.
Q. WellVictoria
![]()
Plum
exclusively means the claimant, doesn't it?
A. Yes my Lord."
"TheVictoria
![]()
Plum
is their trade mark and I know they have worked hard to build that trade mark and in that particular instance, I agree it was unfair to display that and we admitted it being wrong."
Honesty of use
(i) A change in approach to keyword bidding by the First Defendant
Victoria
Plumb"
as a keyword. Its total expenditure on such bidding in 2009 was £39; in 2010 £202; and in 2011 £469. In 2012 this sum rose to £1,053. There was then an increase in 2013 to £46,017. By 2014 this expenditure increased more than fourfold to £204,298. There was another very significant increase in 2015 to £626,175. Between January and August 2016 the First Defendant spent £465,630 on bidding on the "
Victoria
Plum(b)"
keywords.
Victoria
Plum(b)
marks as keywords also dwarfed its keyword spend on other competitors, both in terms of overall percentage spend and money.
Victoria
Plum(b)
marks exceeds the amount spent on other competitors' trade marks by a factor of about 9 to 1. Mr O'Brien fairly accepted that the data showed a change in the First Defendant's policy towards bidding on the Claimant's trade marks, evidenced by an increase in the max cost per click on those terms and a dramatic increase in expenditure (O'Brien T3/92-93).
Victoria
Plum(b)"
has risen to about 1.7 – 1.8 i.e. those advertisements generally appear in either first or second position on the SERP. The click through rate to the First Defendant's website, which I consider further below, has risen to about 18%.
Victoria
Plum(b)
trade marks and the
Victorian
Plumbing
signs. The First Defendant is also aware of the very high click through rate from internet users to its website as a result of its increased expenditure on the
Victoria
Plum(b)
keywords, as its own data shows.
(ii) Click through rates
Victoria
Plum,
and when those same advertisements appear following a search for other competitor brands on which the First Defendant has also bid as keywords. Searches for
Victoria
Plum(b)
produce a click through rate of 15 to 20% whereas searches for other competitor brands produced a click through rate of 0 to 4%. This is the case even where the average position of the First Defendant's advertisements on the SERP was higher in response to searches of other competitor brands than for
Victoria
Plum(b).
This is shown by plots prepared by Mr O'Brien at C2/7/14-16 and by Dr Hanson at paragraph 72 onwards.
Victoria
Plum(b),
are clicking through to the First Defendant's website. As shown by Mr O'Brien's plot 7, the number has risen from a negligible amount to about 50,000 consumers a month.
Victoria
Plum(b)
name is more distinctive, and more well-known, than the
Victorian
Plumbing
name. Therefore, somewhat fewer consumers click through to
Victoria
Plum(b)
as they are somewhat less likely to be confused. This is supported by Mr O'Brien's evidence at [153] where he said, in relation to this asymmetry, that:
"This may perhaps be explained by the fact that a person searching for the term [victorian
![]()
plumbing]
….is more likely to have a greater sense of the distinction between the two brands."
"In my opinion, the most logical explanation for this pattern is searcher confusion between the intent of their search (Victoria
![]()
Plum)
and the advertisement being posted (for
Victorian
![]()
Plumbing)."
Victoria
Plum(b)
was unusually high for keyword bidding on a competitor brand. This is because, in general, most internet users do not click through to a competitor brand, but rather to the website of the brand which they have entered as a search term.
Victoria
Plum(b)"
and "
Victorian
Plumbing".
He offered the following possible reasons why a user searching for "
Victoria
Plumb"
would click on a "
Victorian
Plumbing"
advertisement:
"150 It seems to me likely that this high CTR is caused by the similarity of the names 'Victoria
![]()
Plum/b'
and '
Victoria
![]()
Plumbing'.
Broadly, I think there are two possible reasons why a user searching e.g. [
victoria
![]()
plumb]
would click on a '
Victorian
![]()
Plumbing'
ad:
(1) They may not notice that the name 'Victorian
![]()
Plumbing'
is not the same as the name '
Victoria
![]()
Plumb'
and so click on the link in the mistaken belief that it says '
Victoria
![]()
Plumb'
rather than '
Victorian
![]()
Plumbing'.
I think this scenario is easier to imagine if the ad appears to the top of the paid search results. It is harder to imagine if the ad appears below a '
Victoria
![]()
Plum/b'
ad.
(2) They may notice that the name 'Victorian
![]()
Plumbing'
is not the same as the name '
Victoria
![]()
Plumb',
but click on the '
Victorian
![]()
Plumbing'
ad anyway. I can think of two possible reasons for this:
(a) The user searches [victoria
![]()
plumb]
but decides that the '
Victorian
![]()
Plumbing'
ad offers an attractive alternative to the '
Victoria
![]()
Plum/b'
ad or natural search result e.g. because both have similar names [sic] offer the same product categories.
(b) The user had intended to search for [victorian
![]()
plumbing],
had mistakenly searched [
victoria
![]()
plumb]
and then realised their mistake when presented with a '
Victorian
![]()
Plumbing'
ad. The influence of auto-complete makes this latter scenario more likely."
Victoria
Plumb
he or she is not confused and clicks on the First Defendant's
Victorian
Plumbing
link as an attractive alternative. I do not accept that this is an adequate explanation for the remarkably high click through rate which both experts have noted. If it were correct, one would expect to see a comparable click through rate when the First Defendant's advertisements were presented as a result of searches for other competitor brands. But the experts were agreed that the rates are very different.
Victoria
Plumbing
who had mistakenly entered
Victoria
Plum(b),
possibly because of Google's auto-complete function. The user then realises his or her mistake and clicks on a
Victorian
Plumbing
ad, for which he originally intended to search. I do not accept that this is an adequate explanation for the remarkably high click through rate. Mr O'Brien was asked to consider the auto-complete function as a possible explanation in a letter of instruction from the Defendants' solicitors dated 7 September 2016. That letter stated:
"Anybody searching for either "victorian
![]()
plumbing",
"
victoria
![]()
plumb"
or "
victoria
![]()
plum"
is given the option of clicking on an automatic prediction of the search term which appears in a drop-down below the search box.
On most occasions when a search is performed "victoria
![]()
plumb"
appears in the drop-down box after three or four letters of "
victoria"
or "
victorian"
have been typed.
As there is confusion between the businesses' names,Plumbing
believes that there will be consumers who are searching for "
victorian
![]()
plumbing"
(perhaps after seeing one of
Plumbing's
television advertisements) who are then confused and click on "
victoria
![]()
plumb"
names in the autocomplete drop-down menu."
Victorian
Plumbing"
as a search term. The auto-complete function only offered "
Victoria
Plum"
as a search term after the entire word "
Victoria"
had been typed, and even then, only as the sixth option in the drop-down menu. The auto-complete function produces different results for each user, depending on their search history. No doubt the Defendants' solicitors had searched for "
Victoria
Plum(b)"
and "
Victoria
Plumbing"
on several occasions, which would explain their instructions to Mr O'Brien. However, the evidence before the Court has been given by Mr O'Brien and does not suggest that the auto-complete function is a significant factor in the click through rate.
Victorian
Plumbing"
is relatively modest, and cannot explain the very high number of people who click through to the First Defendant's website, having searched for the Claimant. Mr O'Brien did not maintain that a significant proportion of users were clicking through to the First Defendant's website for this reason; (T3/118/24 -119/10):
"It would therefore seem extremely unlikely that your second explanation, that a significant proportion of that number were people who were looking for theVictorian
![]()
Plumbing
website, was in fact true?
I think in my second explanation I say that it's likely that it could happen and could be a proportion. I don't mention that it would be a significant proportion."
Victoria
Plum(b)
marks increased dramatically. The high click through rate could be attributed to an external cause, namely, greater public awareness of the First Defendant's name during its television advertising campaigns. The theory postulates that internet users, having seen the First Defendant's television advertising, are searching for the First Defendant. They mistakenly enter the Claimant's name, which Mr Silverleaf characterises as "pre-search confusion". When the advertisement for the First Defendant's website appears in the search results, the pre-search confusion disappears because they see the "
Victorian
Plumbing"
brand, for which they had been intending to search.
Plumb
Centre" when searching for
Victorian
Plumbing.
However, the data suggests similar trends in terms of increase and decrease in click through rate when the First Defendant has bid on competitor brands.
(iii) Exacerbation of confusion
Victoria
Plum(b)"
as a search term than in other contexts. He or she is looking for, and expecting to find, the Claimant's website. The First Defendant's advertisements use a very similar name and there is no indication of the absence of any connection. This gives rise to a greater likelihood of confusion than in other trading situations.
Victoria
Plum(b)
marks as keywords by very substantial amounts. I consider that this activity increased and exacerbated confusion that was otherwise inevitable.
(iv) Additional submissions by the Defendants
Victoria
Plum(b)
marks are less likely to cause confusion than in other contexts because the average consumer rarely has a chance to make a direct comparison between the marks and therefore has to rely upon an imperfect recollection of them, which increases the likelihood of confusion. In the online searches in issue in this case, the marks are seen simultaneously, making possible a direct comparison. Therefore, the Defendants submit that there is no question of exacerbation of confusion by the acts complained of.
Victoria
Plum(b)
keywords, as such position is dependent on the acts of their competitors, as well as their own acts. Therefore, it is not possible to frame proportionate injunctive relief.
Victoria
Plum(b)
keywords, to ensure that its resulting advertisements are "transparent". The First Defendant has failed to do this, and I do not believe that there will be a difficulty in framing a proportionate injunction.
Victoria(n)
Plumbing"
other than as a result of bidding on the
Victoria
Plum(b)
keywords, this can only be on the basis of honest concurrent use. Such a defence should therefore apply to the acts complained of.
Victoria
Plum(b)
marks. This only commenced on a significant scale at the end of 2012, as a result of the Defendants' change of policy to which I have referred to above. Other uses of the First Defendant's own name in other contexts are longstanding, and qualitatively different from the uses complained of.
Conclusion
Victoria
Plum(b)
keywords; the absence of an explanation by a witness with knowledge of the reasons for that decision; that the First Defendant has always known that its name was confusingly similar to the brand name; the propensity for confusion of users searching for "
Victoria
Plum(b)";
and the extensive confusion shown by the unusually high click through rates.
Victoria
Plum(b)
marks. His evidence satisfied me that he believed that this activity was necessary to ensure that customers for
Victorian
Plumbing
who experienced "pre-search confusion" reached the First Defendant's website rather than that of the Claimant. However, I have rejected that theory and I consider that it should have been obvious to the First Defendant that its change in policy would exacerbate inevitable confusion, and that a reasonable person would have appreciated this.
Estoppel
Statutory acquiescence
48. Effect of acquiescence
(1) Where the proprietor of an earlier trade mark or other earlier right has acquiesced for a continuous period of five years in the use of a registered trade mark in the United Kingdom, being aware of that use, there shall cease to be any entitlement on the basis of that earlier trade mark or other right—
(a) to apply for a declaration that the registration of the later trade mark is invalid, or
(b) to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used.
unless the registration of the later trade mark was applied for in bad faith.
(2) Where subsection (1) applies, the proprietor of the later trade mark is not entitled to oppose the use of the earlier trade mark or, as the case may be, the exploitation of the earlier right, notwithstanding that the earlier trade mark or right may no longer be invoked against his later trade mark.
Victoria
Plum(b)
marks. For the reasons set out above, the First Defendant does not have, and does not claim to have, an earlier right in "
Victoria
Plum(b)".
Victorian
Plumbing"
at the date when the Claimant commenced the acts complained of, to enable it to sue for passing off: Cadbury-Schweppes v Pub Squash Co [1981] 1 WLR 193. However, I have found that the Claimant started trading shortly after March 2001 under the name "
Victoria
Plumb".
By that date there was no evidence of any significant trade by the First Defendant. It had only commenced trading a few months earlier, and its annual turnover for 2001 was about £7000.
Joint tortfeasance
Victoria
Plumbing
ad format, although this was clearly incorrect. This shows his lack of involvement in the First Defendant's keyword advertising. The Claimant submits that because Mr Radcliffe stated in cross-examination that he took full responsibility for all actions of his staff, and had regular meetings with Mr Pascoe to discuss the success of the bidding campaign, this is sufficient to show a common design. I disagree. Mr Radcliffe was fulfilling his responsibilities as Managing Director but was not sufficiently involved in the acts complained of by the First Defendant for joint liability to be established
Counterclaim for passing off
Victorian
Plumbing"
as a keyword, so as to cause the return of sponsored links containing the text "
Victoria
Plum(b)".
They allege that if, contrary to their primary case, bidding by the First Defendant on the
Victoria
Plum(b)
marks as keywords is an infringement, then the same is true of the Claimant's keyword bidding.
Victorian
Plumbing"
to enable it to bring a passing off action against use of that name by the Claimant.
Victorian
Plumbing"
were doing so because they believed it was the First Defendant's website. I bear in mind that the click through rate is lower than in the case of the First Defendant. I have found that this indicates a somewhat lower likelihood of confusion amongst users searching for "
Victorian
Plumbing"
than amongst those searching for "
Victoria
Plum(b)".
Victorian
Plumbing"
are likely to be looking for the First Defendant's website. When presented with
Victoria
Plumb
advertisements for a business unconnected with that of the First Defendant, it seems to me that there is a propensity for confusion. There is nothing in those advertisements to indicate the absence of a connection between the parties. Some users are likely to have clicked through to the Claimant's website, and their confusion is likely to have continued. The fact that many users may not be confused is not an answer. I consider that a substantial proportion of the relevant public are likely to have been misled into believing that the Claimant is, or is connected with, the First Defendant, and that this constituted a misrepresentation by the Claimant. In the circumstances I believe that there is a likelihood of damage.
Conclusion
i) The First Defendant is liable for infringement of trade mark of the Claimant's "
Victoria
Plum(b)" marks.
ii) The Second Defendant is not jointly liable with the First Defendant for infringement of trade mark.
iii) The First Defendant's counterclaim for passing off against the Claimant is successful.
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