The Court of Appeal in Match Group LLC v Muzmatch Ltd has given useful guidance on the role of honest concurrent use in trade mark infringement cases.
The decision has emphasised the importance of due diligence when launching a brand, and warns trade mark owners against not taking action against potentially infringing use.
HONEST CONCURRENT USE
OVERVIEW
‘Honest concurrent use’ typically arises in cases where two entities who use identical or highly similar signs in good faith have both traded for a sufficiently long period such that the sign in question could act as a badge of origin for the goods or services of either party.
In the above circumstances, a party may be able to rely on honest concurrent use to:
- register a mark despite another party having already used the sign;
- defeat allegations of trade mark infringement and passing off;
- counter an opposition to its application to register the sign; or
- answer an application that its mark is invalid.
IPEC DECISION
In the present case, Muzmatch Ltd and co-defendant Mr Younas (together, ‘Muzmatch’) argued that they had a defence of honest concurrent use to Match Group’s claims of trade mark infringement and passing off.
Match Group (the owners of popular dating services including Match.com, Tinder, Hinge and Plenty of Fish), had claimed that Muzmatch’s use of the brand ‘Muzmatch’ for a Muslim dating app infringed its registrations covering MATCH.COM, including one first registered in 1996, and a device mark comprising “match” together with a small heart device.
At first instance, Mr Caddick KC found trade mark infringement under sections 10(2) and 10(3) of the Trade Marks Act 1994, and also passing off, concluding that, in light of the similarity between ‘MUZMATCH’ and Match Group's trade marks, and the identical nature of the dating app services, the public would likely assume a connection between the two dating apps: specifically, that they would believe that Muzmatch was a sub-brand of Match.com, targeted at Muslim users.
Mr Caddick KC also dismissed Muzmatch’s arguments around honest concurrent use. Muzmatch had argued that they and Match had coexisted for over 10 years in the same industry, and that the public would know that the ‘match’ elements of both the ‘MUZMATCH’ sign and Match Group’s 1996 ‘MATCH.COM’ trade mark could be used to indicate the services of either party, but the judge rejected these claims because:
- the MUZMATCH sign started as infringing use: as soon as Muzmatch first used the sign in 2011, it interfered with the essential origin function of Match Group’s earlier ‘MATCH.COM’ mark, which gave rise to a likelihood of confusion, and/or took unfair advantage;
- Muzmatch continued to use the MUZMATCH sign even though they were aware that Match Group viewed the sign as infringing; and
- in the absence of estoppel or acquiescence, it would be unusual for infringing use to become honest concurrent use by the fact the defendant has continued to use the infringing sign.
Mr Caddick KC also found that honest concurrent use is not a specific defence, but that where there has been honest concurrent use, there is unlikely to have been infringement.
COURT OF APPEAL DECISION AND GUIDANCE
Muzmatch appealed the decision on various grounds, including that Mr Caddick KC had made two errors of law in rejecting the defence of honest concurrent use, by wrongly holding that honest concurrent use is only available if the use of the sign complained of:
1. was non-infringing when it first started; and
2. started before the trade mark was registered.
Giving the leading decision of the Court of Appeal, Arnold LJ also considered that there was an anterior question as to whether Mr Caddick KC was correct to decide that honest concurrent use was not a separate defence.
Arnold LJ upheld Mr Caddick KC’s decision in its entirety and dismissed Muzmatch’s above claims. In his judgment, he gave the following helpful guidance on the role of honest concurrent use in infringement cases:
1. Defendants cannot rely on honest concurrent use as a standalone defence (as there is no statutory basis for the defence in UK or EU law) but honest concurrent use is relevant to assessing whether the use of a sign infringes a registered mark.
2. The burden is on a defendant to show that, due to honest concurrent use, its use of a sign doesn’t adversely affect the functions of a claimant's trade mark.
3. Honest concurrent use can be relied on to show that there has been no trade mark infringement under sections 10(1), 10(2) and 10(3) of the TMA 1994, as well as passing off.
4. The starting point for assessing whether there has been honest concurrent use is usually the date the allegedly infringing sign is first used. As Mr Caddick KC held, it would be unusual for initially infringing use to become honest concurrent use over time, and eventually be considered non-infringing. It could do, however, if for example:
- a trade mark owner takes no action;
- there is substantial parallel trade over a significant period; and
- consumers understand that the trade mark and the sign denote different goods/services.
As such, Arnold LJ held that it is not strictly necessary for the use of the sign complained of to have started before the relevant trade mark was registered to rely on honest concurrent use (he also held that Muzmatch were incorrect to suggest Mr Caddick KC had made that finding).
5. Even if there is a small level of actual confusion between the trade mark and the sign (which is likely to be inevitable where two parties use the same or highly similar signs), if there is honest concurrent use, there may not be infringement if consumers understand that the trade mark and the sign represent different trade origins.
6. Where the use of a sign interferes with the origin function of a mark such that there is a likelihood of confusion, and/or the defendants have taken unfair advantage, there is no need to separately consider whether the defendants’ use of the sign was ‘honest’. Arnold J left the question of how ‘honesty’ is assessed open for further consideration, including whether it would be sufficient to negate dishonesty in circumstances where ((further to Henry Carr J’s decision in Victoria Plum Ltd v Victorian Plumbing Ltd [2016] EWHC 2911 (Ch), [2017] Bus)) the defendants have:
- not taken steps to exacerbate the level of confusion beyond that which is inevitable; and therefore
- not encroached on the claimant’s goodwill.
Arnold LJ did, however, comment that while a defendant’s failure to carry out a trade mark clearance search is a relevant factor to consider when assessing honesty, it is not sufficient alone to prevent a finding of honest concurrent use.
COMMENT
Arnold LJ’s findings confirm that it is likely to be difficult for defendants to rely on honest concurrent use to establish that they have not infringed a claimant’s mark.
That is particularly so when the defendant’s use of a sign is infringing when it is first used, as it will only be in highly unusual circumstances that sustained use of a sign can eventually become non-infringing and amount to honest concurrent use.
The case reinforces the best practice of carrying out comprehensive clearance searches before adopting signs similar to earlier marks, and parties are advised not to rely on being able to use sustained use of that sign as a potential defence when it interferes with an earlier registered mark.
Trade mark owners are also advised to actively monitor their portfolio for potential infringements and to take action where required, to avoid users of infringing signs from arguing that their use has become honest concurrent use by the trade mark owner’s acquiescence.
