Trade Marks

What is the future for the honest use defence and in what scenario can a defendant successfully rely upon this defence?

March 20, 2024

In the High Court decision of Gnat and Company Ltd & Anr v West Lake East Ltd & Anr (Judge Hacon; [2022] EWHC 319 (IPEC)), Judge Hacon found a likelihood of confusion even though the businesses had been co-existing and operating concurrently for 12 years with no evidence of actual confusion. This therefore raises the question: “in what scenario can a defendant successfully rely upon the honest use defence for unregistered trade marks?”

Gnat was the owner of the above series mark and, via a licence, this mark was then used at a luxury Cantonese restaurant named "China Tang" residing at the Dorchester Hotel in Park Lane. In 2009 West Lake East opened a Chinese take-away in Barrow-in-Furness under the name "China Tang" (see above). As a result of this Gnat initiated trade mark infringement proceedings against West Lake East. In response, West Lake East relied upon the defence of honest concurrent use.

The honest concurrent use defence involves evidence being provided that the applicant has been using the trade mark in a bona fide manner and can potentially be supported if the applicant was unaware of any conflicting earlier rights. This defence was therefore relied upon as the businesses had been co-existing and operating concurrently for 12 years with no evidence of actual confusion.

Judge Hacon stated that if a large enterprise, with its own trade mark department, failed to conduct a trade mark search prior to use, they would likely not have been acting in accordance with honest practices. It was held that there was no principled reason for a different approach to be taken for smaller businesses, especially in the modern climate of easy trade mark and internet searches. Judge Hacon stated that “if a party starts to use a trading name without appropriate (legal) advice and simple searches, such use will not have been honest concurrent use” and West Lake East’s honest concurrent use defence was therefore unsuccessful.

The answer to our original question: “in what scenario would an honest use defence for an unregistered trade mark be successful?” is therefore “only if prior to using their unregistered trade mark, the defendant undertook an internet search and additionally sought competent legal advice”. This is particularly important as, in many instances, companies only obtain trade mark searches when seeking to register their brand; however, what companies should be doing is obtaining trade mark searches and competent legal advice, prior to using their unregistered trade marks. We therefore strongly urge businesses to seek professional advice from us prior to using an unregistered trade mark to ensure that if such a situation arises, such businesses are in the strongest position available. It is also worth noting that, following more recent decisions, the honest concurrent use is not seen as a specific defence to infringement, but rather a factor considered in the global assessment of infringement.