InterCity operates InterCity Coachlines and owns the INTERCITY registered trademark. Recently, InterCity sought interim orders restraining Nakedbus, which operates a competing bus service, from using the word "intercity" and variants, or any other names similar to INTERCITY, in any of its advertising or marketing material.

InterCity complained that Nakedbus had infringed its registered trademark and misled consumers about the relationship between the two companies. In particular, use by Nakedbus of the term "inter city" involved the use of a sign which is identical to or confusingly similar to InterCity's registered INTERCITY trademark in respect of identical or similar goods or services for which the mark is registered. InterCity also alleged that by using the phrase "inter city" as a Google keyword for online advertising, Nakedbus had breached a purported oral undertaking given in June 2009 that it would cease using the term "intercity" in any of its advertising and instead use the term "city to city".

On the breach of undertaking cause of action, InterCity failed to establish that there was a serious question to be tried. The Court preferred the evidence of Nakedbus that such an undertaking had never been given. Rather, Nakedbus had gone no further than to assure InterCity that it would not use the word "InterCity" in a manner that breached InterCity's trademark.

With regard to the purported trademark infringement, InterCity had to show that the use of the term "inter city" by Nakedbus had adversely affected, or was liable to adversely affect, the functioning of the trademark, in particular its essential function of guaranteeing to the consumers the origin of the goods.

The Court considered that it failed to do so. The registered mark was a generally descriptive word which had acquired a secondary meaning and there was nothing to prevent its use in the primary descriptive sense being "between cities". On the information available to the Court, it appeared that members of the public were likely to attribute to "inter city" its primary descriptive sense rather than understand it to refer to InterCity. Therefore, there was no risk that customers would be confused or deceived as to the origins of the services on offer, nor could the actions of Nakedbus be said to involve misleading or deceptive conduct.