Nakedbus is appealing a decision that it infringed InterCity's trade mark and tried to pass itself off as its rival when it ran adverts on Google.
After a High Court fight between the long-haul bus companies, Justice Raynor Asher found Nakedbus attempted to pass its business off as InterCity's when it ran adverts on Google which would respond to searches for "InterCity' and which promoted Nakedbus buses as "inter city" in both the advertisements and on the corresponding website.
The court also found this was part of a strategy to "hook" travellers into clicking through to the Nakedbus website, using InterCity's trade mark to confuse them into thinking that Nakedbus was some sort of affiliate.
Google AdWords is a paid advertising service that uses keywords in internet searches to trigger adverts on the Google results page.
Acting InterCity chief executive, Nick Hurdle, said last month that healthy competition was good for the company and for consumers, but this wasn't a fair fight.
"This was a cynical, calculated and deliberate attempt by a competitor to leverage our trade mark and mislead customers," Hurdle said at the time.
InterCity currently has about 60 per cent of the New Zealand long distance bus business, Nakedbus accounts for 35 per cent.
Nakedbus had argued that the words "inter" and "city" were just descriptors for domestic bus services.
As part of the ruling, Justice Asher raised concerns over the reliability of evidence provided by Nakedbus and rejected their claims that this was just honest use of a descriptive word.
However, Nakedbus is now appealing that judgement, says its lawyer Matthew Harris.
Justice Asher ruled in a separate decision this month on exactly what Nakedbus could or couldn't use in its advertising.
InterCity wanted a permanent injunction restraining Nakedbus from using the "signs" Intercity, Inter City, or Inter-City, "or any sign so nearly resembling those signs as to be likely to deceive or cause confusion, or any advertising, marketing or promotional material relating to Nakedbus NZ Limited's road transportation services".
Nakedbus wanted a more "precisely worded" injunction that said it couldn't use the the Intercity signs "in any text of any advertisement displayed in response to an internet search...unless the ad is coupled with another sign or signs sufficient to distinguish the service of NakedBus from those of ICG [InterCity Group]".
It also said the injunction should apply to any web page which users click through to from ads in an internet search that includes the signs "unless the ad is coupled with another sign or signs sufficient to distinguish the services of Naked Bus" from InterCity.
Justice Asher preferred Nakedbus' submission.
"If ICG [InterCity Group] considers that Nakedbus is carrying out an infringment that goes beyond the words of the specific injunction, but which can be seen as an infringement in terms of the judgement, ICG can always apply for further relief," he said in a judgement last week.
Harris said Nakedbus would follow the terms of the injunction unless or until the appeal is successful.