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Tuesday, 2 January 2007

FREEWHEELING DILUTION DECISION


The IPKat brings news of a lengthy but important decision on dilution from the UK Trade Marks Registry. Esure applied to register the image of a computer mouse with eyes and wheels for insurance services in Class 36. Direct Line (DL) opposed the application based on its earlier, much used telephone with wheels, registered in the same class. The evidence demonstrated that one of the reasons for esure’s choice of mark was to ‘make a dig’ at DL. To complicate matters, DL also began using a mouse on wheels.

Mr Hearing Officer James allowed the opposition under both s.5(2) (confusion) and s.5(3) (dilution):

* The survey evidence conducted by DL was of no assistance, since DL had begun to use and promote its own mouse on wheels since the application had been made, and this may have prejudiced the survey results.

* The threshold level of similarity which will cause a tribunal to continue to consider the other aspects of ss5(2) and (3) is where there is any visual, aural or conceptual similarity between the two marks which is likely to be recognised as such by the average consumer. Here this degree of similar was present as both marks had the unusual juxtaposition of wheels attached to electronic communication devices. However, it remained to be seen whether there was sufficient similarity to lead to one of the results specified in ss 5(2) or (3). [The IPKat reckons that, as a matter of theory, this is correct, thanks to the global appreciation approach. In practice though, one should be able to find at least some similarity between many marks, particularly those where their owners have decided legal action is worthwhile. This will limit the extent to which similarity of marks can act as a filter.]
* The objection under s.5(2) succeeded. Normal and fair use of esure’s mark would include use in the colour red. The use of electronic communication devices in red with wheels was strongly associated with DL and so normal and fair use of esure’s mark would lead to indirect confusion between the two marks.

* For the purposes of s.5(3), the later user (applicant’s) mark must, on the balance of probabilities, have one of the effects mentioned in the section. This is to take into account the fact that real, as opposed to theoretical, effects are necessary.

* There is no head of damage under s.5(3) that encompasses ‘fettering’, i.e. reducing the earlier user’s ability to further exploit the commercial value of the earlier mark. This is because trade mark registration only protects existing rights, but not future uses that the earlier user would have like to have made or registered. [The IPKat says that this is an important theoretical principle, underlying the extent of trade mark protection.]

* The marks were similar enough to cause an average consumer to make a link between them, for the same reasons as were noted for the purposes of the s.5(2) assessment. This was heightened by the fact that esure’s advertising campaign was meant to ‘have a dig’ at DL, and the use was on identical services.

* esure’s use created a link that was parasitic in nature, and thus unfair. In ‘having a dig’ at DL, esure’s campaign brought DL’s mark to mind in a way that afforded esure a commercial advantage. This advantage was subsequently reinforced by esure’s investing in its mark.

* Although it is not possible to provide hard evidence of dilution by blurring until after it has occurred, such harm can be inferred from the facts and actual evidence of the strength of the earlier mark and similarity between the two marks. The exclusiveness of the earlier mark will be particularly important. Here, esure’s mark would cause there to be two marks on the market consisting of the unusual juxtaposition of wheels attached to a communication device. This would reduce the certainty with which the public could associate such an image with DL and there would be nothing to stop other users from making use of such an image. [The IPKat isn’t entirely happy with the first-mover advantage approach – because the earlier user got there first, he gets to ‘monopolise’ the concept of communications devices with wheels]
esure's Mister Mouse - successor to the mouse on wheels, and no friend of the IPKat

* There was no detriment to distinctive character by virtue of the fact that DL might lose the means to control its reputation with the public since there was nothing to suggest that esure’s reputation as an insurer would reverberate negatively on DL. [The IPKat thinks this is right – otherwise every case would be a tarnishment case]

* There could be no finding of due cause based on a comparative advertising argument. Although the Comparative Advertising Directive allows comparisons between traders’ goods using the earlier mark, it does not allow competitors to incorporate distinctive features of earlier trade marks into their own marks. [The IPKat agrees].
Procedurally, the IPKat is a bit uncomfortable with the fact that this opposition to a single mark in a single class involved a three-day hearing, three silks, one junior counsel, two expert witness and 4 thousand questionnaires and resulted in a 44 page decision.

2 comments:

Anonymous said...

Fair comment from the IPKAT. Taking a step back, this amounts to the legal protection for the concept of a phone on wheels.

Interesting how findings under section 5(2) impact on the dilution provision - 5(3).

Ilanah said...

Actually, it's wider than that - legal protection for seemingly any communication device on wheel.

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