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Wednesday, 23 July 2008

eSure v Direct Line - the end of the line for brand experts?


Today the Court of Appeal delivered its judgment in eSure's application for permission to appeal against Lindsay J's decision to uphold Direct Line's opposition against its application to register a mouse on wheels. The opposition was based on a likelihood of (a) confusion and (b) unfair advantage/dilution of Direct Line's red telephone on wheels. Both marks related to insurance services.

The IPKat offers his services as an expert in all cases involving a mouse

eSure in particular questioned Lindsay J's reliance on expert evidence in establishing confusion, and also questioned his using different standards for similarity of marks for establishing confusion and dilution.

Arden LJ delivered the leading judgment, granting permission to appeal, but dismissing the appeal:

  • Lindsay J had erred. There is no threshold level of similarity between marks required under Art.5(1)(b), nor did Vedial say that there was one.Instead, it is the case that if there is no similarity at all then there can be no likelihood of confusion to be considered. However, the finding didn't affect the outcome of the case because the judge had found that the minimum threshold had been met and so she didn't make a final finding on this issue.
  • The judge had upheld the Hearing Officer's finding on similarity of marks for the purposes of s.5(3), but had overruled the Hearing Officer's finding on the same issue under s.5(2). This, eSure argued, was inconsistent. eSure further argued that the way to resolve this inconsistency was to reject the expert evidence under both subsections and so find in eSure's favour on both issues. Not so, found Arden LJ. Another way was to restore the Hearing Officer's finding under s.5(2). Contrary to Lindsay J's finding, the Hearing Officer had been entitled to reach his conclusion that there was indirect confusion (and therefore that the opposition succeeded under s.5(2)) based on his own judgment, and in the absence of additional evidence. The ECJ has left it for national courts to determine how they assess if allegations of similarity or confusion are proved. The approach in the UK is to treat what the average consumer would make of the marks and the link between them as a jury question. In the absence of a jury, it is for the judge to not only put himself in the place of an average consumer, but also to consider whether he, as a potential buyer, would have been confused. Although the relevant cases on this (e.g. GE Trade Mark) predated harmonisation, the principles were derived from the law of evidence, and so could still apply today.
  • Since the judge had been wrong to interfere with the hearing officer's decision, the hearing officer's finding that there was a likelihood of confusion was restored and so the opposition would succeed on s.5(2). Consequently, there was no need to examine the grounds of appeal under s.5(3).
  • Her Ladyship concluded with two general observations: (1) she questioned the role of expert evidence in such cases (Lindsay J had relied heavily on the evidence of a branding expert) . In particular, it would be wasteful for an expert to be called on issues where a tribunal is in a position to form its own view, and the unnecessary calling of experts could have an impact on costs; (2) she spoke strongly in favour of the practice instigated by the late Pumfrey LJ of requiring the parties to seek directions as to the scope of methodology of any consumer survey at the case management stage.

Jacob and Maurice Kay LJJ also gave concurring judgments. Both placed particular emphasis on the fact that there was absolutely no need for a branding expert to be called to give evidence on questions which could easily be settled by the judge. Jacob LJ questioned whether the expert was in fact an expert on confusion between trade marks (as opposed to on branding) and on whether it was evidence at all, or merely assertion. Maurice Kay LJ also called for the Trade Marks Registry to exclude such evidence from its hearings.

Jacob LJ also noted that this was a case which 'suffered greatly from over elaboration in both evidence and argument' where things have become complicated unnecessarily.

The IPKat reckons their Lordships are sounding a little grumpy. He reckons that he would too. Perhaps it's the Kat's imagination, but trade mark cases do seem to have been growing increasingly long over the past couple of years or so. The Kat finds this a tad surprising since, on confusion at least, the ECJ's case law in relatively clear (subject to the odd bit of fuzziness round the edges). Perhaps part of the problem is reliance on evidence that ultimately ends up not being of that much use to the court. This is expensive for the both the parties and the court system, and hopefully this judgment will curb the tendency.

One the subject on experts, the IPKat notes that the Court of Appeal particularly directed its comments on expert evidence to experts produced to testify on confusion issues. He notes that Lindsay J at first instance relied heavily on the expert's evidence in relation to s.5(3). He hopes that the same principle will apply - experts may be experts in branding, but they're unlikely to be experts in the legal question of what constitute detriment or unfair advantage.

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