Sudden outbreak of common sense? "Initial interest confusion" part of EU trade mark law, says judge

Just to show that he can do it if he wants to, specialist IP judge Mr Justice Arnold (Chancery Division, England and Wales) decided a case on Wednesday without referring so much as a single question to the Court of Justice of the European Union for a preliminary ruling.  The IPKat was a little disappointed, since it does spoil the fun of a trip to Luxembourg and back (remember: most felines sleep for 20 hours a day, so the pace of life in the tiny Duchy is just about right for them).  Apparently it was all the fault of counsel for the disputing parties, who dropped various interesting European points that their clients were pleading.  Anyway, the case in question was Och-Ziff Management Europe Ltd & Anor v Och Capital LLP & Anor [2010] EWHC 2599 (Ch).

Essentially Och-Ziff, who owned the OCH and OCH-ZIFF Community trade marks, sued Och Capital for using OCH themselves for the same financial services.  Arnold J found the marks were infringed and that there had been some passing off too. A counterclaim for a declaration of invalidity and a defence of "we're only using our own name" both failed.  The exciting bit of this very long judgment comes at paragraphs 79 to 101, where the learned judge considers something that the IPKat gets very excited about -- the doctrine of initial interest confusion, which Och-Ziff pleaded:

".... "Initial interest confusion" is an expression that derives from US trade mark law. It was succinctly defined in a resolution adopted by the International Trade Mark Association on 18 September 2006 as follows: 

"initial interest confusion is a doctrine which has been developing in U.S. trademarks cases since the 1970s, which allows for a finding of liability where a plaintiff can demonstrate that a consumer was confused by a defendant's conduct at the time of interest in a product or service, even if that initial confusion is corrected by the time of purchase." 

[After a masterly and pleasurably intelligible explanation of the doctrine, illustrated by examples and precedents drawn from US case law, the judge continued] What then is the status of initial interest confusion in European trade mark law? For this purpose, I shall define "initial interest confusion" as confusion on the part of the public as to the trade origin of the goods or services in relation to which the impugned sign has been used arising from use of the sign prior to purchase of those goods or services, and in particular confusion arising from use of the sign in advertising or promotional materials. Both counsel addressed this question from first principles as well as on authority. 

[After a masterly and pleasurably intelligible explanation of the doctrine, illustrated by cases decided under European trade mark, paying particular attention to Court of Justice rulings, the judge continued]  It again seems clear from this that there can be a likelihood of confusion within the meaning of Article 9(1)(b) [of the Community Trade Mark Regulation] at the point when a consumer views an advertisement, whether or not the advertisement leads to a sale and whether or not the consumer remains confused at the time of any such sale.

This interpretation is supported by the most recent decision in this line of cases, namely Portakabin. At [51]-[52] the Court reiterated what it had said in Die BergSpechte at [38]-[39]. It then said at [53] that the guidance it had set out at [35] was applicable by analogy. That guidance was as follows: 

"On that point the Court has also stated that, in the case where a third party's ad suggests that there is an economic link between that third party and the proprietor of the trade mark, the conclusion must be that there is an adverse effect on the function of indicating origin. Similarly, in the case where the ad, while not suggesting the existence of an economic link, is vague to such an extent on the origin of the goods or services at issue that normally informed and reasonably attentive internet users are unable to determine, on the basis of the advertising link and the commercial message attached thereto, whether the advertiser is a third party vis-à-vis the proprietor of the trade mark or, on the contrary, economically linked to that proprietor, the conclusion must also be that there is an adverse effect on that function of the trade mark (Google France and Google, paragraphs 89 and 90, and BergSpechte, paragraph 36)."

Again, it follows that there may be a likelihood of confusion as result of the advertisement.
Counsel for the Defendants was unable to cite any authority to support the proposition that initial interest confusion is not actionable under Article 9(1)(b). 

... I find the arguments of principle in favour of this conclusion advanced by counsel for Och-Ziff more compelling than those against it advanced by counsel for the Defendants. Counsel for the Defendants had no convincing answer to the point that Article 9(2) shows that there may be an infringing use of a sign even if there is no sale, in particular in an advertisement. As discussed above, this analysis is supported by the decisions in O2, Die BergSpechte and Portakabin.

Nor did he have a convincing answer to the point that confusion arising from an advertisement is capable of causing damage to the trade mark proprietor even if such confusion would be dispelled prior to any purchase. Although there will be no diversion of sales in such circumstances, there are at least two other ways in which the trade mark proprietor may be damaged. The first is that a confusing advertisement may affect the reputation of the trade marked goods or services. It is irrelevant for this purpose whether the defendant's goods or services are objectively inferior to those of the trade mark proprietor. The second is that such confusion may erode the distinctiveness of the trade mark. Both of these points were explained with characteristic lucidity and verve by Laddie J in the context of passing off by false endorsement in Irvine v Talksport Ltd [2002] EWHC 367 (Ch), [2002] 1 WLR 2355, in particular in the passages quoted below. ...".

The IPKat wholeheartedly agrees with the court's analysis which he has reproduced in outline here and he hopes that the issue is never put in doubt again.  Merpel says, why can't we have a system for referring cases to the US Supreme Court for a preliminary ruling if they involve our interpretation of US cases? Now, that would be fun.


Och aye the noo here