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Monday, 1 August 2011

Scottish Court tells Schuh to Shush

A Shhh ...
While the Louboutin litigation against Yves Saint Laurent (herehas captured the soles of the American nation, back in Europe there is also something afoot, if news from Scotland is anything to go by.  From the Land of the Glens comes the judgment of the Glennie in the form of Schuh Limited v Shhh... Limited, decision of the Court of Session in which the IPKat's friends Susan Snedden and Gill Grassie (Maclay Murray & Spens LLP) acted for the victorious party.  Explains Susan:
"Last week, while the English courts were busy issuing copyright judgments, the Scottish Court of Session was focusing on a trade mark and passing off dispute between two shoe retailers -- Schuh Limited (the pursuer: that's the Scottish term for 'claimant') and Shhh… Limited (the defender: that's the Scottish term for 'defendant').  Shhh… successfully defended an application by Schuh for interim interdict (the Scottish term for 'injunction') which, if granted, would have prevented Shhh… trading under the “Shhh…” brand.
Background 
Schuh are a well known shoe retailer with over 75 stores in the UK. Catering for the "casual athletic and footwear" market and enjoying a core customer base of 15-24 year olds, Schuh hold a number of registered trade marks including (i) a UK word mark for SCHUH”in various classes, including footwear in Class 25, and (ii) a Community trade mark for logo comprising the word “schuh” in green lower case stylised font against a black and grey oval. Schuh claimed that their name is frequently mispronounced as “shush”. 
Shhh… is a new shoe retail business run by Steven Moffat, an internet entrepreneur (you find out more if you visit www.shhh-oohs.co.uk). Shhh… planned to open a series of “secret” boutiques in both Scotland and England, selling exclusive couture shoes to a select number of female customers. The concept behind the brand is “Shhh... it's a secret”, the boutiques being in exclusive, unobtrusive locations. Customers will be permitted entry to the boutiques by invitation or appointment only. 
Moffat began preparing to trade as Shhh… as far back as November 2010; his company had. been carrying out marketing activities in relation to the brand for some time, and a Shhh… Facebook group has already attracted over 2,300 members. 
Court proceedings 
Schuh became aware of Shhh… in May 2010. After their trade mark agents sent Moffat a letter before action, they raised proceedings for an interim interdict against Shhh… on an ex parte basis. However the judge, Lord Glennie, decided that Shhh… should have an opportunity to defend the action; the case was continued for a few days to allow Shhh... to prepare a defence. 
Schuh based their case on sections 10(2) [= similar marks, same goods + likelihood of confusion] and 10(3) [similar marks + detriment to repute or distinctive character without due cause] of the Trade Marks Act 1994, and on passing off. They also claimed that the balance of convenience favoured granting the interim interdict, on the basis that Shhh… had not yet started trading, Shhh… had had early warning of Schuh’s concerns about their trading name and damages would be impossible to quantify. Shhh… argued that the marks were not similar. In any event, there was no likelihood of confusion, unfair advantage or detriment, and no passing off. Further, the balance of convenience favoured refusing the interim interdict. 
Lord Glennie’s Decision 
Lord Glennie found against Schuh in respect of almost every aspect of its case and refused to grant the interim interdicts sought. 
First, as regards both s10(2) and s10(3), although he found the parties’ goods to be similar, he concluded that the pursuers had not made out a prima facie case that Shhh’s sign was similar to either of Schuh’s trade marks:
“Not only are they spelt differently but they give a different impression, [Schuh's] mark being closed in contrast to the open-ended expectancy suggested by the "..." at the end of the “Shhh". Aurally they sound different, even if account is taken of the frequent mispronunciation of their name adverted to by [Schuh]. Conceptually they are very different. As Mr Moffat put it, “SHHH is a secret. SCHUH is a shoe.” …I can see no reasonable prospect of [Schuh] establishing that the signs or marks should be regarded as similar.”
Schuh had not made out a prima facie case in terms of s10(2). Even if the court had been persuaded the marks were similar, "...it is difficult to see what confusion is likely to arise in the mind of the reasonably well-informed, circumspect and observant average consumer...”, having regard to the factors to be considered in the overall global assessment set out in previous authorities. 
Schuh’s claim based on s.10(3) also failed. Had the marks been found to be similar, Schuh would have failed to establish that the use by the defenders' of the mark "Shhh..." would be "detrimental to the distinctive character or repute of the pursuers' mark". The pursuers did not plead or lead any evidence of any (serious) likelihood of an alteration to consumers’ economic activity. As regards unfair advantage, Lord Glennie stated that the pursuer’s case was supported by only the “barest” of pleadings, and his findings in respect of similarity and confusion meant that it must fail. 
Very little was said by Lord Glennie in respect of Schuh’s passing off claim. Due to the reality of the absence of similarity between both marks and thus, an absence of any real likelihood of confusion, it was stated that “...the pursuers cannot show a prima facie case [of passing off] either.” 
The Kats' favourite footwear
Lord Glennie added that he would in any event have refused the interim interdict on the balance of convenience.There was very little chance of Schuh suffering any damage. In contrast, the granting of an interim interdict would have "...render[ed] [Shhh…’s] intended business stillborn" as a result of the resultant wasted expenditure on preparations to trade. Further, “...in any event, the grant or refusal of interdict in this case is likely to be the end of the matter, certainly if interdict is granted since [Shhh…’s] business will collapse” As such, even if Schuh did in fact have a prima facie case, it was “...so weak that it would be wrong to impede and risk destroying [Shhh…’s] business” by granting the interdict. 
The willingness of the court to give such a decisive judgment at a very early stage in the case is a clear sign of the Scottish courts’ proactive commercial approach to IP enforcement".
Hush Puppies from Schuh here
Shhh ... you know who here
The King's Speech here

4 comments:

HarvardLaw74 said...

A correct result by moral and legal standards. One wonders why Schuh would trouble itself to pursue such a claim other than to stifle competition. Good judges can tell when a defender (did I get that right) is acting in good faith. Curious as to whether Susan Snedden and Gill Grassie (Maclay Murray & Spens LLP) felt that the Scottish courts were a good venue for this action.

Susan Snedden said...

Hi, this is Susan and Gill. Thanks for the previous poster's feedback.

In answer to your comment, firstly yes 'defender' is the right term with 'pursuer' being the equivalent of the claimant.

On the venue point we do think that the Scottish courts are a good UK forum for this type of dispute especially where interim interdict (injunction) is possible. There are specialist IP judges in Scotland, including Lord Glennie who heard this application, and so the quality of the judgments is generally good. Interim interdicts are a particularly useful and cost-effective remedy, in all IP disputes including trade mark and passing off cases. They are applied for in IP actions fairly often, and whichever way they go they often have the effect of deciding the case once and for all at a very early stage. This gives a short sharp resolution and certainty for the businesses concerned. It also limits the potential exposure to costs. In certain circumstances they are available without notice.

From a jurisdiction point of view it makes sense to bring actions in Scotland when the defender is based in Scotland (as here) or where the harm is being mainly felt in Scotland. Indeed in this case there was exclusive jurisdiction in Scotland as there was no connection with England at all. Notably too the Court of Session in Edinburgh is a designated Community Trade Mark Court. Also, the Scottish Court of Session has jurisdiction over all UK and EU (UK) registered IP validity disputes regardless of where the parties are located. As such we do think that it is always worth bearing in mind the availability of Scotland as an alternative UK forum for all IP disputes.

Jeremy said...

If anyone is thinking of litigating an IP dispute in Scotland, there's a very helpful article on the topic (co-authored by Gill Grassie herself) for which you can check out the abstract at http://tinyurl.com/3rflx8r

Anonymous said...

One imagines that the protection available a word mark that is a real word (albeit German)would be extremely limited in any event. Arguably, the GB TM Regn. 2408794 is invalid in most respects because it is descriptive (Schuh=shoe), deceptive and/or registered for a multitude of goods for which there was clearly no bona fide intention to use. The green lettered device Mark of Community TM E7024755 also would not be infringed by a phonetic variant lacking visual similarity. Alround a good judgement on a case that should never have been brought!

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