Retromark: a year in trade marks

Darren Meale

From former guest Kat Darren Meale (Simmons & Simmons and IPEC DDJ) comes a very handy review of the past twelve months in trade mark litigation. Going forward, we hope to hear from Darren twice yearly with a roundup of contentious trade mark developments.

Here’s what Darren writes:

“This one is about trade marks, and lots of them. While the IPKat diligently covers as many developments in trade marks as it does in everything else, perhaps we can all be forgiven if we haven’t had the time to keep ourselves up to date. So, starting now, let my colleagues and me at Simmons & Simmons help you with that every six months. As this is the first go, we’ve doubled down and looked at the past 12 months. Not every significant case is included below: we’ve picked 12 which, for one reason or another, you might want to know about. They are listed in reverse chronological order.

1.    BENTLEY for clothing: no unfair advantage taken of Bentley Motors – not this time anyway

Bentley Motors v Bentley 1962 O-117-17 (March 2017)

Bentley 1962 (“B62”) had been selling BENTLEY branded clothing in the UK since at least 1998 (apparently with little success). It applied for a UKTM in 2008 for clothing, footwear and headgear. Bentley Motors (“Motors”) applied to invalidate this registration in 2015. It might have expected to succeed because in 2014, Motors successfully opposed an application by B62 for BENTLEY 1962 for the same goods, relying on (amongst other successful grounds) unfair advantage (decision). This time around, Motors failed. In a 53 page decision, the UKIPO’s Hearing Officer poured over the evidence and relevant case law. He noted there was a history between the parties. He criticised Motors’ proof of use evidence, meaning its likelihood of confusion (5(2)(b)) case failed. He accepted Motors’ had a reputation for cars and that it would be called to mind by B62’s use on clothing. But in one short paragraph, without much reasoning, he concluded that there would not have been an unfair advantage when the mark was applied for in 2008. The justification for the different decision this time, said the Hearing Officer, was because he had to consider an earlier time period on different evidence than the Hearing Officer in 2014. A reminder then that a given piece of litigation is resolved on the day by a judge or decision maker on the facts and evidence before him and her at that time. On another day, results may vary!

2.    Accounts of profits: CRISTAL clear when the other side doesn’t show up

Champagne Louis Roederer v J Garcia Carrion [2017] EWHC 289 (February 2017)

Benny tasting
some champagne

Most trade mark cases are heard by way of split trial. Once the parties know who is liable, settlement of any financial claims usually follows (for a whole host of reasons, not least that the cost of a quantum trial can easily exceed the value of the recompense available). As a consequence, even going back into the distant past yields few precedents of accounts of profits in trade mark cases. That said, more recently we have had some useful decisions, including Design & Display and Jack Wills. In Roederer, the defendant sold Spanish sparkling wine under the name CRISTALINO, infringing the claimant’s rights in its CRISTAL brand of champagne. Reported decisions on accounts of profits for trade mark cases (few that they are) have tended to show recovery of modest sums. The defendant here took a risky approach to defending the account: it didn’t. It neither supplied Island Records disclosure nor turned up at the hearing. That left the claimant having to put together its own evidence to prove the defendant’s lawful profits (which it chose over proving its own loss), a task made all the easier because when it came to the hearing, there was no one to challenge it. Master Bowles duly gave it the once over, but accepted the evidence and it propelled the claimant to an award of in excess of Euro 1.3 million. IPKat report here. 

3.    Careful what you consent to: Adwords and Argos

Argos Ltd v Argos Systems Inc [2017] EWHC 231 (February 2017)

Argos is a well-known UK High Street retailer. ASI is an American design company. ASI owned argos.com and did so legitimately. Argos operated from argos.co.uk. Inevitably, UK consumers visited argos.com by mistake (indeed, evidence showed the vast majority of visitors to argos.com were from the UK, and that they left the site within seconds of visiting). ASI used Google Adsense – which automates the display of adverts on a website – to display adverts at argos.com, first to the whole world but later (and with the help of geofiltering) only to non-American visitors. Argos alleged that in doing so ASI was seeking to obtain a benefit from confused UK consumers, including by displaying adverts to Argos itself and to its competitors. Argos alleged trade mark infringement and passing-off by way of the combination of a (legitimate) domain name with the adverts, but failed. So far as adverts for Argos appearing on argos.com were concerned, Argos was held to have actually consented to this in the terms of the Google Adsense programme – that was the only reason they were showing. Competitor adverts had only appeared, it was held, because of manipulation of cookies by Argos when preparing their evidence (ie, visit competitor sites, then go to argos.com, voila websites for competitors appear in the adverts). Even without these hurdles, Argos would have failed because the judge held that argos.com was not targeting the UK. Readers may recall that not all websites “target” (for example) the UK and so not all websites using another’s trade mark can infringe a trade mark in the UK. The judge held that the only part of the website which might have been targeted at UK consumers was the adverts, and that it was likely that the vast majority of the UK visitors did not read them. So, no targeting. Lesson learned: be careful what you sign up to with Google! More on this 362 paragraph epic here.

Hands off my KitKat!

4.    The KIT KAT shape trade mark – ANNULLED!?

Most recent decision: Mondelez UK Holdings & Services Ltd v EUIPO, Case T-112/13 (December 2016)

One can be forgiven for thinking that Nestle and Cadbury are always in court fighting over the Nestle’s intellectual property rights to the shape of the iconic Kit Kat chocolate bar, as it seems that the battle is written about almost every day. Today is one of those days, but the history is not quite so full. A brief timeline:

September 2015: On a referral from Mr Justice Arnold in an opposition by Cadbury to Nestlé’s UK trade mark application for a mark for the shape of the kit kat, the CJEU gives “guidance” on exactly what evidence was required to establish acquired distinctiveness of a mark. I say “guidance”, because it was so unclear some commentators reported the decision as a win for Nestle, while others reported it as a win for Cadbury. To oversimplify, the CJEU was asked whether the test was one of “recognition” or “reliance” on the part of the public. Quite what its answer really was intended to be is anyone’s guess.

January 2016: Arnold J does his best to make sense of the CJEU judgment and rules that Nestlé’s UK application has not acquired distinctive character. Application refused.

December 2016: From the perspective of Nestlé’s EU trade mark application, the EU General Court decides that the mark has not acquired distinctive character throughout the EU. However, it indicates there was enough evidence to find acquired distinctiveness in the UK – contradicting Arnold J.

April 2017: The UK Court of Appeal is due to hand down judgment in the appeal against Arnold J’s decision. IPKat here.

5.    Is a letter sent in English by a Germany lawyer for a Philippine company to an American parent company with EU subsidiaries concerning infringement of an EUTM a threat to take proceedings in the UK?

NVidia v Hardware Labs [2016] EWHC 3135 (December 2016)

This was the exam question posed here. The answer, began Mann J, was that it “is a matter of construction of the letter in question” – 10/10 if you wrote that. The claimant sued for groundless threats in the UK based on the above facts, the defendant brought an application for strike out or summary judgment of this allegation. The question is to be answered from the perspective of the reasonable person in receipt of the threat. That person, held Mann J, might well have the benefit of legal advice in an appropriate case (although that was not needed here as there were not enough legal technicalities in the letter). Having construed the letter, the judge held that it was not a threat to bring proceedings in the UK. It referred to a German subsidiary, a German website and relief under German domestic legislation. It may have sought an EU-wide undertaking for cessation of use, but that was not enough to outweigh the other factors. The case also included an interesting head-to-head by which the claimant sought a stay of its own claim and the defendant opposed it; the judge refused the stay, unconvinced as to the real reasons for the claimant’s request and questioning the litigation tactics at play. More on IPKat here. The UK law of threats is soon to be reformed, with the Intellectual Property (Unjustified Threats) Bill now very close to receiving Royal Assent, see here.

                   

6.    Plum or Plumbing, and a cheeky claim to honest concurrent use

Victoria Plum v Victorian Plumbing Ltd [2016] EWHC 2911 (November 2016)

In a matter almost asking for consumers to be confused, for 15 years two rival bathroom retailers sold their wares under the obviously similar names VICTORIA PLUM (previously VICTORIA PLUMB) and VICTORIAN PLUMBING. The claimant did not try to stop the defendant continuing to use its name, but instead sought to prevent the defendant bidding on VICTORIA PLUM(B) as a keyword on Google search, a more recent development in the parties’ long coexistence. Applying the CJEU’s judgment in Google France, Carr J held the defendant liable (prima facie) for infringement. But could the defendant rely upon the defence of “honest concurrent use”, as per the CJEU in Budvar? No, because this was not in fact a case of concurrent use by the defendant, because the defendant wasn’t using its own name in keyword advertising, it was deliberating using its rival’s name. That, held the judge, was outside the scope of the defence. Even if it was in scope, the judge found that the defendant’s use was not honest. A minor consolation for the defendant – the claimant had also bid on the defendant’s name as keywords (on a smaller scale), so a counterclaim in passing-off succeeded too. See the IPKat’s coverage here.

7.    Heritage Audio: the English courts do not have jurisdiction over some EU trade mark infringements even if they target the UK

AMS Neve v Heritage Audio [2016] EWHC 2563 (IPEC) (October 2016)

UK-based Neve made the 1073 preamplifier (a type of fancy audio equipment). Spanish-based Heritage Audio sold its own 1073 product. Neve claimed this infringed two UK registrations and an EU registration. In a preliminary hearing in the IPEC, HHJ Hacon held that the English courts had jurisdiction to hear a claim for infringement of the UK marks, but not the EU marks. This was the case notwithstanding that Heritage Audio was found to be targeting UK consumers. The distinction came down to the different jurisdiction tests for UK trade mark infringement (under the Brussels I Regulation, which looks at “the place where the harmful event occurs”) and EU trade mark infringement (under the EUTM Regulation, which looks at the “Member State in which the act of infringement has been committed”). It is not entirely easy to make sense of the distinction as applied in this case, but then the law of jurisdiction has never been the most straightforward. Quite what the future holds for the likes of Brussels I as the UK leaves the EU, one does not know… More here. 

8.    Combit v Commit – an EUTM infringed in one state is infringed EU-wide, but your remedies may be limited if not everyone is confused.

        

combit Software GmbH v Commit Business Solutions Ltd, Case,C-223/15 (September 2016)

COMBIT is confusingly similar to COMMIT for software, but not if you speak English and therefore understand the difference between the verb “to commit” and the juxtaposition of “com” (short for “computer”) and bit (as in “binary digit”). But an EUTM is a unitary right across the EU, so the argument goes that it must be infringed everywhere if it is infringed somewhere – meaning that injunctive relief should also extend to the whole of the EU. No, that last part is not quite right held the CJEU: if there is no likelihood of confusion, in particular for linguistic reasons, a mark’s essential function cannot be adversely affected and so a court must limit the territorial scope of any injunction accordingly. IPKat here.

9.    Cartier: blocking injunctions all good for trade mark infringement too

Cartier International v British Sky Broadcasting Ltd [2016] EWCA Civ 658 (July 2016)

Blocking injunctions require UK ISPs, of which most of the market is served by five providers, to block their users from accessing certain websites. They began life dealing with copyright infringing BitTorrent trackers and the like under section 97A of the Copyright, Designs and Patents Act 1988 before Richemont – owner of the CARTIER and other luxury brands – sought to grab a piece of the action to tackle trade mark infringement (here sites selling counterfeit luxury goods) by relying on the Court’s inherent power to order injunctions where it was “just and convenient” to do so (section 97A only available for copyright infringement). Richemont won at first instance and in the Court of Appeal. But the issue that saw a dissenting judgment from one Lord Justice was who should pay the costs of implementing such injunctions, in circumstances where there was no wrongdoing on the part of ISPs? Jackson and Kitchin LJJ thought it should be the ISPs, Briggs LJ thought it should be Richemont. That issue – the costs question – is now destined for the UK Supreme Court. More from the IPKat here.

10. Old McDonald had a family of marks, E-I-EUIPO

Future Enterprises Pte Ltd v EUIPO, McDonald’s International Property Co Ltd, T-518/13, EU:T:2016:389 (July 2016)

With apologies for the worst pun-laden title in recent memory, this decision of the EU General Court told us that fast-food giant McDonalds has sufficient trade mark power to monopolise the prefixes MC and MAC for marks covering food and beverages. Marks with a reputation enjoy broader (extended) protection in the EU, including from the taking of unfair advantage. In IG Communications Ltd v OHIM, Citigroup, Inc, Citibank, NA, T-301/09, EU:T:2012:473, the General Court held that the existence of a “family of marks” (ie, multiple marks with a common stem or form) can increase the risk of unfair advantage provided that the family members (at least three of them) have been used. McDonald’s deployed this principle in an invalidity action against a Singaporean coffee seller which had obtained an EUTM for MACCOFFEE, relying upon 13 MC or MAC-formative registrations. Having shown enough use of at least a handful of those marks, the General Court was sufficiently convinced that the EUIPO and its Board of Appeal were right to find a serious risk of unfair advantage, and upheld their decisions. This decision demonstrates the potential power of a family of marks: an effective monopoly in a two or three-letter prefix for which no separate registrations were cited (although McDonald’s does own at least this one). IPKat here.

11. Glee: comedy club vs TV show and the end of all series marks?

Comic Enterprises Ltd v Twentieth Century Fox Film Corporation [2016] EWCA Civ 455 (May 2016)

Comic runs four comedy clubs in the UK. Fox made the very successful Glee TV series, about an American High School glee (singing) club. A few years into its launch, Comic launched a trade mark infringement action based on a registration for a series of two device marks featuring the words THE GLEE CLUB and also relying on passing-off. It lost on passing-off and won on trade mark infringement. The first instance decision was upheld on appeal, with the crucial likelihood of confusion question being one which was “finely balanced”, to quote Kitchin LJ. As well as being an illustration of a classic trade mark battle with a host of interesting issues, the Court of Appeal was asked to consider whether marks registered in a series (which are unique to the UK and Ireland) are compatible with EU trade mark law. The Court of Appeal said yes, but Fox has secured permission to appeal this decision to the UK Supreme Court. [Disclosure: S&S acted for Fox in this case]. See the IPKat’s coverage here.

For a different angle on series marks, see this case on Cadbury’s colour purple.

12. Marussia v Manor Grand Prix: brakes slammed on F1 estoppel defence to EUTM infringement

Marussia Communications Ireland v Manor Grand Prix Racing [2016] EWHC 809 (April 2016)

There is a lot of money in F1: coming 9th out of 11 teams in one season set up the defendant, then called “Marussia” under licence from the claimant, to earn $90 million in prize money but only if it continued to race in future seasons. That was a problem because the claimant had terminated its trade mark licence. The defendant raced in 2015 using the name anyway, and the claimant sued using its EUTM. In an action for summary judgment by the claimant, the defendant failed to convince the judge that it had a defence based on implied consent, so fell back on an estoppel argument – essentially that in the circumstances of the relationship and discussions between them, the claimant should have alerted its trade mark to the defendant and in failing to do so, it gave up the right to assert it later. This relied on the principle of estoppel by acquiescence under English law. As well as doubting that an estoppel arose on the facts, the Court held that the defence itself was not available here – the EUTM Regulation was a complete code so far as EUTMs were concerned, and defences under national laws were excluded. A little more here.

A moment of reflection for this year: it is interesting to see how many of the above cases which, although UK litigation or concerning UK businesses, have a real European angle and therefore how they might have been decided differently in future years after the UK leaves the EU. We may now be entering a new chapter in trade mark litigation in the UK – let’s hope that, despite the tragedy of Brexit, we can make something good of it.

Unscientific outcome statistics concerning these cases: 50% in favour of the trade mark owner, 33% in favour of the counterparty, 17% somewhere in the middle.

If we haven’t included a case you think we should have, never fear: you can add a reference in the comments section of the online version of this post, or email me and ask me to include it next time.”