ELECTROCOIN: IT'S SLOTS OF FUN

Last week Geoffrey Hobbs QC, sitting as a deputy judge in the High Court, decided Electrocoin v Coinworld , an infringement case based on a number of UK and Community trade marks for the names of various slot machines and the sequence of winning symbols used by those machines. In the process of doing so, a number of important infringement issues were raised including:

1. Trade mark use: After considering BMW v Deenik, Holterhoff, Arsenal v Reed (ECJ and Court of Appeal) and R v Johnstone, he came to the conclusion that the rights conferred by trade mark registration are not affected by use other than for the purposes of distinguishing goods or services. He added that distinguishing goods and services corresponds to the role a trade mark must perform to satisfy Article 2 of Directive 89/104. The point of the infringement legislation is to stop defendants from using signs in a way which would conflict with the use of the sign by the claimant. The IPKat says, despite seemingly clear words to the contrary from the ECJ and the Court of Appeal in Arsenal v Reed, a requirement of trade mark use by the defendant is here to stay.
2. Article 5(2) and similar goods: Article 5(2) of Directive 89/104 states that its protection applies when the parties’ goods are dissimilar. However, recent ECJ judgments have found that it also applies to similar and identical goods. It was conceded in Electrocoin that the infringement provisions of the CTM Regulation had to be read in accordance with this case law, however the situation with regard to UK trade marks was less clear. Although s.10(3) (which corresponds to Article 5(2) of the Directive) has now been amended to take the case law into account, the allegedly infringing acts predated the amendment. It was argued that the pre-amendment s.10(3) could not be read in accordance with the ECJ’s rulings because it involved such a great departure from the express wording of the statute and Article 5(2) on which it is based. Geoffrey Hobbs QC rejected this approach saying he was bound to interpret s.10(3) in accordance with the relevant decisions of the ECJ. The ECJ had made it quite clear in Adidas-Salomon v Fitnessworld that any Member State which implements Article 5(2) must extend its protection to similar and identical goods. The IPKat says no real surprises there.
3. Cross-pollination: According to Geoffrey Hobbs:

“Metaphorically speaking, Article 5(2) provides a remedy for cross-pollination: the mark and sign in issue are identical or similar; use of one is liable to influence the effect of the other on people who have been expose to both; the effect is such that advantage or detriment of the kind proscribed is liable to ensue”.

The mechanism by which this happens is the establishing of a “link” between the claimant’s mark and the defendant’s sign à la Adidas v Fitnessworld. Such a link must have an effect on consumers’ economic behaviour – it’s not enough if the two parties’ marks just bring each other to mind. Geoffrey Hobbs has used this idea of cross-pollination before in a couple of his decisions on registration sitting as the Lord Chancellor’s Appointed Person. The IPKat notes that there’s no such language in the Directive or the CTM Regulation or even in the case law of the ECJ and he’s not entirely comfortable with the idea of English judges inventing seemingly superfluous and ill-defined layers of extra terminology.
4. Defences: Although the ECJ has said that Article 6(1)(b) guarantees defendants the right to use a sign descriptively, rather than as a trade mark, it has also said that the existence of aural confusion between a word mark registered in one Member State and an indication of where a product comes from in another does not automatically lead to the conclusion that the latter use is dishonest. By extension, the confusing use of a denomination can be considered to be in accordance with honest practices, as it was in Reed v Reed. Again, no major surprises here, although the IPKat notes that Geoffrey Hobbs has been a bit coy – he hasn’t come out and explicitly said that use of a mark by a defendant as a trade mark will fall within the Article 6(1)(b) defence.

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