Survey evidence: Mystery Morgan brings parrot back from the dead

This Kat's email inbox has been building up all day with excited missives about the fact that an endangered species, indeed one that was thought at one stage to be extinct, has been found lurking in a London Community Trade Mark Court. It was there that one of the jurisdiction's most rare and recondite intellectual property judges -- Mr Justice Morgan [a High Court judge since 2007 and mysteriously listed as a Patents Court judge, though he has only ever once got a mention on this blog, and even that was in a case that was really on competition law ...] -- brought to life an application to admit market survey evidence. With all regular Kats busy, in hiding or in the wrong time zone, it fell to occasional contributor and long-term Katfriend Aaron Wood (Swindell & Pearson) to step into the breach and write this post:

Unlike the famous Norwegian Blue parrot, it appears that trade mark surveys were not dead -- just sleeping!

The lord of all he surveys ...

Following the decision of the Court of Appeal for England and Wales in Interflora 2 [2013] EWCA Civ 319 [noted by the IPKat here], it had been felt in certain quarters that survey evidence no longer had a role to play in trade mark cases.  In infringement situations a survey may have been said to usurp the role of the trial judge, and in that case Lewison LJ commented:

“the general message [is] that evidence from consumers in this kind of case (i.e. trade mark infringement involving ordinary consumer goods or services) should only be admitted if it is of real value; and even then only if the value justifies the cost; and that judges should be robust gatekeepers in that respect”

The decision of 22 July 2014 in Enterprise Holdings v Europcar Group UK Limited & Another [2014] EWHC 2498 (Ch) tests this in the context of a case where the claimant seeks to adduce evidence of acquired distinctiveness, reputation and goodwill attaching to a mark.  Two of the counsel from Interflora 2 were counsel in this case: Geoffrey Hobbs QC again pitched as the erstwhile slaughterer of surveys, whilst Simon Malynicz reprised his role as counsel seeking to have the survey admitted.

Finding that the survey should be admitted, Mr Justice Morgan made a number of significant comments on the admissibility of survey evidence, as well as making findings on the validity of the survey itself.  Interested readers should read the comments on the validity of the survey, but the admissibility is of greater broad interest. On “real value” he noted the existence of OHIM’s guidelines on trade marks with a reputation, particularly the words: 

"Opinion polls and market surveys are the most suitable means of evidence for providing information about the degree of knowledge of the mark, the market share it has, or the position it occupies in the market in relation to competitive products. The probative value of opinion polls and market surveys is determined by the status and degree of independence of the entity conducting it, by the relevance and the accuracy of the information it provides, and by the reliability of the applied method."

He also commented that in Interflora 1 (Interflora Inc v Marks and Spencer plc [2012] EWCA Civ 1501 [noted by the IPKat here] Lewison L.J. had stated that different considerations from the general position on surveys apply where the issue is whether a registered mark has acquired distinctiveness.  He further noted the words of Etherton J in  D Jacobson & Sons Ltd v Globe Ltd [2008] EWHC 88 (Ch) [noted by the IPKat here] that the survey had helped on the question of whether a mark had acquired distinctiveness.

He also gave some thought as to how it might fit with other evidence to be provided:

69. Before addressing the "likely to be of real value" test derived from Interflora 1, it may be helpful to discuss the point summarised at paragraph 17(4) and 18(5) above as to the utility of a survey when the competent authority has "particular difficulty in assessing distinctive character". This question has been identified in a number of decisions of the European Court of Justice. It seems that it is envisaged that the question will be answered as part of the overall assessment made by the competent authority, rather than at an earlier gatekeeping stage. If the question is addressed as part of the overall assessment, then the competent authority will be able to take into account all of the other evidence as to acquired distinctiveness when answering the question. If the question has to be answered at an earlier gatekeeping stage, then the competent authority may be much less clear as to whether the case will turn out to be one of particular difficulty. It may be that the cases which are more likely to be of real difficulty are those where the mark in question is not a traditional trade mark.

70. In the present case, I consider that it is likely that there will be difficulty in assessing whether Enterprise's green logo has acquired distinctive character through use. Although the green logo is a traditional trade mark, some (possibly most) of its use has been as part of or in conjunction with another trade mark and the survey is designed to assist with the question whether the green logo, by itself, has acquired distinctiveness as identifying the goods or services of Enterprise.

71. So far, I have considered Europcar's criticisms of the surveys carried out, or proposed to be carried out, for Enterprise. I have held that it is likely that the surveys will be held to be valid surveys. It nonetheless remains for Enterprise to satisfy the court at this gatekeeping stage that it is likely that the surveys will be of real value at the trial.

72. My conclusion is that it is likely that the surveys will be of real value at the trial. I have already explained what is involved in the concept of a mark having a distinctive character acquired through use. I do not consider that a trial judge in this case will be able to determine that question by using his own knowledge and experience. Even if a trial judge thought that he had relevant knowledge and experience, the trial judge would wish to guard against the possibility that his view might be somewhat idiosyncratic or not fully informed. Of course, the trial judge will have evidence on the question of distinctiveness over and above the survey evidence. At the present stage, I do not have sight of that evidence. It is not possible at this stage to assess whether the survey evidence will be of real value in addition to the other evidence but, as I read the decision in Zeebox [noted by the IPKat here], I am not required to attempt to carry out that exercise.

On the question of whether the value justifies the cost, he noted that the parties had expended a substantial amount at this “gatekeeper” stage – indeed, Europcar had spent more on the gatekeeper stage than it estimated it would spend dealing with the results themselves, and the application had led to expert evidence on both sides as to the validity of the proposed surveys.  This irony was not lost on the judge, who noted that the point of the gatekeeper stage was to prevent parties incurring large cost dealing with surveys which have no inherent value.  If a party is willing to spend more than £100,000 on the gatekeeper stage when the cost of dealing with the results is less than this then there could be seen to be little concern with cost.  The judge also noted that the trial was set down for four days and has a collective legal budget of approximately £1.7M, so we might conclude that he felt this was not exactly a case without value.

The decision moves the needle back towards the position many litigators took, namely that there are instances where surveys are needed and that the cost of them is better incurred than not if it leads to a successful outcome.  It also follows the suggestion of Lewison LJ that the hard line taken in relation to surveys in “standard” trade mark infringement cases may not apply in the other situations he identified. 

In the present case the satellite litigation on the admissibility of the survey threatens to dwarf the remainder of the costs (the defendant having stated that it will appeal on admission of the survey).  As the judge suggests, where a survey may have real value it may well be worth allowing it in, with the weight and eventual value considered once all evidence is presented.  The clear suggestion is that if it turns out that the survey did not advance the case far beyond the other evidence available then there may be consequences, but that this cannot be assessed at the application stage. 

The outcome creates a risk that parties may make the request for survey evidence as a safety measure (or, worse make it not knowing the strength or availability of other evidence) –- it would seem likely that such behaviour would be penalised at the costs stage, and if opposing the admission of evidence it may be worth probing the level to which the applicant has reviewed the amount and nature of other evidence in order to provide the court with the fullest possible picture of the evidential value of the survey and to perhaps put the applicant in a position where it will be far less able to defend the cost of the exercise at a later date.

Thanks so much, Aaron (major katpat!) for your sterling efforts, and for your speed in setting your thoughts out for our benefit. 

Does this mean that every trade mark and passing off litigator in England and Wales will be rushing off to get a survey done? Not if pre-trial case management is conducted in a firm and pragmatic manner, thinks this Kat.  Will a lot of people seek to sneak survey evidence is, even where it shouldn't be? For sure, says Merpel: what can you expect of humans?