AIPPI Report: Recapping 2016's most important soft IP cases

The IPKat sitting comfortably...perhaps too comfortably.

A couple of weeks ago, AIPPI's UK group held the second of their “Are you sitting comfortably” series.  Members (and non-members) were invited to attend the (aptly comfortable) offices of Carpmaels & Ransford where Roger Wyand QC (Hogarth Chambers) regaled them with a discussion of the most important trade mark cases spanning the year from March 2016-7.   The AmeriKat was unable to attend, but the ever succinct, Steven Baldwin (A&O) went along to report for those who missed it.  Steve reports: 

"Roger, brimming with energy, covered a total of 42 cases in an hour, split across the topics of jurisdiction, procedure, the internet, remedies, Brexit/single market, estoppel, criminal offences, the definition of trade mark, series marks, similarity of marks/signs, trade mark use, construction of contracts, consent and passing off, meaning that this was not a talk for those with a wandering mind. I set out very brief overview of a handful of the many interesting cases highlighted by the speaker.

Phonographic Performance Ltd v Hagan [2016] EWHC 3076 (IPEC), HHJ Hacon (Procedure) 

This case arguably caused the most surprise in the room on the night, particularly for those who regularly litigate in the IPEC (where costs are king). HHJ Hacon held that the costs limits applicable to cases in the IPEC do not apply to a costs award made pursuant to a Claimant’s Part 36 offer. The Judge discussed the tension between the costs cap in the IPEC (set out in CPR Part 45) and Part 36 offers, whereby a Claimant who obtains a more advantageous judgment than his Part 36 offer is entitled to indemnity costs. He considered the Court of Appeal case of Broadhurst v Tan and came to the conclusion that Part 36 overrides Part 45 such that “the limits on costs in the IPEC, both stage costs and the overall cap, do not apply to an award of costs under [former] rule 36.14(3)(b).”
This obviously represents a significant change in the costs regime of the IPEC and the speaker noted that it remains to be seen how this decision will affect Part 36 offers made by a Defendant. However, there is now a clear incentive for Claimants to make reasonable Part 36 offers when litigating in the IPEC since the prospect of being on the hook for indemnity costs will be a significant deterrent for (IPEC’s generally less cash-rich) Defendants who might otherwise have tried their luck at trial. [Merpel wonders whether this decision was in part driven by a general desire to reduce the number of cases coming before an arguably overburdened IPEC].

AMS Neve v Heritage Audio [2016] EWHC 2563 (IPEC), HHJ Hacon (Jurisdiction) 

In this case, HHJ Hacon held that the UK Court has no jurisdiction in respect of an act of infringement relating to EUTMs where the act in question involves the appearance of offending signs on a Defendant’s website, even where the website is directed to the UK (amongst other Member States). Instead, jurisdiction is conferred on the courts of the Member State where the infringer is domiciled or where steps are taken to put a sign on the website. Counsel for the Claimant (Jonathan Moss, Hogarth Chambers) made the very valid argument that if the approach taken by HHJ Hacon were right, then in practice art.97(5) would provide no exception to the general rule under art.97(1) (Council Regulation (EC) No. 207/2009) that Defendants should be sued in their place of domicile. HHJ Hacon accepted the attractiveness of this submission but concluded that “in my view the [CJEU] in its judgment [in Coty Germany GmbH v First Note Perfumes NV, Case C-360/12] drew a conscious distinction between, on the one hand, the event of taking steps to put a sign on a website…and, on the other hand, the event of the display of the sign on the website. Only the courts of the place where the former event(s) take place have jurisdiction, in particular where locating the action in that place is most likely to facilitate the taking of evidence and the conduct of the proceedings for infringement of the EU Trade Mark.”

Argos Ltd v Argos Systems [2017] EWHC 231 (Ch), Deputy Judge Spearman QC (the Internet)

This case involved the US based website argos.com, not to be confused with argos.co.uk which is the website of the well-known UK based company who were the Claimants in this action (“AUL”). AUL argued, in essence, that Argos Systems (ASI)’s use of its argos.com website included a secondary ad-based business directed at the UK and that said use was an infringement of AUL’s trade marks (and also constituted passing off). AUL itself advertised on argos.com, but took exception to competitors’ adverts appearing on the same web page via the Google Adwords/Adsense advertising system. Interestingly, the speaker noted that although ASI had no customers in the UK, 90% of the traffic to its website came from people in the UK (presumably looking for argos.co.uk).

The Judge held that ASI’s site was not targeted at UK consumers and so ASI did not use the sign ARGOS within the UK (hence there could be no infringement). However, the Judge did not stop there and went on to consider, obiter, whether if the acts had been done in the UK they would have amounted to infringement or passing off. The Judge held that they would not for, inter alia, the following reasons: (i) ASI did not use the sign ARGOS in relation to goods or services which are identical to those for which AUL’s marks are registered; (ii) ASI’s use of the sign ARGOS did not affect and was not liable to affect any of the functions of AUL’s marks; (iii) ASI’s use of the sign ARGOS did not give rise to a link between the sign and AUL’s marks in the mind of the average consumer; (iv) ASI’s use of the sign ARGOS did not give rise to (a) detriment to the distinctive character of AUL’s marks, or (b) detriment to the repute of AUL’s marks, or (c) unfair advantage being taken of the distinctive character or the repute of AUL’s marks; (v) ASI’s use of the sign ARGOS was not without due cause; (vi) ASI’s use of the sign ARGOS was (a) of ASI’s own name and (b) in accordance with honest practices in commercial matters. (This case also got a mention for its length, which stands at a whopping 362 paragraphs).

Mondelez (Cadbury) v EUIPO, General Court T – 112/13 (Single Market)

This case involved Nestlé’s application for a three-dimensional EUTM covering the four finger KitKat shape. In summary, the General Court held that where an EUTM does not have inherent distinctive character, the distinctive character acquired through use of that mark must be shown throughout the territory of the EU (i.e. in all of the Member States covered by the EUTM). Proof of acquired distinctiveness may be adduced for all Member States concerned, or separately for different Member States or groups of Member States. The speaker noted however that, in his view, the decision suggests that if the evidence of acquired distinctiveness submitted does not cover part of the EU, even a part which is not substantial or consists of only one Member State, the Court will hold that it cannot be concluded that distinctive character has been acquired by use of the mark throughout the EU.

In this case Nestlé actually submitted market survey data in support of their claim to acquired distinctiveness. However, this data did not cover all of the 15 Member States covered by the EUTM (at the relevant time of the application, there were only 15 Member States in the EU). The Court therefore concluded that “although it had been established that the contested trade mark had acquired distinctive character through use in Denmark, Germany, Spain, France, Italy, the Netherlands, Austria, Finland, Sweden and the United Kingdom, the Board of Appeal could not validly conclude its examination of the distinctive character acquired by the contested trade mark throughout the European Union on the basis of the percentage of the public recognising that mark in those Member States, even if the population of those states represented almost 90% of the population of the European Union, without coming to a conclusion regarding the perception of the mark by the relevant public in, inter alia, Belgium, Ireland, Greece and Portugal and without analysing the evidence adduced in respect of those Member States”.

Mr Wyand QC noted that following this decision it is unclear how an applicant might provide evidence of acquired distinctiveness without providing survey evidence covering each Member State. Further, he noted that it may be very difficult for the applicant to provide such evidence for every Member State, particularly given that there are now 28 countries in the EU (at least until Brexit).

Jaguar Land Rover v Bombardier Recreational [2016] EWHC 3266 (Ch), (Nugee J); Combit Software, CJEU C-223/15 (Brexit/Single Market)

The Jaguar case deserves a brief mention as it is a post-Brexit referendum decision which demonstrates that the UK Courts still consider themselves to be bound by decisions of the General Court (which, as the speaker mentioned, must surely apply until the UK formally exits the EU). This will not come as a surprise to most but it is useful to have an express statement from the High Court confirming the generally held view that General Court decisions remain binding in the UK.

The Combit case can be dealt with similarly briefly (see the IPKat here for a detailed review). It was mentioned by the speaker primarily as an example of how trade marks can affect the free movement of goods/services within the Community. In this case, the CJEU held that where the use of a sign creates a likelihood of confusion with an EU trade mark in one part of the EU whilst not creating such a likelihood in another part thereof, an EU trade mark court must issue an order prohibiting the use in question for the entire area of the EU with the exception of the part in respect of which there has been found to be no likelihood of confusion. The speaker noted that, in such circumstances, an alleged infringer would be able to sell his product in some Member States, but not others. The CJEU’s rationale for this decision was not discussed on the night, but for those interested the Court noted as follows: “[where] there is no likelihood of confusion in a part of the European Union, legitimate trade arising from the use of the sign in question in that part of the European Union cannot be prohibited. As the Advocate General has observed in points 25 to 27 of his Opinion, such a prohibition would go beyond the exclusive right conferred by the EU trade mark, as that right merely permits the proprietor of that mark to protect his specific interests as such, that is to say, to ensure that the mark is able to fulfil its functions.”