Retromark Volume II: the last six months in trade marks

Darren Meale (Simmons & Simmons and IPEC DDJ) returns with the second volume of his round up of trade mark litigation. Volume I is here.

Here’s what Darren writes:

“Retromark is back, this time assessing what’s been going on in trade mark litigation since the spring. With help from my colleague Jon Sharples, here are 10 cases worth knowing about, if you don’t already.

1.     Distinctive to the MAXX: The EUTM stopping power of a Bulgarian trade mark
Nara Tekstil  v EUIPO Case T-586/15 (September 2017)

In Bulgaria, they use the Cyrillic alphabet. Terms which may not be particularly distinctive in other EU languages may not suffer the same problem before a public that reads and writes Cyrillic. So some terms will be easier to protect. But what’s the use of a Bulgarian trade mark unless you’re doing business there? Well, Bulgaria is in the EU and an EUTM can be blocked from registration by a national mark from any EU Member State. So if for some reason you didn’t have an EUTM, with a little help from Bulgaria you might still be able to stop similar marks from going on the EUTM register. In this case TK Maxx, a brand well known to many, used its Bulgarian trade mark registration for MAXX to block Nara Tekstil’s NARAMAXX EUTM application. The General Court upheld the first instance and appeal decisions of the EUIPO, effectively approving of this clever brand protection strategy. [Disclosure: colleagues at Simmons&Simmons acted on this case].

2.     Are you XKING kidding me? Making sense of trade mark conflict in the EUTM system
Continental Reifen Deutschland v Michelin Case C‑84/16 (CJEU) (July 2017)

Covered in my earlier IPKat post here, this was the CJEU’s decision to uphold a finding that a figurative trade mark for the letter X could block an EUTM application for a figurative trade mark with the letters XKING for identical goods. As I remarked in my post, decisions like this risk making it practically impossible to carry out brand clearance with any good degree of certainty. Stand back and be sensible, please EU TM system!

3.     I can’t believe it’s not coexistence! KERRYMAID infringes KERRYGOLD in Spain despite peaceful coexistence in the UK and Ireland
Ornua Co-operative Ltd v Tindale & Stanton Ltd Case C-93/16 (CJEU) (July 2017)

The Ornua Co-operative (formerly the Irish Dairy Board), owner of the KERRYGOLD marks for dairy products, brought an infringement action in Spain against the Spanish distributor of KERRYMAID margarine for use of that mark in Spain. The two brands had been sold alongside each other in the UK and Ireland for some time, without apparent issue. Relying on this, the defendant argued that in the UK and Ireland, 'Kerry' was so widely known as an Irish cattle-farming county that the emphasis would be on “GOLD” and “MAID” respectively, so there was no likelihood of confusion. In view of (a) the unitary character of an EUTM; and (b) the apparent peaceful coexistence in the UK and Ireland, the Spanish court agreed.

On appeal questions were referred to the CJEU. Consistent with its earlier ruling DHL v Chronopost (C-235/09) along with the Combit case referred to in Volume I, the CJEU churned* the issues and confirmed that, notwithstanding the unitary character of an EUTM, a mark that peacefully coexists with an EUTM in one part of the EU can still infringe that same EUTM elsewhere in the EU. As to the effect of the coexistence in the UK and Ireland on the infringement position in Spain, the CJEU opined that (a) it is legitimate to take this into account in the assessment of likelihood of confusion in Spain, but only if the market conditions and the sociocultural circumstances are not significantly different (eg, does ‘Kerry’ have the same geographical meaning in Spain as in Ireland?); and (b) such coexistence in the UK and Ireland does not amount to “due cause” permitting what would otherwise be an infringement in Spain.  *Bad puns supplied by Jon, his are whey butter than mine.

4.     The removal of the own name defence and fundamental rights – Sky v SkyKick
Sky v SkyKick [2017] EWHC 1769 (Ch) (July 2017)

Most trade mark lawyers know Sky’s reputation for pursuing action against anyone using the word SKY in their name, even SKYPE. This time around it has its sights set on US cloud-based IT services start-up SkyKick. SkyKick began a move into the EU market when it came up against Sky. The two are now battling an infringement action in the High Court. One of SkyKick’s argued defences is the own name defence. As readers will know, this defence has been removed for corporate persons as a result of last year’s EU trade mark reform. The change is effective in respect of infringements of EUTMs but not yet for UKTMs. SkyKick asked the High Court, in the guise of Birss J, for a referral to the CJEU to ask whether the abolition of the own name defence is contrary to fundamental EU Rights and is therefore invalid. The judge concluded that on the validity of the abolition, “each side has a properly arguable case on the merits”. However, things being balanced on this front, the judge could not find a sufficient reason to make a referral now – but that’s not to say one might not follow later. IPKat here. [Disclosure: Simmons&Simmons advised the Defendant on aspects of this case].

5.     You can repair BMWs George, but don’t overdo it! The spare parts defence only gets you so far
BMW v Technosport [2017] EWCA Civ 779 (June 2017)

Technosport and its owner George Agyeton repaired BMWs. They were not authorised by BMW or otherwise connected with it, they just used BMW spare parts. They were found to have infringed BMW’s trade marks by various uses of BMW’s marks, including on the Technosport website and on business cards. But in the IPEC, they were held not to have infringed for three other uses, including use of the Twitter handle @TechnosportBMW. The Court of Appeal reversed these findings, drawing distinctions between “informative” use (I repair BMWs* and use genuine BMW parts), which is permitted by the “spare parts” defence in EU trade mark law, with “misleading” use which of course isn’t (My repair service is commercially connected with BMW). A helpful discussion of where the line is and isn’t to be drawn is provided by Lord Justice Floyd.
IPKat here. *Not really, I’m an IP lawyer.

6.     Jadebay: something you may not know about Amazon listings, but probably should
Jadebay v Clarke-Coles (t/a Feel Good UK) [2017] EWHC 1400 (IPEC) (June 2017)

Feel Good listed their flagpole products in a way which made them look like Jadebay’s “Design Elements” flagpoles. Listings denoted “by DesignElements” actually sold Feel Good’s competing product because Feel Good’s were priced cheaper than Jadebay’s. What followed was (in my view) a straightforward trade mark infringement, but what is interesting is how Feel Good achieved its mischief. It transpires that any seller may use another’s listing – identified by a unique ASIN and EAN – to sell the same product as the original seller. When doing this a seller has to confirm it is selling the same product, but evidently that confirmation is not checked. By then offering a lower price, Feel Good was essentially able to displace Jadebay from the marketplace while giving the impression that they were selling the same product as Jadebay.

Good to know if you sell on Amazon, but also good to know if – like many IP lawyers – you are often called upon to review Amazon to spot infringements, collate use evidence, and so on. What you see might not be what you get! IPKat here.

7.     The KIT KAT shape trade mark – UK edition – ANNULLED!
Most recent decision: Nestlé v Cadbury [2017] EWCA Civ 358 (May 2017)

In Volume I we reported on the recent history of Nestlé and Cadbury’s battle over the shape of the iconic four-finger Kit Kat chocolate bar. Nestlé’s EU trade mark application was refused by the EU General Court at the end of 2016 because it had not acquired distinctiveness throughout the EU. However, it had, said the General Court, acquired distinctiveness in the UK.

That should have been helpful to the parallel dispute in the UK, where Nestlé were fighting to get their UK trade mark application for the shape of the chocolate bar through, having lost before the Hearing Officer and the High Court. But would the Court of Appeal follow the General Court’s lead and come out in favour of the mark? Unfortunately for Nestlé, no.

Despite millions of sales and millions of pounds of advertising plus two surveys, Nestlé was unable to persuade the Court of Appeal that the decisions made below it were wrong. Upholding the factual findings below as well as the interpretation of the law followed, Lord Justice Kitchin, who gave the leading judgment, clearly had in mind the power of a shape trade mark, and its ability to remove rival products from the market (see the citation at paragraph 79 of Jacob J (as he then was) in the 2002 case of Nestlé v Unilever). He also noted that others – including Tesco – sold four finger chocolate bars like Kit Kats. While the Court of Appeal accepted it was bound to follow the General Court on the law, it took “careful note” of the General Court’s decision on the facts as regards acquired distinctiveness in the UK, but held that it was neither binding nor did it cast doubt on the Hearing Officer’s original decision. Kitchin LJ was supported by Floyd LJ and Sir Geoffrey Vos, both of whom gave short supporting judgments with comments of their own.

Pore over the detail as much as you like, says Merpel, but if you can make sense of the reliance/recognition test dichotomy you’re a smarter cat than she. IPKat here.

8.     Parallel imports, drugs and trade marks – the great EPANUTIN scandal
Flynn Pharma Ltd v DrugsRus Ltd and another [2017] EWCA Civ 226 (April 2017)

Pfizer passed authorisation to sell its epilepsy drug EPANUTIN (phenytoin sodium) in the UK to Flynn. Flynn’s plan was to "genericise” it by debranding it and selling it by reference to its international non-proprietary name (INN). The effect was to remove it from price controls which regulate what the NHS has to pay for drugs, allowing Flynn to charge more (in fact up to 2,600% more!). The NHS had no choice but to pay this, because medical guidance recommended against switching a patient from one manufacturer’s product to another, even if the drugs involved were the same. Flynn’s drug was authorised in the UK under the INN plus its name, so PHENYTOIN SODIUM FLYNN.

The brilliantly named “DrugsRus” hoped to enter the market and compete by importing Pfizer’s product themselves from Spain. But the regulatory environment meant the only way to do this was to sell it in the UK as PHENYTOIN SODIUM FLYNN. An infringement of our TMs, said Flynn. DrugsRus denied this and argued that enforcing trade mark rights against re-branded parallel imports constituted a “disguised restriction” on trade between EU member states, contrary to Article 36 of the Treaty on the Functioning of the European Union. The High Court disagreed (IPKat here) and the Court of Appeal unanimously upheld the finding that Flynn had a legitimate interest in the enforcement of its trade mark rights against goods bearing its mark that it had not placed on the EU market and over which it had no control. DrugsRus sought permission to take this particular F-word all the way to the UK Supreme Court, but was refused in August.

The case is a fascinating insight into the genuinely interesting world of pharmaceutical regulation (no really). Interestingly, by the time the appeal was heard, Pfizer and Flynn had been fined £90m by the CMA for charging excessive prices for EPANUTIN. The Court of Appeal made reference to competition issues in its later judgment, but concluded they did not arise on the appeal.

9.     IWATCH describes smartphone and computer software, even if Apple has an “i” for the prefix
Apple Inc v Arcadia Trading Ltd [2017] EWHC 440 (March 2017)

Surely “IWATCH” does not describe computers, which are not watches, or computer software, which is also not watches? Wrong held the Hearing Officer. “I” meant internet, so an IWATCH was a smart watch with internet access, interactive functions or a health checking function. Such a product was covered by a number of the broad terms in Apple’s Class 9 UKTM specification, such as “computers” and “monitors and monitoring devices”, meaning it was not inherently distinctive for those goods. So no trade mark for those! “Computer software” was also out of the question applying the reasoning in FOURNEAUX DE FRANCE Trade Mark (O/240/02). Mr Justice Arnold in the High Court agreed.

But what about Apple’s many “i” products, wasn’t IWATCH distinctive as a result – essentially by borrowing from the distinctiveness acquired through use of names like IPOD and IPAD? This argument failed on the facts at first instance and before Arnold J on appeal, but with Apple relying on the MACCOFFEE case (reported in Vol I), the principle of law was not dismissed entirely – the judge wasn’t convinced, but declined to express a concluded view. “Families of marks” remains an interesting concept. IPKat here. Apple did win an opposition against the same mark brought by Swatch, more here.

10.  ZUMA dog food tarnishes ZUMA restaurants, and dogs don’t have an own name defence!
Azumi Ltd v Zuma's Choice Pet Products Ltd [2017] EWHC 609 (IPEC) (March 2017)

Trade mark lawyers often give gin and drain cleaner as the paradigm example of tarnishment. But dog food and posh restaurant fare will serve just as well, ruff. HHJ Melissa Clarke found there would be “unpleasant associations” between the two different products (the dog food named after the Defendant’s dog), and as well as finding tarnishment, also held that there was a likelihood of dilution too. Bark bark. Several attempts at an own name defence failed, in part due to this gem of a submission from Simon Malynicz QC: “As Mr Malynicz succinctly submits, the dog is not a party to the proceedings, nor is it a natural person or company.” Woof, woof Mr Malynicz! IPKat here.

Where are they now?

Last time around, we mentioned two Court of Appeal cases on their way to the UK Supreme Court. Things move slowly at the highest court of the land, and both are still pending – but coming soon:

Glee: the epic battle between Twentieth Century Fox and UK comedy club chain The Glee Club will determine whether or not “series” marks are compatible with EU trade mark law. The case will be heard on 2 November 2017.

Cartier: blocking injunctions are a great example of UK courts finding sensible ways to fight the endless tide of online piracy. But who pays for them? The UK Supreme Court will start thinking about this on 30 January 2018.

With trade mark law constantly presenting new and challenging points of law to think about (just look at how diverse the above cases are), we’ll undoubtedly be back in another six months for Volume III.”
Retromark Volume II: the last six months in trade marks Retromark Volume II: the last six months in trade marks Reviewed by Eleonora Rosati on Wednesday, October 11, 2017 Rating: 5

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