Retromark Volume III: the last six months in trade marks

Following Volumes I and II and the conference which took place in March, Darren Meale of Simmons & Simmons presents his third volume of the keenly awaited Retromark trade mark litigation round up.

Here’s what Darren writes:

“Six months have passed already. Here we go again with a race through some, but by no means all, of the most significant trade mark cases since the Autumn. Don’t be too upset if your case hasn’t made it – there were some tough choices.

1.    KIT KAT is back as the Advocate General gives his two fingerstwo cents
Nestlé v Mondelez v EUIPO Joined Cases C84/17 P, C85/17 P and C95/17 P (April 2018)

In Volume II we reported on Nestlé’s loss of its UK shape mark for the four finger Kit Kat chocolate bar. This followed the loss of the equivalent EU registration following the General Court’s 2016 decision. The EU proceedings are not done, because Nestlé is off to the CJEU. We now have the Advocate General’s opinion. Nestlé lost at the EU level because although the General Court felt the Kit Kat shape had acquired distinctiveness in some countries (including the UK, although the UK Court of Appeal disagreed), there was not sufficient evidence that it had done so across the 28 EU Member States (in particular in Belgium, Ireland, Greece and Portugal). The Advocate General’s view is that the General Court’s analysis of the evidence Nestlé relied upon was sound. So, he says, the CJEU should dismiss Nestlé’s appeal. We’ll be waiting a little while to see if the CJEU agrees. See The Guardian for the mainstream press’s take.

There’s no sign of a further appeal on the UK mark to the UK Supreme Court – so that looks like it is done. Acquired distinctiveness in the EU is hard. Even for the deepest pockets, proving distinctiveness in 28 countries is an awful lot of work. Nevertheless, according to the EUIPO register there are more than 80 EUTM registrations for 3D shape marks which have acquired distinctiveness, including this fellow.

2.    A PI for FI on LDNR
Frank Industries v Nike [2018] EWCA Civ 497 (Court of Appeal) (March 2018) (not on Bailii)

I’m told that back in the day, preliminary injunctions in trade mark cases were two a penny. Nowadays, they are often considered too expensive or too risky (because of the requirement of a cross undertaking as to damages) and accordingly rare. So well done Frank Industries, owner of a registration for LDNR – a women’s activewear brand – for taking on Nike over its use of the same mark in a high profile advertising campaign. It obtained an injunction which covered Nike’s social media feeds and accounts, including Twitter, Facebook, Instagram and YouTube. In an appeal, Nike was successful in watering down the impact of the injunction, so it did not need to delete tweets or delete a YouTube video provided it retitled it and blurred the use LDNR in it, and so it could “archive” rather than delete Instagram posts. The key here was that the original injunction would have resulted in the permanent loss of aspects of the social media posts, including comments, shares and likes – elements on which the Court of Appeal was persuaded to give some significant importance (and perhaps it is these things in which the real value of social media relies). IPKat here.

3.    A profoundly significant CJEU reference in Sky’s latest litigation
Sky v SkyKick [2018] EWHC 155 (February 2018)

If there is one thing certain in trade marks, it is that if yours has the word SKY in it, you’ll be getting a letter from Sky, the UK telecommunications giant. In this case it is the turn of cloud IT services provider SkyKick. Mr Justice Arnold’s decision was that Sky has won its infringement claim – Sky’s registrations are confusingly similar to SKYKICK – subject to the validity of those registrations. SkyKick says they are invalid, and Arnold J has asked the CJEU to opine. SkyKick says they are invalid for several reasons, essentially because Sky has a habit of overclaiming in its specifications for too many goods and services which are either defined with insufficient clarity (for example, says SkyKick, “computer software”) or, because Sky has no intention to use its marks for them, were filed in bad faith. SkyKick’s allegations raise some really fascinating issues and the impact of the CJEU’s decision could have far-reaching consequences for all of us. IPKat here. The final form of questions to the CJEU is set out in a follow-up judgment dated 27 April here (I also covered this case in Volume II, and noted that for transparency that S&S previously advised SkyKick on aspects of this case). An example Sky EUTM which, like other Sky registrations, covers everything from “wax for skis” to “bullet-proof waistcoats”, can be found here.

4.    Swap the non-distinctive words and add a house mark: not enough to avoid conflict
WEALTHSMART v UBS SMARTWEALTH O/094/18 UK opposition (February 2018)

For those involved in brand clearance, this is an illustration of the state of the Thomson Life principle in action before the UKIPO. Take two arguably descriptive words and combine them with a house mark (in this case UBS, the investment bank) and find yourself conflicting with those same two arguably descriptive words placed the other way around. In my view, this case goes too far. It over protects a mark of limited distinctiveness (WEALTHSMART) by taking the Thomson Life principle even further than Arnold J did in Aveda. Things have gone too far, and it is decisions like this which make clearing new brands so hard. I wonder whether WEALTHSMART is one of those marks to be debated alongside the legendary BABY-DRY and DOUBLEMINT?

5.    Where is the infringement occurring? An important case on jurisdiction and online infringement
AMS Neve v Heritage Audio [2018] EWCA Civ 86 (Court of Appeal) (February 2018)

I covered the IPEC’s decision on this in Volume I. HHJ Hacon ruled that Neve could not run an infringement case in the UK based on an EUTM, but could relying upon its UKTM. The distinction came down to the different jurisdiction tests for UK trade mark infringement (under the Brussels I Regulation) and EU trade mark infringement (under the EUTM Regulation), notwithstanding the judge’s view that the defendant’s website was arguably targeting UK consumers. The Court of Appeal took a look at the issues and thought them sufficiently complex to refer them to the CJEU. Lord Justice Kitchin ran through jurisprudence including the CJEU’s decisions in Pammer (2010), L'Oréal v eBay (2011), and Nintendo (September 2017) along with the German Supreme Court’s Parfummarken (November 2017). Parfummarken applied Nintendo but Kitchin LJ respectfully expressed doubt that it did so correctly, pointing to the potential for acts of infringement online to escape liability by falling between the cracks of two potential jurisdictions. Let’s see what the CJEU has to say.

6.    The Red Sole 2: Szpunar’s back
Christian Louboutin v Van Haren Case C‑163/16 (February 2018)

I debated whether or not to include this – Advocate General opinions aren’t the final word, and the CJEU does not always follow them. But I’ve included Kit Kat at the top, and this is undoubtedly one of most talked about cases in the past six months. It is also very well covered by Eleonora here, meaning I need only give the briefest summary. The case is notable not just because it concerns the very unusual “red sole” trade mark (is it a colour? Is it a shape? It is a coloured shape?) but, because having given one opinion, AG Szpunar was asked to give a second when the case was moved to the CJEU’s Grand Chamber, for a final decision to be given by a massive 13 judges (I meant that’s a lot of judges, I’m not suggesting that they’ve all eaten too many Kit Kats). In his first opinion, the AG opined the mark was not a colour. In his second, he said he was “even less inclined” to classify it as a colour. In his view, it is a “sign consisting of the shape of the goods and seeking protection for a colour in relation to that shape”. This, if followed by the 13 judges, may kill Louboutin’s mark because under the old law it would put the mark under the spotlight of the prohibition of marks which are shapes which give substantial value to the goods. The Dutch court has already indicated that it thinks the mark is such, if the shape prohibition is found to be engaged. Christian Louboutin subsequently issued a press release claiming the opinion came out in their favour. It’s not over until the massive judges sing.

7.    Colour combination mark shot down in Red Bull blue/grey battle
Red Bull v EUIPO Joined Cases T-101/15 and T-102/15 (EU General Court) (December 2018)

Two colours (see image) in a ratio of “approximately 50% - 50%” or those two colours “applied in equal proportion and juxtaposed to each other” are not capable of registration as trade marks, says the EU General Court. Red Bull’s registrations, already deemed to have acquired distinctiveness by the EUIPO, did not disclose a “systematic arrangement associating the colours in a predetermined and uniform way”. You can read more here, but this is either a policy decision against allowing traders too broad colour-based monopolies, or a failure on Red Bull’s part to come up with quite the right form of words to define what it is they should have a monopoly in. File for colour combinations with caution! (Another interesting two-colour combination case is Giro Travel Company v Andreas Stihl [2018] Case R200/2017-2 (Second Board of Appeal, January 2018 – orange and grey for chainsaws)).

8.    The London black cab has not acquired distinctiveness, south or north of the river
London Taxi Corporation v Frazer-Nash [2017] EWCA Civ 1729 (Court of Appeal) (November 2017)

It hasn’t been a great time for non-traditional trade marks of late. In this case, LTC, the company behind the (arguably iconic) London taxi tried to assert 3D trade mark registrations for the shape of the London black cab against a potential rival. Having failed at first instance, it fared (no pun intended) no better on appeal. The shapes were not inherently distinctive, and the Court of Appeal was just not convinced by the evidence of acquired distinctiveness. “…one must remember”, explained Floyd J, “as always in the case of a shape mark, that the public are not used to the shape of a product being used as an indication of origin…” thereby highlighting the uphill battle that those seeking to obtain (and enforce) shape protection will always be fighting. LTC had not done enough to educate the consumer that the shape of the taxis denoted trade origin.

There are some points on the identity of the relevant consumer (it could be the hirer of a taxi, not just the taxi driver, but no concluded view was reached) and the “substantial value” bar to registration, if you’d like to read more. The IPKat’s longer take is here.

9.    Seretide-turning on surveys in purple passing-off case?
Glaxo Wellcome v Sandoz [2017] EWHC 3196 (High Court) (November 2017)

GSK and Sandoz are fighting over the use of a purple colour to market certain inhalers (GSK’s is called Seretide, inspiring this volume’s worst pun). GSK’s colour EU trade mark registration did not fare well in the Court of Appeal in May last year, but its passing-off claim is still going. In November Mr Justice Birss was asked to grant permission for GSK to adduce survey evidence in that claim. He did, notwithstanding that survey evidence has been treated with some significant scepticism by UK judges ever since the Interflora case. The decision may well turn on its facts, not least because the evidence (two surveys) had already been obtained and deployed in related opposition proceedings, so the question (amongst others) was whether it could be used in the High Court as well. Nevertheless, the survey evidence was allowed in and in his judgment Birss J talks us through the reasons why.

A few interesting things to mention about this case (1) although the survey evidence is in, it could still be given limited weight at trial; (2) the overall costs of this case were put at an eye-watering £6 million. The survey evidence was likely to cost 10% of that but because of the huge overall cost this was considered justified; (3) there are related opposition proceedings re GSK’s application for a UKTM colour mark stayed pending the outcome of this case; and (4) Birss J gave a thumbs up to the possible use of “hot tubbing” of experts in this case – “I must say I also believe that serious thought should be given to conducting a concurrent evidence session ("hot tub") with some or all of the survey experts”.

Some more from the IPKat here.

10. Birmingham v Worcester in local pizza passing-off showdown
Caspian Pizza Ltd v Shah [2017] EWCA Civ 1874 (Court of Appeal) (November 2017)

A battle of two pizza businesses. The Claimant started up in Birmingham in 1991 as CASPIAN and obtained two UKTMs, one in 2005 and another in 2010. The Defendant traded in Worcester as CASPIAN from 2002. Birmingham and Worcester are English cities about 30 miles apart. C sued D and lost at first instance. Amongst other defences, D sought to rely upon the defence under section 11(3) of the Trade Marks Act 1994, namely that “A registered trade mark is not infringed by the use in the course of trade in a particular locality of an earlier right which applies only in that locality”, with “earlier right” here essentially meaning goodwill protectable by passing-off. To do that, D would have to establish that, despite C operating in Birmingham since 1991, D had a defence in Worcester because of activities which started in 2002. D did succeed, both at first instance and at the Court of Appeal. It followed also that C’s UK registrations were invalid. As D had goodwill in Worcester (part of the UK) from 2002, D was in position to prevent registration by C in 2005 and 2010 for the whole of the UK. So C lost its marks too, and presumably will not in future be able to protect its name by way of registered UK rights without the cooperation of D. As well as sending shockwaves through the local pizza communities of England, the Court of Appeal also chose to upset the conflicting authority of HHJ Birss (as he then was) in Redd Solicitors LLP v Red Legal Ltd, which had hitherto drawn a distinction between the 11(3) defence and trade mark validity, a distinction which was followed neither by the first instance judge nor the Court of Appeal this time around. More from the Law Gazette (why not?) here.

Where are they now?

A couple of updates for you.

The Glee case was due at the UK Supreme Court on 2 November, but settled shortly before. Series marks live to fight another day.

Cartier was heard by that same court at the end of January. Judgment on the future of blocking injunctions is awaited.

Cartier should well be around by the time we get to Volume IV. There are judgments to come on a bunch of the above 10 cases too: Kit Kat, SkyKick, AMS Neve and Louboutin at least – but decisions on those inside the next six months is probably quite optimistic.

I sign off with a thank you to my colleagues Jon Sharples and Sian Banks for helping me keep track of all of these cases and more. We’ll be back – enjoy the summer!”
Retromark Volume III: the last six months in trade marks Retromark Volume III: the last six months in trade marks Reviewed by Eleonora Rosati on Tuesday, May 08, 2018 Rating: 5

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