[Guest Post] Appeals to the Appointed Person in the UK – the unappealing truth (part 2)

The IPKat is pleased to publish this follow-up post from Ian Gill, who once again has been scouring decisions from the Appointed Person on trade mark appeals in the UK Intellectual Property Office. 

Nearly five months have passed since the original article in this series highlighting the low success rate in appeals from the UK IPO to the Appointed Person. Despite the pandemic the work of the Appointed Person has continued, albeit via video links for hearings. There have been 21 decisions published between March and August 2020, but of those only three appeals were allowed.

Lack of reasoning on a crucial point 

In O/267/20, British American Tobacco ("BAT") applied to register the mark PODS in relation to cigarettes and other goods and this application was opposed by JT International SA (another tobacco company). The application was opposed under sections 3(1)(b), 3(1)(c) and 3(1)(d) Trade Marks Act 1994. 

The Hearing Officer found that the term "cigarettes" encompassed "e-cigarettes" and went on to consider the extent to which the term “pods” was used descriptively in relation to e-cigarettes. On the basis of that review she found the term “pods” was descriptive and devoid of a distinctive character of "e-cigarettes" and closely related goods and she rejected the application for "cigarettes, tobacco, cigars and cigarillos" goods under s3(1)(b) and (c) but not s3(1)(d). (The application was allowed for some other goods such as lighters and matches.)

BAT appealed, essentially on the basis that it was unreasonable to find that the term "cigarettes" encompassed "e-cigarettes". Both parties had submitted evidence in the proceedings but not on this point (and neither party addressed the point in their submissions). The Hearing Officer did not give any explanation for the reasoning which led her to conclude that "cigarettes" encompassed "e-cigarettes" and this lack of reasoning, taken together with the fact that the parties had not been asked to address this crucial issue, led Amanda Michaels, sitting as the AP, to the conclusion that this was an appealable error. Ms Michaels referred the case back to the Registry to reconsider this issue, noting that the parties may wish to file additional evidence.

Nominal goodwill is not sufficient

In O/304/20 Rajinda Sharma applied on 28 January 2018 to register the mark RECUP in the stylised form shown below in relation to plastic cups and related goods.

A few days later, on 14 February 2018, Smart Planet Technologies Inc applied to register the plain word mark RECUP in relation to cups.

Mr Sharma then filed further applications for similar marks on 30 March 2018 and both parties opposed each other. Both parties claimed to have goodwill prior their application dates.

Smart Planet was successful at first instance as it was accepted by the Hearing Officer that they had goodwill in the UK which would have been sufficient to have succeeded in a claim for passing off at the 28 January application date of Mr Sharma’s application.

Thomas Mitcheson QC found that the Hearing Officer had erred in assuming that any goodwill generated by Smart Planet prior to the 28 January date was sufficient to support a finding of passing off, and having looking at various precedents in paragraphs 30 to 33 of the decision, he concluded that a successful claimant needs to demonstrate more than nominal goodwill – it needs to demonstrate substantial goodwill at the relevant date. The Hearing Officer took the view that any goodwill, however nominal, was sufficient and that was wrong. Having identified that error, Mr Mitcheson reviewed the evidence and found that sales amounting to €4,000 in the context of the plastic cup market as a whole was insufficient to generate sufficient goodwill to support a passing off claim.  

As such, the first application of Rajinda Sharma from 28 January 2018 was allowed to grant but, as the Hearing Officer had not made any decision in relation to Smart Planet’s application or Mr Sharma’s later applications, he asked the parties whether those aspects of the case should be referred back to the Registry. Smart Planet asked for the case to be remitted but one can only assume that this will delay the inevitable refusal of their application.

Improper reasoning

Professor Ruth Annand sat as the Appointed Person in O/326/20 to consider an opposition based on earlier rights in the mark VITRA  brought by Eczacibasi Holding AS ("EH") against an application for the mark VETRO filed by Havwoods Limited. It is worth looking at a summary the Hearing Officer’s findings: 

• Some of the goods were identical;
• The average consumer would pay a normal to high level of attention to the purchasing act;
• The marks were visually and aurally similar to a medium degree, and the conceptual similarity was neutral as both marks were invented words.

Given this summary it is not unreasonable to think that the opposition might have succeed but, based on a global assessment, it was held that there was no likelihood of direct or indirect confusion. It was this overall surprise at the final conclusion that formed the first ground of appeal.  Professor Annand remarked that this attempt was ambitious given that the global assessment of a likelihood of confusion was a multi-factorial determination and that different minds might reach a different conclusion, neither of which is plainly wrong.  Whilst this overarching attempt to overturn the decision failed, a number of other grounds of appeal were successful.  

In relation to the average consumer, the Hearing Officer found the average consumer comprised two groups – ordinary members of the public and businesses. Concerning the level of attention that would be applied by the average consumer when purchasing the goods – ceramic floor coverings and tiles - the Hearing Officer stated:

"The contested goods will vary in price depending on the size and nature of the area to be tiled especially as some commercial projects have very specific technical requirements such as water repellence or other safety concerns. As such I would expect a normal to high level of attention will be paid during the purchasing process …"

It was accepted by the AP that the Hearing Officer did not appear to feed this finding of two groups of purchasers and different levels of attention into her global determination of likelihood of confusion and this constituted an appealable error.

The decision was also found to be deficient in relation to the Hearing Officer’s assessment of aural similarity, the Hearing Officer did not correctly consider the alternative ways in which the Applicant’s mark could be pronounced and, separately, the Hearing Officer failed to consider whether the distinctive character of the earlier trademarks had been enhanced through use. In that regard the Hearing Officer said: 

"The opponent’s marks are invented words which have no meaning in relation to the goods, so I consider them to be inherently distinctive to a very high degree. I have considered the evidence filed on this case showing use of the earlier marks, but in my view, this does not put the opponent in any stronger position with regard to the distinctiveness of the earlier marks."

It was accepted that it was not possible to discern from this passage whether the Hearing Officer thought that: (a) because the earlier trade marks were invented words their high inherent distinctiveness could be enhanced no further through use; or (b) the Opponent’s evidence was not strong enough to establish enhanced distinctiveness by reason of use. Professor Annand then made her own assessment of the risk of confusion and refused the application.

Summary

The rejection rate of appeals to the Appointed Person remains consistent at around 85%.  The recent decisions reinforce the need to identify something that is plainly wrong in the decision such as the lack of opportunity to give evidence or make submission on a crucial point (did "cigarettes" encompass "e-cigarettes") or a misapplication of the law (any goodwill is sufficient to support a passing off claim). The Eczacibasi Holding decision is more nuanced as the Hearing Officer’s decision was found wanting on a number of points and this is, perhaps, reflective of the first impression that the global assessment was incorrect even if the appeal on that specific ground was not interfered with.