[Guest post] Retromark Volume IX: the last six months in trade marks

Darren Meale of Simmons & Simmons presents the ninth volume in his rundown of notable trade mark cases over the past six months.

Retromark Volume IX: the last six months in trade marks

by Darren Meale

This volume was due a few months ago, but then my son was born and my capacity for blogging (along with my capacity for other more basic things like sleeping and remembering to feed myself) vanished. As I emerge from nappies, crying, baby vomit and all of that baby glamour, I’ve finally found a moment to reflect on the last six (well, seven) months of trade mark disputes.

1. Red Dot Dead, no Redemption as Tefal burned at the UKIPO

Tefal UK trade mark application 3361324 O/587/20 (November 2020)

Tefal, the sauce pan legends, make pans with red spots in the middle which change colour when the pan heats up to show you when they are ready to cook with. I’m pretty sure I’ve owned several such pans, but I’m not sure I knew they were unique to Tefal. It appears that at least 32.5% of people will proclaim “TEFAL!” when shown the photo below, but that was not enough to save the day at the UKIPO.

Tefal sought to register the above depiction as a figurative mark. Note the red spot is the only part claimed, the lines of the pan are dotted. A written description explained that what was claimed was a red dot in this position on a pan. Tefal described the application as for a position mark, a classification used at the EUIPO but not the UKIPO.

Readers of past volumes will know that non-traditional marks fare extremely poorly at the UKIPO. Tefal was no exception. The mark was rejected as not inherently distinctive, leaving Tefal to adduce evidence of acquired distinctiveness, including a pre-pandemic survey of shoppers on UK High Streets.

In the final written decision, the Hearing Officer recounted the pandemic-impacted progression of the application, which included hearings before another hearing officer whom had now retired. The new Hearing Officer set out a recap of all the debates before him and went on to agree with the earlier hearing officer that Tefal’s evidence did not [insert food related pun, like “cut the mustard” but better]. Considering the evidence of substantial sales and promotion of pans bearing a “famous red spot” (as Tefal described it), the Hearing Officer noted his “grave concern” that the red spot has, all long, been used as an indicator of heat rather than as a trade mark. Ultimately, he concluded that Tefal failed to show that a significant proportion of consumers “not just associate the sign with [Tefal], but regard it as a trade mark guaranteeing the origin of the goods”.

IPKat here.

2. Bentley v Bentley: Clothing beats Motors again in the Court of Appeal

Bentley Motors Limited v (1) Bentley 1962 Limited (2) Brandlogic Limited [2020] EWCA Civ 1726 (December 2020)

This was the first ever case featured in Retromark and turned up again in Volume 7. In its third appearance, the Court of Appeal dismissed Bentley Motors’ appeal against the High Court’s finding that its sales of clothing had infringed the trade marks of Bentley Clothing. This is the first of two Court of Appeal judgments led by Lord Justice Arnold in this volume.

At trial, Motors had advanced a major defence of honest concurrent use which failed (it has sold clothing since 1987), but it was unable to obtain permission to appeal this.

There were three grounds of appeal. The first, not pressed by Motors, was whether the sign below was to be regarded as one sign or two. The trial judge held two, the Court of Appeal agreed.

The second ground of appeal was that the final of the “six conditions” for double identity trade mark infringement had not been considered by the trial judge. The sixth condition is “The use must affect, or be liable to affect, one of the functions of the trade mark”. Arnold LJ recounted the progression of the proceedings to conclude that this point had only ever been advanced by Motors as part of its honest use defence, which had failed. It was not therefore open to it to raise an argument on appeal relating to the sixth condition. In any event, Arnold LJ indicated that he did not think an argument based on this condition would have won.

I noted in Volume 7 that Motors retained a right to sell jackets, silk ties, caps and scarves under the BENTLEY sign owing to the application of transitional provisions relating to the “new” trade mark law that came into force in the UK in 1994. Motors appealed this point too to try to broaden it into clothing, but also failed.

3. £15,000 of whisky sales in five years enough to prove use of an EU trade mark? UKIPO says no but EUIPO Board of Appeal says yes

Danny Boy Label’s TITANIC registrations O/050/21 (UKIPO, January 2021) and R0109-2020-1 (EUIPO Board of Appeal, November 2020)

Just how much use is enough to prove genuine use? I have defended marks with very little, but defeated marks with more. There is no hard and fast rule. But registrations can be defended with very unimpressive sales figures. In this case, £15,000 of sales of alcoholic beverages mostly in Belfast, Northern Ireland, was held NOT enough to prove use of an EU trade mark for TITANIC and thus blocked Danny Boy’s attempt to rely on it to oppose a third party’s mark at the UKIPO.

However, when the EUIPO came to consider the TITANIC EUTM in an action brought by another entity and based on essentially the same evidence, there was a different result. The EUIPO also said the £15,000 was not enough but the Board of Appeal found the opposite, allowing the mark to survive for whisky. As Ian Gill points out in his IPKat guest post here, a market share of in the region of 0.0000001% and concentrated in one EU city (well at the time it was in the EU) was enough to keep an EUTM alive.

Given the challenges we already face when clearing marks, the knowledge that a teeny tiny confined use can keep an EU-wide registration alive is not going to make things easier.

4. Should Eagles migrate to Pennsylvania, or roost in England for a passing off claim?

Lyle & Scott v American Eagle Outfitters, Inc [2021] EWHC 90 (January 2021)

This case is a breach of contract and passing off claim concerning the two eagle logos depicted below. It comes with history, and with history comes complication. First in dispute in 2005, this time around L&S is seeking to sue AE and it applied for permission to serve its English High Court claim outside of the jurisdiction, in the US where AE is based. AE challenged this, arguing it should be sued in Pennsylvania instead.

The complexity arose because of a past coexistence agreement that itself had been the subject of lengthy litigation (AE having argued it was a bullet point list of terms which had never become binding). The end result of that litigation was that both parties agreed there was a contract between them and that it was governed by the law of the state of Pennsylvania (where it had been litigated).

Fast forward to 2020 and L&S alleges AE is selling its clothing in the UK via third party websites, committing passing off and breaching the coexistence contract. L&S sues in the UK but AE then sues for a declaration in Pennsylvania. Before Mr Justice Miles L&S’s task was to convince the English Court that (a) there is a serious issue to be tried on merits; (b) there is a good arguable case that the claim falls within one of the jurisdictional gateways; and (c) in all the circumstances England and Wales is “clearly or distinctly the appropriate forum”. AE’s position was that L&S could not establish (a) and (c). The judge weighed up the parties arguments on passing off, careful to note that he should not conduct a mini-trial, and concluded there was enough of a claim to take forward where the facts and evidence could be explored fully: a significant factor was the judge’s view that the eagles were “closely similar” with a “clear potential for confusion”.

The final question was then whether this was a claim clearly or distinctly appropriate for the English courts. Both parties agreed that the whole dispute should be settled either in England or in Pennsylvania. They just disagreed as to where. The judge weighed up the factors, but most were neutral – for example the whereabouts of the parties: the claimant was based in the UK while the defendant was based in the US. The big factors were (1) the case involves a claim for a tort committed in England; (2) that claim was probably governed by English law; (3) the passing off evidence would focus on consumers in England; (4) the governing law for the contract claims is state of Pennsylvania. The judge held that the first three clearly or distinctly outweighed the fourth. The case will proceed in the English court.

Unless it settles, we can expect this case to pop up in a later volume of Retromark.

5. Go buy Beverley Hills, but not on Amazon.com

Lifestyle Equities v Amazon UK Services [2021] EWHC 118 (January 2021)

Lifestyle owns the BEVERLEY HILLS POLO CLUB brand. Judging by the models on their website, when I hit 40 next month I will be too old to wear them. The brand is owned by a different entity in the US, such that genuine BHPC clothing that would be authorised by the owner to be sold on the US market was, Lifestyle claimed, finding its way into the UK/EU markets without Lifestyle’s consent. Amazon, so it was alleged, was to blame and Lifestyle proved it is game for a fight by suing them directly.

The claim turned on whether or not products listed on amazon.com were “targeting” consumers in the UK or the EU. Targeting is a legal concept in the UK and the EU which turns on the facts.

The judge summarised Lifestyle’s case on targeting as follows:

• amazon.com effectively targets the world, not just the US. The “.com” suffix does not indicate a particular country and is essentially global;
• the .com homepage would recognise that a user is from the UK and tailor the page to make it easy for a UK consumer to purchase from the .com;
• in the top left-hand corner of the home page, the UK consumer sees the statement “Deliver to United Kingdom”, and items that ship to the UK are shown;
• various other indications were given to the consumer about local currency, import fees, and other things which demonstrated that UK consumers could purchase from the .com.

It can’t be right that just putting up a website that someone in the UK can reach (which covers most of the internet) is enough for infringement. More is needed, and this list of factors isn’t half bad – Amazon clearly has a sophisticated set up to tailor its website to the country of the potential customer, and it would only invest in that because it wants custom from those customers, in this case UK customers.

However, the judge found for Amazon. It was not targeting the UK or the EU. He held that UK consumers on the US Amazon website (and there were some) knew full well they are on a website primarily directed at US consumers, they believed the website was not targeted at them, but they decided to shop there nevertheless (and suffer disadvantages like import fees). Interestingly, the fact Amazon made it as “painless” as possible for them to do this was “largely irrelevant”.

This case is an excellent illustration of targeting in practice, and the careful balancing of facts by the Court which was mindful of the need to address the “tension between the territoriality of trade mark rights and the global nature of the internet”.

Footnote: Lifestyle is fast becoming a contender for most litigious brand owner and may soon give easyGroup and Sky a run for their money. I’ve spotted at least three High Court trade mark judgments this year. There is this case; Lifestyle Equities v Ahmed [2021] EWCA Civ 675 (May 2021) (a Court of Appeal judgment dealing with account of profits); and Lifestyle Equities v The Copyrights Group [2021] EWHC 1212 (May 2021) (an infringement claim with a potential Brexit angle). Three cases by one Claimant is a little too much for Retromark, so as well as this case this volume deals with the second (see below for Ahmed).

6. Columbo, Jobs, Cook – ONE MORE THING: upset, annoy (and parody?) Apple all you like, that’s not bad faith

Swatch AG v Apple Inc [2021] EWHC 719 (March 2021)

Swatch applied for ONE MORE THING for watches. This is, says Apple, a phrase intimately connected to it. Steve Jobs used to deploy it to announce new products. Tim Cook revived it to launch the Apple Watch in 2015. The catchphrase originates from Columbo, one of the greatest detective shows in history (says me) (“Just One More Thing” is actually the title of Peter Falk’s autobiography), but according to Apple the phrase is now the purview of its fans.

Apple and Swatch have a long running battle over their competing marks I-WATCH and I-SWATCH. This, says Apple, means there is “bad blood” between them which has caused Swatch to apply for ONE MORE THING essentially (and forgive my language) to piss Apple off. Swatch, perhaps advised to tread carefully, avoided offering any direct explanation for its application or any plans to use it (see how the opposite approach backfired in the MONOPOLY case below).

Before the UKIPO, the Hearing Officer upheld Apple’s bad faith claim. While finding that few members of the UK public would tie the phrase to Apple such that there could be no passing off, he did find that Swatch’s “retaliatory measure” had intended to poke fun at Apple “in a manner akin to parody”. Seeking to register a trade mark, which should be used as a badge of origin, went “far beyond what is necessary to engage in legitimate parody”. It is likely that Apple had a better case based on Swatch’s intention not to use the mark but block Apple from registering it, but it failed clearly to plead this argument and so could not advance it.

An appeal was heard by Iain Purvis QC sitting as a Deputy Judge of the High Court. He upheld the appeal: no bad faith by Swatch. First, he wasn’t convinced that Swatch was trying to parody – yes they wanted to upset Apple, but that didn’t have to mean by parody. Instead he concluded that all that could be said with confidence on the evidence is that Swatch must have regarded the application as useful in some way in its broader dispute with Apple. The Hearing Officer had been wrong to conclude that “poking fun at Apple in a manner akin to parody” was Swatch’s intention. That left the desire to annoy or upset, and that was not enough for bad faith.

The judge also debated whether an intention to parody, even if proven, could have justified a bad faith finding. I do not read him as ruling this out, but he doubted the Hearing Officer had a good basis here to equate Swatch’s parody with bad faith. At one point in the appeal he challenged Apple to provide examples of the kind of parody they were concerned by – they declined to provide them. 

IPKat here.

7. Hasbro’s honesty calls to mind an abuse of law, and down comes its bad faith MONOPOLY

Hasbro Inc v EUIPO EU General Court, Case T-633/19 (April 2021)

Hasbro filed several MONOPOLY trade marks at the EUIPO over the years. There was a degree of overlap and duplication of goods and services each time. Kreativni Događaji, a Croatian company which makes a board game called DRINKOPOLY, sought a declaration that Hasbro’s most recent EUTM was registered in bad faith because it was a repeat filing registered to circumvent the five year proof of use periods imposed upon all European trade marks.

I covered this case when it was before the Board of Appeal in Volume 6. The EUIPO Cancellation Division rejected the bad faith claim, but the Board of Appeal upheld it following Hasbro’s submission of a witness statement and then a rare (exceptional?) oral hearing.

In oral evidence, a lawyer from Hasbro defended its filing strategy by offering an honest explanation of its reasons for re-filing. In essence, Hasbro confessed that refiling every five years was easier for brand protection because no proof of use was required for young marks. Hasbro thought that this was something everybody did or it was at least accepted industry practice. In doing so it incriminated itself and bad faith was found. The General Court agreed with the Board of Appeal, describing Hasbro’s conduct as “call[ing] to mind an abuse of law”.

The General Court did clarify that a refiling would not automatically be considered bad faith. Further evidence was required, and Hasbro’s witness had provided it.

The obvious comment is to say that Hasbro should have kept quiet and taken its chances. That might be right, but it is worth noting that although the burden of proving bad faith is on the applicant for invalidity, the applicant can shift the burden over to the proprietor to provide “plausible explanations regarding the objectives and commercial logic pursued by the application”. So perhaps Hasbro felt that the whole truth was the only option. 

IPKat here.

8. Court of Appeal considers account of profits, saving infringers a small fortune

Lifestyle Equities v Ahmed [2021] EWCA Civ 675 (May 2021)

English court judgments on remedies for trade mark infringement are a rare breed, rarer still those at Court of Appeal level. In this case, Lifestyle (see above) sued sixteen defendants for using the competing SANTA MONICA POLO CLUB sign and won. The Ahmeds were two individuals later found jointly and severally liable as accessories for the acts of other of the defendants, most of them being corporates which had gone into administration insolvent.

The trial judge held that joint and several did not mean completely liable for the acts of the other defendants when it came to an account of profits, which was Lifestyle’s chosen remedy. The judge held that the accessories should only be liable for profits they themselves made from the wrongful acts, not all of the profits. The difference was significant – liability was thereby reduced from a total of £3.4m to about £840k. The judge granted permission to appeal.

The Court of Appeal, led by Birss LJ, upheld the judge’s decision. There were High Court authorities in favour of the judge’s position, but nothing which bound the Court of Appeal. Birss LJ chose to side with the trial judge because an account of profits was an equitable remedy, disgorging from the wrongdoer profits he or she actually made from the wrong.

The Ahmeds also appealed with a view to reducing their burden further, with considerable success. The bulk of the “profit” attributed to them by the trial judge was a loan from a corporate defendant to Mr Ahmed. Here Mr Ahmed may have got lucky. On appeal Birss LJ held that because at trial Mr Ahmed remained liable to repay the loan to the company, in his hands it could not be a profit. Since the trial judge made his order, the company had been dissolved such that Mr Ahmed no longer had anyone to repay. But the judge’s order was wrong at the time, so should not be upheld. This got Mr Ahmed out of more than £635k. With a win on an argument around tax, collectively the Ahmeds owed Lifestyle just less than £118,000. One hopes the Ahmeds thanked their lawyers with a rather large bottle of champagne for that outcome!

See Rosie Burbidge’s blog here, which also deals with the third Lifestyle case referred to above.

9. Gymnastic judges’ verdict sees National Governing Body outscore its wannabe

UK Gymnastics v British Amateur Gymnastics Association [2021] EWCA Civ 425 (March 2021)

Written by Lord Justice Arnold, this is a Court of Appeal judgment of just 46 paragraphs, much shorter than many of the judge’s famously comprehensive High Court judgments.

British Gymnastics is the national governing body (NGB) for the sport of gymnastics in the UK. It owns several stylised trade mark registrations for this name – there’s an example below. UK Gymnastics is a rival, unofficial body, using its name as a word mark and using the logos below. BG sued it for trade mark infringement and passing off. HHJ Melissa Clarke held in favour of BG in the IPEC.

On appeal, the Court of Appeal considered five grounds of appeal (a sixth on 10(3) infringement did not arise given the other findings). At the end the score was 3-2 to BG. The Court of Appeal’s conclusions were:

1. the judge had found that UKG was not an NGB and this was correct;
2. the judge indicated that passing off had been committed by UKG misrepresenting that it was an NGB. This was an error, and it had not been BG’s case that merely misrepresenting itself as an NGB was a passing off by the defendant of the claimant;
3. this error carried through to the injunction ordered by the IPEC, which forbid UKG from asserting it was an NGB. The Court of Appeal excised this prohibition from the injunction;
4. & 5. sought to reverse the IPEC judge’s decision on trade mark infringement, alleging inconsistent treatment between UKG’s word and logo usage; that a single finding of actual confusion was not enough for an overall conclusion of likelihood of confusion; that the judge failed to consider the matter from the perspective of the average consumer; and that it was wrong to take into account that BG had effectively had a monopoly as the sole NGB for gymnastics in the UK for many years. None of these arguments convinced Arnold LJ.

It would be wrong to suggest the 3-2 outcome meant this appeal was close. It wasn’t. The trade mark infringement claim was backed up by two other passing off claims, which would stand or fall together. They stood. The two points gained by UKG tell us it was not passing off to claim to be an NGB, and offer UKG a small consolation of not being enjoined from making such a statement.

What is interesting to me but not covered in the appeal is that the marks in suit are all highly descriptive, they literally describe the sport they concern and the territory they cover. As far as I can tell there were no arguments around non-distinctiveness in the assessment of likelihood of confusion, but in the IPEC UKG did argue that its use was not without due cause because its name was descriptive or suggestive of its services, such that UKG could not be liable of infringement under 10(3). That argument failed and 10(3) was not considered on appeal as a result of the Court of Appeal’s conclusion on the other grounds of appeal.

10. Software, hardware, footware, but nothing in Class 25

Puma SE v Nike Innovate CV [2021] EWHC 1438 (May 2021)

A trade mark battle against two of the biggest names in footwear over the name FOOTWARE. Nike applied for a UK trade mark for FOOTWARE in the technology classes – 9 (software); 38 (telecommunication services); and 42 (software services). Puma opposed it based not on an earlier right but arguing that the mark was non-distinctive and descriptive.

While I’d be surprised to find any Wi-Fi in my trainers, it is understood the term was destined to be used for technology-embedded footwear and thus, says Puma, would be descriptive in the eyes of the average consumer. The UKIPO’s Hearing Officer concluded that this was “not a meaning which is immediately apparent or easily recognisable without some stretch of the imagination”, and held the mark was not descriptive. To me, that is a decision the Hearing Officer was entitled to make. I think the term is actually a clever one, subtle but definitely a neologism.

An appeal was heard in the High Court by Mr Justice Zacaroli (not a trade marks regular). In a pithy judgment, Zacaroli J carefully checked the Hearing Officer’s decision for an error of judgment, but could find none. The appeal failed.

The cougar and the goddess of victory are also fighting an opposition before the USPTO, but no decision on that yet. There’s also a cancellation action pending at the EUIPO. 

More on TheFashionLaw here.

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That’s Volume IX all wrapped up, meaning we hit the big Volume X next time around!

Big thanks to my colleagues Amy Palmer and Adam Mackinnon for helping me collate this volume.

Volume I – April 2016 to March 2017

Volume II – March 2017 to September 2017

Volume III – November 2017 to April 2018

Volume IV – May 2018 to October 2018

Volume V – November 2018 to March 2019

Volume VI – April 2019 to October 2019

Volume VII – October 2019 to April 2020

Volume VIII – April 2020 to October 2020