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

Former GuestKat Darren Meale of Simmons & Simmons presents the twelfth volume in his rundown of notable trade mark cases over the past six months:

Retromark Volume XII: the last six months in trade marks

by Darren Meale

Volume XII has taken a little longer than usual to pull together, but there’s been plenty of good material to squeeze into it. We’ve got everything from smartwatches and chocolate to energy drinks and Louboutins in the 10 cases that follow. Trade mark law shows no signs of standing still.

1. Samsung’s defeat on smartwatch faces to go to the Court of Appeal

Montres Breguet SA v Samsung Electronics Co. Ltd [2022] EWHC 1895 (Ch) (July 2022)

In our last volume, we reported on Samsung being held directly liable as a platform for copied watch faces for Samsung smartwatches. A form of order hearing took place a few months later. Mrs Justice Falk ordered an injunction, not satisfied by the limited form of undertakings Samsung had offered and not persuaded to do otherwise in response to Samsung’s concerns that a standard injunction would leave them in an uncertain position.

The judge did grant permission to appeal in respect of (a) the correct approach for app stores in relation to Article 14 of the e-Commerce Directive and a question on knowledge under that Article; and (b) several issues around “use” including whether there was an error of law in taking a "look at everything" approach in determining whether there was use by Samsung in the course of trade, and whether there had been use in relation to smartwatches as opposed to apps. However, the injunction was not stayed pending the appeal.

The judgment also features an interesting insight into the workings of awards of costs, and costs on account, following the conclusion of a claim subject to cost budgeting, with a reminder that if costs depart from the budget there is a mechanism in the CPR to apply to amend it.

This could be an important decision for the Court of Appeal. For a long time platforms have benefited from a fairly generous set of limitations of liability that some rightsholders would argue allows them to profit from infringement. Will the Court of Appeal support the High Court in choosing to push back as the CJEU has in Louboutin (see below)?

2. Triple purple packaging particulars put through their paces – with predominant success!

Nestle v Cadbury [2022] EWHC 1671 (Ch) (July 2022)

You can’t trade mark a colour. You can trade mark a colour. The rules are no different to any other trade mark. The rules are different. There ends my lesson on the law of colour trade marks.

Nestle and Cadbury have been surpassing the GDP of a small nation for some years by fighting over the right to wrap chocolate in purple and protect the shape of a Kit Kat. In 2013, Cadbury’s registration for Pantone 2685C was held invalid because its description rendered it void for lack of certainty. An appeal in 2018 failed to dodge this finding by trying to argue that the registration was a series of marks (see Volume 5).

Cadbury tried again with three new purple applications, each with a slightly different description. Following an appeal in the High Court before Mr Justice Meade, they now have two of them registered. Before this dispute, all three were first tested by the UKIPO, which required that Cadbury prove that they had acquired distinctiveness through use. Cadbury having succeeded on this basis, Nestle opposed them. The three descriptions (each starting with “The colour purple (Pantone 2685C),…”) and their fates were as follows:

• ‘362 – “…as shown on the form of application, applied to the whole visible surface of the packaging of the goods.” The UKIPO dismissed the opposition against this wording, finding it clear and precise. This form of words was very like the version which failed in 2013 but with the most offending word therein, “predominant”, removed. It is not clear why, but Nestle did not appeal this decision.
• ‘361 – “…as shown on the form of application, applied to the packaging of goods.” This was rejected by the UKIPO. The Hearing Officer considered it encapsulated a “potentially limitless number of signs”, including signs with other colours present. It was ambiguous. On appeal, Meade J agreed – this version was worse than the version rejected in 2013 – it “preserves all the practical problems of scope and adds more”.
• ‘822 – “…shown on the form of application”. This was also rejected by the UKIPO as being even more ambiguous than ‘361 and representing a multiplicity of forms without explaining how the colour is used at all. On appeal, Meade J disagreed and upheld the registration. In his view, longstanding CJEU guidance (namely, Libertel) told us that colours per se could be registered with nothing more. Were he to refuse this application, he thought no, or almost no, Libertel form mark would ever be registered.

There’s a debate to be had over why adding words to try better to specify a mark makes it objectionable but that saying nothing at all is fine, but that debate will not fit into a Retromark post. As long time Retromark readers may have worked out, I think we should be more open in allowing registration of colour and other non-traditional marks but that perhaps we should explain with greater clarity when we will allow them. In my experience, while the UKIPO’s official position is that all types of mark are registerable, in practice it will just refuse anything out of the ordinary. This judgment will not reverse that – all three applications had (rightly) to show acquired distinctiveness anyway – but now that we have at least two forms of description wording which have been blessed by the court, at least that element of complete guess work has been removed.

For all those hoping for more purple battles, Meade J’s judgment records that Nestle and Cadbury had resolved their colour dispute before the appeal. The appeal continued with the intervention of the Comptroller of the UKIPO with a view to obtaining some clarity in this otherwise entirely unclear area.

IPKat here.

3. Can a hotel in the United States use an EU trade mark? No, no, but finally… yes!

Standard International Management v EUIPO Case T-768/20 EU General Court (July 2022)

Can a hotel in the United States use an EU trade mark? It is physically located outside of the EU so how could it ever provide services into the EU? The answer to this question hasn’t always been clear to me, although the sensible answer is to say that, if I actively market my hotel to the EU tourist market and EU tourists respond by booking to stay in my hotel, that counts as genuine use in the EU. The consequence of that conclusion is of course that I could stop someone else running a hotel with the same or similar name in the EU, even without ever having an intention to open my own hotel there.

In Standard International, the US hotel in question lost its trade mark registration for non-use before both the EUIPO Cancellation Division and the EUIPO Board of Appeal, despite ample evidence of advertisements and promotional campaigns aimed at customers in the EU. The EU General Court overruled them, drawing a distinction between the place where these services were provided (here hotel services in the US) and the place where the trade mark is used (the EU by way of advertising). It also noted that offers for sale and advertising were ways of using a trade mark, and this is precisely what the trade mark owner has directed at EU consumers.

I cannot immediately find a clear statement of the corresponding position in the UK, but do note the comments of Daniel Alexander QC (sitting as a Deputy Judge) in Abanka v Abanca [2017] EWHC 2428 (Ch) at paragraphs 102 to 104, with paragraph 103 distinguishing a non-UK business which “pushes” itself into the UK (eg, by advertising to UK consumers) with a business which is “pulled” into the UK (by its customers going abroad). The Court of Appeal also referred to this case in Lifestyle Equities v Amazon [2022] EWCA Civ 552 (see Volume 11), a case on targeting. Presumably, pushing your business into the UK should generate trade which can be relied upon to prove use in the UK.

IPKat here.

4. SkyKicked all the way to the UK Supreme Court

SkyKick UK Ltd (Appellants) v Sky Ltd (Respondents) UKSC 2021/0181 (July 2022)

The case that needs no introduction – it has featured in more Retromark volumes than any other – is to proceed to the Supreme Court which will in June this year hear SkyKick’s attempts to overturn the Court of Appeal’s surprise decision effectively to rubber stamp Sky’s trade mark filing practices which the High Court ruled were in bad faith (see Volume X). To say this will be keenly watched is an understatement: it may be the most significant trade mark decision in the UK this century. But even if the Supreme Court Justices reverse the Court of Appeal decision, we may not find all our problems solved – “computer software” and similar terms still need a more radical treatment than I believe even the UK’s highest court can prescribe.

5. The address for service mess for UK trade marks

Tradeix Ltd v New Holland Ventures (MARCO POLO) O/681/22 UKIPO (August 2022)

The UKIPO has a generous policy for who it allows to act as representatives in UK trade mark matters. Whereas the EUIPO applies pretty strict protectionist rules which have seen UK firms without a genuine EU presence kicked off the register post-Brexit, the UKIPO has remained rather relaxed about allowing all and sundry to get a piece of the UK trade mark pie. One requirement it did introduce post-Brexit was the need for a UK address for service when filing a UKTM. There was no upfront requirement for such an address for International Registrations designating the UK. In MARCO POLO, an application for invalidity was filed against an IR(UK). The UKIPO posted a letter to the proprietor in Australia, setting it a two month deadline to both appoint a UK address for service and file a defence. The proprietor was in lockdown and did not get the letter. It lost its registration in default.

On appeal to Geoffrey Hobbs QC acting as the Appointed Person, it was held that the UKIPO went outside of its powers by purporting to serve the invalidity action outside of the jurisdiction in Australia. All it had the power to do was write requesting the appointment of the UK representative. The default decision was set aside.

As many of us then experienced, the UKIPO decided to stay a whole load of pending UK proceedings where no UK representative was yet on record on one side while it worked out a new policy. A new Tribunal Practice Note was published on 23 January 2023, setting out a more but not entirely forgiving procedure whereby, for cancellation actions, the UKIPO will now write to effected parties first setting them a one month deadline to appoint a UK representative with a defence deadline to follow later. For oppositions, the procedure remains largely unchanged.

I include this procedural hoo-ha in order also to highlight CITMA’s campaign to reform the UKIPO’s rules on representation. Their research suggests 35% of the Top 100 UKTM filers are based outside the UK, compared to 16% before Brexit, with foreign firms accounting for 39% of all UKTM applications now compared to just 15% in 2019. They also highlight the problem of front companies which file a huge number of applications, predominantly if not exclusively for Chinese applicants. I do not think it is controversial to say that these are not genuine companies run by genuine UK lawyers, but are little more than post boxes designed to meet the UKIPO’s threadbare requirements. In a post-Brexit world extremely short on genuine “opportunities”, reforming the system to prevent unqualified and illegitimate outfits from taking over the register while supporting the UK profession feels like a no-brainer. Get on with it UKIPO!

6. Could a Red Dawg take advantage of a Red Bull? Yes and yes

Monster Energy Company v Red Bull GmbH [2022] EWHC 2155 (Ch) (August 2022)

Sometimes trade mark law can be infuriating. AMERICAN EAGLE and EAGLE RARE can be held to be confusing, but MISTERCHEF and MASTERCHEF apparently not. A lot of discretion is given to first instance judges to make their assessments, and appeal judges are reluctant to interfere with them.

This case between two energy drink giants wasn’t a case of confusion, but of unfair advantage. Monster sought to register RED DAWG. Red Bull – perhaps the world’s most famous energy drink – opposed. The UKIPO Hearing Officer said there was no direct or indirect confusion – a right decision I think. But he did uphold the opposition under section 5(3) of the Trade Marks Act 1994, on the basis that Monster sought to take unfair advantage of Red Bull’s reputation. The Hearing Officer was convinced that, because of the “very strong reputation” of Red Bull, consumers encountering Red Dawg would be reminded of Red Bull and find Red Dawg “instantly familiar”, allowing Monster to free ride.

Monster appealed to the High Court, arguing that this conclusion had been reached without any evidence. There was no finding of intentional free riding, and nothing to explain why any advantage obtained would be unfair. The Hearing Officer had given only a limited analysis of his reasoning for concluding that unfair advantage could be established.

Mr Justice Adam Johnson declined to intervene. In his view, the Hearing Officer analysed the law clearly and correctly and made no error of principle. The judge carefully explains why the Hearing Officer was free to make the decision he did and why the Court should not intervene on appeal. In doing so he reinforces my opening paragraph. The original decision was one made at an administrative level, not really appealable and which largely also determines any infringement dispute that might have followed. And I think it is a highly debatable decision, only explainable if we accept that Red Bull are entitled to the widest possible trade mark monopoly owing to their position as market leaders. Like the EAGLE monopoly effectively granted in Liverpool Gin v Sazerac (see Volume 10), this decision effectively grants a RED + animal monopoly. But I am not sure that is fair.

7. Every Lidl helps in wordless bad faith barney between Lidl and Tesco

Lidl Great Britain v Tesco Stores [2022] EWCA Civ 1433 (November 2022)

Most of us would be doubtful of the capability of a yellow circle set within a blue square, with only a red border as embellishment, to function as a trade mark. But that is the basis of Lidl’s trade mark infringement, passing off and copyright infringement claim against Tesco. The images below show the marks and sign at issue.

Tesco sought to defend itself in part with a counterclaim that Lidl’s marks protecting the “Wordless mark” – the yellow on blue circle – were filed in bad faith. Tesco’s main bases for such a claim were that (1) Lidl never intended to use them as trade marks, but just to deploy them as weapons in legal proceedings; (2) over many years it had not actually used them (without words at least); and (3) the register showed evidence of multiple refilings by Lidl for the purposes of evergreening.

The High Court judgment from June is at [2022] EWHC 1434 (Ch). The judge, Mrs Justice Joanna Smith DBE, heard an application by Lidl to strike out the bad faith counterclaim as having no real prospect of success. The judge granted Lidl’s application, not being satisfied that Tesco had raised a prima facie case of bad faith.

In a judgment which is almost entirely taken up by analysis of UK and EU case law, the Court of Appeal, led by Arnold LJ, overturned the High Court’s decision and allowed Tesco’s counterclaim to proceed to trial. Whereas Smith J was convinced that the pieces of Tesco’s counterclaim did not add up to enough for a proper bad faith claim, Arnold LJ took a different view, carefully explaining the different parts of the claim – many of which were based on undisputed facts (eg, that there had indeed been multiple overlapping refilings) – and concluding rather convincingly that they did indeed have a real prospect of success.

The appeal reverses a surprising outcome at first instance. Even leaving aside the evidence of evergreening, the questionable nature of the Wordless Mark coupled with a long period without using it (without adding words at least) must surely be arguable given the fairly undefined, and still developing, nature of the law on bad faith.

By the time this edition is published, the High Court will have heard the trial of both the claim and restored counterclaim – I will cover the decision in the next volume.

Reuters here.

8. You best be itching to sue – VAGISAN battle teaches us an important lesson in acquiescence

Combe International v Dr August Wolff GmbH & Co KG Arzneimittel [2022] EWCA Civ 1562 (November 2022)

The dispute between VAGISAN and VAGISIL made Volume 10 (and 11), where those marks were held to conflict. An appeal made it to the Court of Appeal with a judgment in November 2022 but the defendant was unsuccessful again. Findings of likelihood of confusion are not readily overcome on appeal, so this decision is not notable for that. What is significant is the Court of Appeal’s treatment of the doctrine of statutory acquiescence.

If I register a mark and then use it for five years and you don’t challenge me, you might be precluded from doing so on the basis that you have acquiesced to my use under section 48(1) of the Trade Marks Act 1994. I was raised to understand that acquiescence implied some sort of positive act by the potential claimant to the potential defendant that no claim would be made. The Court of Appeal’s guidance in this case, coupled with recent EU case law, suggests that matters have moved on.

In Heitec (see Volume 11), the CJEU concluded that merely sending a warning/C&D letter would not be enough to stop the five year clock running, especially if some sort of civil action did not follow within a reasonable period.

At first instance in Combe, the judge decided that a cancellation action brought against the registration of the defendant’s EUTM was enough to interrupt the acquiescence period.

Mr Justice Arnold took a different view. His interpretation of the authorities (including Heitec) was that they now indicated that positive action had to be taken against the allegedly infringing use. A challenge to registration would not suffice.

This is highly significant. It is undeniable that most trade mark owners today fight proxy wars against infringers at the trade mark office via opposition proceedings, chiefly because they are much cheaper than infringement proceedings. You win an opposition then obtain undertakings not to use and save yourselves a trip to the High Court. While most such oppositions will be resolved one way or the other well before five years, it is not that unusual for them to take longer. Where there has been a long period of settlement discussions, for example, or where a case goes to an appeal – five years can creep up all too quickly.

But according to Arnold LJ in Combe, once you see five years approach you better get a claim going – or else!

9. BIG MAC is back, sorry Supermac

McDonald’s v Supermac’s, Case R0543/2019-4, EUIPO Board of Appeal (December 2022)

This case featured in Volume 5 in 2019. Shoddy evidence of use led to the revocation of McDonald’s EUTM for BIG MAC. McDonald’s appealed, and more than three years later have been successful. In a JIPLP article I also wrote at the time, I debated whether the EUIPO should have given McDonald’s five annexes of use evidence the benefit of the doubt.

Fortunately for McDonald’s the Board of Appeal let it have another go at proof of use and admit into the proceedings another 13 annexes. The EUIPO is not well known for being procedurally generous, but it does sometimes allow new evidence on appeal, including where it supplements evidence already filed.

With a lifeline thrown, McDonald’s did not make the same mistakes again, with its bolstered evidence allowing it to prove use for a range of goods and services in classes 29, 30 and 42, including “meat sandwiches” (a far less tasty way of describing a Big Mac).

For those on Evergreen watch, this is the registration McDonald’s just saved and this is one filed by McDonald’s while it was dealing with the non-use claim against the former mark at first instance.

10. Amazon tries to have, sell, ship and eat its cake – but there are consequences, holds the CJEU

Louboutin v Amazon Cases C-148/21 and C-184/21, Court of Justice of the EU (December 2022)

Louboutin has appeared frequently in Retromark in its quest to protect its red soled shoes. In this case, it battles the world’s largest online retailer, Amazon. The CJEU was called to consider Amazon’s liability for infringing articles sold on its platform by third parties. The referrals are a test of Amazon’s particular business model. Amazon sells its own products, but it also lets others sell their products on its marketplace. It sometimes blurs the line by shipping a third party product or providing some other service in relation to that product. In my experience of using Amazon, that blurring is deliberate as Amazon strives to offer a seamless service regardless of the particular arrangement for a particular product, the details of which I suspect few consumers care.

The CJEU has now ruled that Amazon can be held directly liable for infringements of its marketplace sellers. The best summary of the circumstances of that liability can be found by reading the bold paragraph at the end of the decision, provided you are sufficiently well versed in CJEU-speak.

My attempt at putting it into plain English is as follows: where an operator offers a hybrid marketplace for its own goods and those of others, and where the difference between the two is blurred together such that a reasonably observant consumer may not distinguish them, the operator can be held liable for the products of its third party sellers. It will be relevant where the operator (a) displays offers for its products and its sellers’ products in the same way side by side; (b) where it places its own logo on its sellers’ products as the distributor; and (c) where it offers to store and ship the goods of its sellers.

IPKat here.

***

Thanks to my colleagues Lisa Kingsbury and Eliza Jones 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
• Volume IX – November 2020 to May 2021
• Volume X – April 2021 to December 2021
• Volume XI – January 2022 to June 2022