CRYSTAL VAPE: Proving unregistered earlier rights

There is a sizeable dispute rumbling along in the High Court of England and Wales between a Chinese company (Shenzhen SKE Technology Ltd – “SKE”), which manufactures vaping products under the name CRYSTAL BAR and other signs including the word CRYSTAL, and a UK company that wholesales vapes (Bargain Busting Ltd – “BB”). 

The first reported judgment in the proceedings was an application for an injunction by SKE in infringement proceedings brought by BB ([2025] EWHC 1239 (Ch)), discussed below. 

The most recent decisions, and the subject of this post, are an appeal against the UKIPO hearing officer’s rejection of an opposition by  SKE against BB’s application to register CRYSTAL VAPE ([2025] EWHC 1629 (Ch)), and a subsequent costs decision ([2025] EWHC 1705 (Ch)). 

The case is both a salutary reminder of the sometimes brutal ‘first to file’ system in trade marks, as well as an example of how appeals to the High Court from to UKIPO decisions can become very expensive indeed. 

Background 

Despite the fact that SKE is the manufacturer of CRYSTAL-branded vapes, BB is suing SKE for infringement of its trade marks containing the word CRYSTAL, those being a mark registered for CRYSTAL CLEAR VAPOURS ELECTRONICS CIGARETTES and CRYSTAL ADDICT. 

BB acquired the former from a third party in September 2024, and the latter from another third party in January 2025. BB also applied to register CRYSTAL BAR as a trade mark on 10 May 2022 (the “CB Mark”), which was opposed by SKE under s.5(4) (i.e. relative grounds – passing off) and s.3(6) (i.e. bad faith). More on this later.

Understood to be the previous branding

On 21 January 2025, i.e. one week before BB acquired the CRYSTAL ADDICT Mark, SKE applied for an interim injunction preventing BB from writing to third party distributors and retailers of SKE’s goods. BB warned SKE it was going to do so unless SKE agreed to mediate, which it did but BB sent the letters anyway. 

Despite some creative reliance on Article 10 ECHR (the right to freedom of expression), and the related s.12(3) of the Human Rights Act 1998 (which changes the test to be applied when the court considers injunction applications where Article 10 is engaged), that injunction was granted against BB.

The opposition

Coming back to the CB Mark and the opposition to its registration, the matter reached the Hearing Officer in November 2024. In short, SKE relied on very limited evidence of use of CRYSTAL BAR and other CRYSTAL signs to support a s.5(4) argument that it could prevent the use of the mark in passing off. 

That evidence appeared only to consist of: 

• an invitation to the trade to visit a booth at the December 2021 ‘World Vape Show’, which did not in any case show the use of the words CRYSTAL BAR; 
• an application to the MHRA (a regulator) to permit the sale of its products; 
• a sales order for 30,000 units dated 28 March 2022 (i.e. around six weeks before the CB Mark was applied for) as part of a distribution agreement; 
• some marketing spend that appeared to post-date that application date; and 
• evidence that over 40 million of SKE’s vapes had been sold in the UK between 22 February 2022 and 22 November 2022 (but without distinguishing how many of those were before or after the relevant date). SKE accepted that no sales had been made to consumers by the relevant date.

Given the paucity of evidence of actual sales in the UK by SKE prior to the relevant date, the Hearing Officer rejected the opposition and allowed the CB Mark to proceed to registration. The Hearing Officer referred to the key decision on reputation outside of the jurisdiction but limited/no sales in it of Starbucks v BSkyB [2015] UKSC 31 at [66]. The "high point" of SKE’s evidence was the sales order, which this Kat thinks could well have been enough had there been further evidence of actual sales to consumers. The Hearing Officer reiterated that the trade mark system is generally “based on first to file”.

The bad faith ground was apparently poorly argued, with evidence attempted to be served too late. The attempt to rely on that evidence was refused, and the ground of attack appears to have fallen away.

The appeal

Michael Tappin KC, sitting as a Deputy Judge, heard the appeal to the High Court, which was brought on three grounds: an error in law (failing to consider goodwill among trade customers); the assessment of a lack of goodwill being “rationally unsupportable”; and a further error in law (failing to consider goodwill generated by pre-launch advertising).

All three grounds were rejected, leaving in place the Hearing Officer’s decision and the CB Mark. Tappin KC reiterated that appeals are reviews not rehearings, a point which has been made all the more clear following the Supreme Court’s decision in Iconix v Dreampairs [2025] UKSC 25. The ‘rationally unsupportable’ ground was dismissed firmly, holding that the decision “was not rationally insupportable – far from it” and that the Hearing Officer was well within her rights to consider the evidence as “extremely thin”.

The third ground (i.e. the relevance of pre-launch advertising) is interesting. The judge reiterated that the point was not resolved in Starbucks, but ultimately the point did not arise on the evidence. While evidence had been given of promotion to the trade, nothing had been given on promotion to consumers.

Costs

In a further decision on costs, BB applied for its costs on the indemnity basis (i.e. that any question of whether costs were reasonably incurred should be resolved in BB’s favour, leading to a higher level of recovery). This was important as BB had incurred a significant £123,916 on the appeal. That is of course no criticism, bearing in mind that SKE also incurred over £112,000. Both parties evidently threw a lot at this hearing.

BB understandably argued that as SKE would run the exact same arguments on s.5(4) (assuming it is permitted to do so) in the infringement proceedings, such that this appeal was “unnecessary, duplicative and wasteful” (the judge’s words, but assumably these are attributable to BB). The judge, however, felt that this did not take the matter out of the norm such that indemnity costs should be awarded. The judge also decided that the case did not warrant the London Band 1 category of solicitors’ costs, and that BB’s solicitors had spent too much time on the appeal. BB therefore obtained its costs on the standard basis, recovering £75,000, i.e. around 60%.

Takeaways

The appeal was plainly a side-show in a substantial wider dispute. It does feel somewhat duplicative of that main event, and it will be interesting to see if the court restricts SKE’s ability to rely on bad faith and an earlier right under s.5(4) against the CB Mark given SKE has already had a bite at those particular cherries.

As one of the parties’ solicitors pointed out on LinkedIn, SKE had the opportunity to appeal to the Appointed Person as an alternative to the High Court, and given the challenges that the appeal faced, a permission to appeal test might have rejected the appeal. It is understandable why it sought a High Court appeal, but it has paid a heavy cost (almost £200,000 including its own costs). Whether such a threshold would be desirable is a matter for another day. 

The big point for this Kat though is that, as the Hearing Officer said, trade marks are generally a first to file right. Anyone seeking to rely on an earlier right needs good evidence of sales. BB has been very tactical with its acquisition of third party marks, and quicker with filing for its own. SKE did not clear the way, nor did it try and register its own marks prior to launch or discussions with distributors, leaving it with a big challenge to preserve 'its' brand in the UK.