A u t u m n 2 0 1 4

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European Patent Attorneys • Chartered Patent Attorneys • Trade Mark Attorneys

Make Your Mark

iN THiS iSSUEUK COURT DiARY

Nestlé and Cadbury Shape up for Round Two in KitKat 3D Opposition

Gloom for glee Pole Chancer

Enterprise v Europcar Drives New Thinking on Survey Evidence

Whither the Collective Mark?Consider the Source:

Disclosure of Retail Suppliers in Wilko v BuyologyiN THE UK OFFiCE

Cadbury’s dream turns into a Swiss nightmare

NEWS

Snippets

EUROpEAN pERSpECTivES

In the end, Class 5 practice can be confusingThe scope of protection of black and white marks

is no rainbow (It’s not black and white either!)OUT AND ABOUT

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INTRODUCTION

iP law is about protecting ideas, and not just in the world of patents. Branding, too,

grows ever more creative as technology advances, and the law must keep pace in order to protect and reward innovation for the benefit of both market and consumers.

The CJEU’s recent affirmation that retail store lay-outs are registrable as trademarks (see page 23 of this edition of Make Your Mark) is a good example of how European trademark law is adapting to changes in commerce. The distinctive lay-out of Apple stores is well-known to consumers and was granted protection by the USPTO. In Europe, however, applications for the mark fared well in some member states, and badly in others. In Germany the Bundespatentgericht asked the CJEU to consider the inherent registrability of retail store lay-outs, and in reply the CJEU affirmed that provided the lay-out can be represented graphically and is capable of distinguishing the goods and services of one trader from those of another, there is no reason why it should not be registrable (Apple, Inc. v Deutsches Patent- und Markenamt, Case C-421/13).

UK COURT DIARY

As regular readers will remember, in the Autumn 2013 edition of Make

Your Mark (see “Snippets”), we reported Cadbury’s successful opposition to Nestlé’s UK trade mark application no. 2552692 for the shape of its four finger KitKat bar in respect of chocolate coated wafer biscuits.

To recap, the KitKat four finger shape was

refused by the UK Trade Mark Office for

all of the Class 30 goods claimed except

for “cakes and pastries” on the grounds

that:

(i) It was non-distinctive under Section

3(1)(b) of the Trade Marks Act 1994,

on the basis that although Nestlé had

filed significant amounts of evidence

of use, including survey evidence, this

did not prove that the consumer had

come to rely on the shape to identify

the origin of these goods; and

(ii) The shape fell foul of Section

3(2)(b) of the Act. In this case, the

shape was said to be functional, the

essential features being necessary

to obtain a technical result, rather

than being arbitrary, decorative or

imaginative.

Not surprisingly, Nestlé appealed this

decision to the English High Court,

Nestlé and Cadbury Shape up for Round Two in KitKat 3D Opposition

I s s u e N o . 3 4

disputing both grounds of rejection relied on by the Trade Mark Office. Cadbury cross-appealed the Hearing Officer’s decision to allow the application to proceed for registration in respect of “cakes and pastries”.

The appeal came before Mr Justice Arnold in January 2014 ([2014] EWHC 16 (Ch)). In his judgment, Arnold J. leaned towards Cadbury, although he accepted that the law on acquired distinctiveness and technical function was unclear. In view of this, he referred three questions to the CJEU, which we discuss in more detail below.

Arnold J. also held that the Hearing Officer, Mr Allan James, should have concluded that the KitKat shape was devoid of inherent distinctiveness for “cakes and pastries” and he accepted Cadbury’s argument that the fact that a shape is outside the norms and customs of a sector is not sufficient to endow it with distinctive character.

Turning to the issue of acquired distinctiveness, Arnold J. agreed with Mr James that consumers had not come to rely on the KitKat shape to confirm the authenticity of the goods. The Judge went on to state that the fact that

Jenkins Trade Mark Newsletter2

UK COURT DIARYNestlé and Cadbury Shape up... continued

Nestlé embossed each finger with KitKat amounted to a clear recognition that consumers do not rely on the shape but on the trade mark KitKat to identify the product. However, he agreed with Nestlé that the law on acquired distinctiveness was unclear as regards use of the mark as a trade mark. He commented: “does it require the applicant to show that, as a result of the use of the mark, consumers rely on the mark as a trade mark, or is it sufficient that consumers recognise the mark and associate it with the applicant’s goods?”

He therefore referred the following question to the European Court of Justice (CJEU) for a ruling:

“In order to establish that a trade mark has acquired distinctive character following the use that had been made of it within the meaning of Article 3(3) of Directive 2008/95/EC, is it sufficient for the applicant for registration to prove that at the relevant date a significant proportion of the relevant class of persons recognise the mark and associate it with the applicant’s goods in the sense that, if they were to be asked who marketed goods bearing that mark, they would identify the applicant; or must the applicant prove that a significant proportion of the relevant class of persons rely upon the mark (as opposed to any other trade marks which may also be present) as indicating the origin of the goods?”.

Arnold J. then moved on to the question of technical function and was again in Cadbury’s corner on this ground of appeal. The relevant paragraphs of Section 3(2) of the Trade Marks Act 1994 which were under discussion are reproduced below:

3(2) A sign shall not be registered as a trade mark if it consists exclusively of -

(a) the shape which results from the nature of the goods themselves,

(b) the shape of goods which is necessary to obtain a technical result,

Sections 3(2)(a) and (b) mirror Articles 3(1)(e)(i) and (ii) of The Trade Marks Harmonisation Directive (2008/95/EC).

Cadbury argued that “..it would be bizarre if a shape, one of the essential features of which resulted from the nature of goods themselves…. and the other two essential features of which were necessary to achieve a technical result…, could be registered simply because neither objection applied to all three essential features”.

Arnold J. thought this argument had “much to commend it, but I do not feel able to say that this interpretation of the Directive is clearly correct”. He therefore referred this second question to the CJEU:

“Where a shape consists of three essential features, one of which results from the nature of the goods themselves and two of which are necessary to obtain a technical result, is registration of that shape as a trade mark precluded by Article 3(1)(e)(i) and/or (ii) of Directive 2008/95/EC?”.

Nestlé also argued that the Hearing Officer’s decision to reject the shape under Section 3(2)(b), because some of its features related to the manner in which the goods were manufactured, was wrong. Again, Arnold J. concluded that the law in this area was not clear and referred the following third and final question to the CJEU:

“Should Article 3(1)(e)(ii) of Directive 2008/95/EC be interpreted as precluding registration of shapes which are necessary to obtain a technical result with regard to the manner in which the goods are manufactured as opposed to the manner in which the goods function?”

Comment

In the writer’s view, if the CJEU accepts Arnold J.’s position that, before a mark may proceed on the basis of acquired distinctiveness, an applicant must prove that it is both recognised and relied on by the average consumer as an indication of origin, shape marks, and other non-traditional marks, such as colour marks, will become virtually impossible to protect by registration in the EU. Whilst this may be good for competition, it is not so pleasing for brand owners, especially those who are targeted by counterfeiters.

Introduction continued

The Court confirmed that there is no requirement when applying for such marks by way of a graphic design to drill down to details of square footage and relative dimensions and proportions. Indeed, as Cadbury learned in the recent appeal relating to its application for the colour purple, there are traps for the unwary in saying too much. A picture may be worth more than a thousand words.

The Apple decision is very welcome. The economy thrives on consumer spending, and one way that shops encourage that is by creating distinctive, familiar environments where customers feel comfortable and want to buy. The recognition that shop environments can be distinctive and worthy of protection against lookalikes encourages retailers to develop recognisable physical environments and may ultimately give High Street shopping the boost it needs at a time when so much shopping is being diverted online.

This is not to suggest that the road to registration will be smooth in Europe for retail store lay-outs. Unless the elements of lay-out are notably different from what consumers normally encounter, evidence of acquired distinctiveness may well be needed. However, every case will be examined on its merits, and with more applications will come greater clarity as to where the bar is set on inherent registrability for such marks.

Of course, protection is only one part of encouraging innovation. The ability to enforce and defend IP rights is also critical. In this regard, it is encouraging to see that the Intellectual Property Enterprise Court (IPEC), a Court designed to provide access to justice for SMEs in IP matters, continues to grow and thrive. While litigation is and should be a last resort, nonetheless it greatly strengthens brand owners to know that they can if necessary bring or defend proceedings in a cost-effective forum. The IPEC is, in this respect, a great leveller.

Angela Fox’s new book, Intellectual Property Enterprise Court: Practice and Procedure, just out with Sweet & Maxwell, illuminates the Court’s procedures and explains how it can be used for the proportionate resolution of IP disputes, both smaller and larger. We hope that the Court will continue to go from strength to strength in enabling SMEs to leverage their IP rights, and thereby encouraging innovation from the other end.

Continued overleaf

Make Your Mark 3

UK COURT DIARY

A glee club is a musical group which traditionally specialises in the singing

of short songs – glees. The first such club is said to have been established in Harrow School in 1787. Over the next 100 years, glee clubs became very popular, both in the UK and the US. In the UK however, they were then superseded by choral societies. In the US, on the other hand, the term remains in use, particularly for choirs found in North American colleges and universities.

As if to prove the point, the tv network, Fox, created a television series called glee that focused on the fictitious William McKinley High School glee club, known as New Directions. Since its first broadcast in 2009, the series has become one of Fox’s most successful programmes, both in the US and in the UK, where it is now aired on the Sky 1 tv channel.

In the wake of the success of the

programme, concert tours featuring cast members have taken place, including two concerts in the UK in London and Manchester.

In 1994, fifteen years before Fox began broadcasting its first season of glee, Mark Tughan opened a comedy club called The Glee Club in the English city of Birmingham. It proved to be successful and, since that opening, further comedy clubs operating under The Glee Club banner have been opened in Cardiff, Nottingham and Oxford. These clubs offer both stand-up comedy, as well as live musical entertainment. The company operating these clubs, Comic Enterprises, owns a UK trade mark registration for a stylised form of the phrase, the glee CLUB, that was granted in April 2001 and covers inter alia “comedy services” and other music and entertainment related

services in Class 41.

It would appear that, as a result of the success of Fox’s tv series, and the nature of the subject matter of the programme, potential customers of The Glee Club were being put off attending those clubs because those (potential) customers believed them to be associated in some way with the glee tv programme. As a result, Comic Enterprises brought trade mark infringement and passing off proceedings against Twentieth Century Fox Films before the English High

Gloom for glee

In the present case, Mr James, at first instance, accepted that Nestlé’s survey evidence proved that the KitKat shape was recognised and associated with Nestlé by over 50% of respondents in the UK. Surely this level of recognition should be enough to prove acquired distinctiveness?

Shape marks are often used with other branding or are not seen until after the goods are purchased and unwrapped. In such circumstances, how will brand owners be able to demonstrate that consumers rely on the shape as an indication of origin? Would this see the English Courts having a road to Damascus moment regarding their reluctance to permit reliance on survey evidence?

Nestlé’s cause has not been helped by the fact that they had never shown the KitKat shape on the packaging of the goods until

a few months before filing the application in dispute. Further, there was no evidence of any KitKat advertising showing the shape of the product later than 1964. The lesson to be learned from this is that, if a brand holder wants to register a shape mark, they should promote it as a trade mark. A lot. The shape should be prominently shown on the packaging and emphasised in advertising. They must educate the public to recognise and rely on the shape as an indication of origin.

As regards the technical function objection, the Trade Marks Act and the Harmonisation Directive clearly state that only shapes “exclusively” dictated by technical function should be refused. If a shape is now to be

refused because “some” of its features are functional, we wonder how any shape would overcome this hurdle.

Shape marks ought not to be refused because of manufacturing considerations. Logic says that the manufacturing process must influence the shape of any mass produced product. If this becomes yet another factor to consider when assessing a shape’s distinctiveness under the “technical function” criterion, we doubt any shape will be accepted for registration. Should manufacturing concerns really matter? This KitKat lover did not realise or care that certain of its features were dictated by manufacturing restraints.

If the CJEU agrees with Arnold J., it will be a dark day for those brand owners who wish to protect their famous shape marks and Cadbury (whose parent, Mondelez, manufactures the famous triangular shaped, Toblerone chocolate bar) may then be seen to have scored a spectacular own goal.

Nestlé and Cadbury Shape up... continued

4 Jenkins Trade Mark Newsletter

UK COURT DIARYGloom for glee continued

Court. In response, Fox attacked Comic Enterprises’ UK trade mark registration both on the ground of descriptiveness (Section 3(1)(c) and Section 47(1) of the UK Trade Marks Act), given the dictionary meaning of glee club, and on the ground of five years non-use of the registered mark in the UK (Section 46 of the 1994 Act).

The Deputy Judge (Mr. Wyand QC) dealt first with the issues of invalidity and revocation. He found that glee club was now an obscure term in the UK that was little known. He also found that Fox had failed to establish the reaction of even the average choral singer in the UK to the phrase. That being the case, and noting that Comic Enterprises’ UK trade mark also contained a device element, Mr. Wyand dismissed the Section 3(1)(c) ground of invalidity (descriptiveness).

Turning to non-use revocation, the Deputy Judge decided that, based on the evidence before him, the UK trade mark registration under attack should survive for the following Class 41 services:

“Live comedy services; nightclub and cabaret entertainment; music hall services; provision of live and recorded music; dancing; provision of facilities for comedy and music entertainment; production and presentation of live shows and displays and the presentation of sound recordings”.

Moving on to trade mark infringement, Mr. Wyand was very taken by the evidence given by one of Comic Enterprises’ witnesses (Ms. Jones) who watched Fox’s glee programme and was also aware of The Glee Club. In her evidence before the Court, she maintained that she assumed a connection between the glee tv show and Comic Enterprises’ (The Glee Club) business when she saw a trailer for the tv show. There was also evidence given by consumers who began by being aware of the tv programme and on seeing, or hearing of, The Glee Club, believed that the latter was connected with the former. Mr. Wyand styled this as “wrong way round” confusion.

Bearing the above in mind, and finding

that

• Thetwomarksweresimilar;and

• ComicEnterprises’remainingClass

41 services were similar to the tv (and

concert) services provided by Fox in

the UK;

Mr. Wyand found trade mark

infringement under Section 10(2) of the

UK’s 1994 Trade Marks Act. In doing so,

he rejected Fox’s argument that people

who gave evidence about their reactions

after the show had become successful

could not shed light on whether or

not the average consumer would have

been confused (between The Glee Club

and glee) at the date Fox first used the

programme title (glee) in the UK. Mr.

Wyand commented that, if Fox could

have obtained convincing, consumer

evidence that, even after glee had become

a successful series, the relevant consumers

were not confused with The Glee Club, they

would certainly have been relying heavily

on that lack of confusion in this action.

As far as the ground of infringement

based on Comic Enterprises’ reputation

in The Glee Club was concerned (Section

10(3) of the 1994 Act), the Deputy Judge

took full account of the evidence which

suggested that potential customers had

been put off visiting The Glee Club because

they believed it was in some way associated

with Fox’s programme. That reaction,

in Mr. Wyand’s view, showed that such

(potential) customers were changing

their economic behaviour and that Comic

Enterprises’ mark was therefore suffering

detriment because of its “swamping” by

Fox’s use of glee. As Fox had no due

cause to use glee for either the tv show

or the associated concerts, a finding of

infringement under Section 10(3) became

inevitable.

Finally, dealing very briefly with the

passing off action, Mr. Wyand stated

that the damage suffered by Comic

Enterprises was caused by its (The Glee Club) venues being confused with Fox’s

tv show and its potential customers thereby being put off. There was little or no evidence that Fox’s use of glee constituted a misrepresentation. The only evidence, which suggested that it did, had come from Ms. Jones. All of the other evidence was on “wrong way round” confusion which was not the same as a misrepresentation. In the absence of a convincing case being made on misrepresentation, Mr. Wyand dismissed the passing off action.

Comment

According to the General Court case between Danjaq and Mission Productions (T-435/05), a film title (in that case Dr. No) is an indicator of artistic, but not commercial, origin and, as such, is not a trade mark. If that is the case, it seems difficult to explain how the use of an English dictionary word (glee), as the title of a tv series, can constitute use of the word in a trade mark sense. If EU trade mark law has reached a situation where use of (an ordinary dictionary word) in a non-trade mark sense can constitute trade mark infringement, then a serious rethink is urgently required by the necessary authorities. What next, an unauthorised book about the TV programme Friends, entitled Friends, being taken off the Amazon website, and the shelves of your local bookstore, prior to being pulped?

Finally, how can this decision be squared with the various Google keyword cases decided by the European Court? In those cases, it was found that Google was not using the third party owned trade marks in a trade mark sense and that therefore could not be found to have infringed the third party rights.

No doubt all of these issues will be resolved if and when Fox files an appeal at the Court of Appeal.

On a practical level, the key witness in the above case (Ms. Jones) was identified through social media (Twitter). This perhaps illustrates an important point about the use of such social media when attempting to find appropriate witnesses regarding a likelihood of confusion.

5 Make Your Mark

UK COURT DIARY

an exhibition in Blackpool in March

2013, and was then displayed at a later

exhibition in Cologne in April 2013.

Vertical claimed that it had goodwill in

both of the names X-POLE and SILKii at

the time of the Cologne exhibition (in

April 2013). Subsequent to that German

based exhibition, it (Vertical) applied to

register the sign SILKii as a trade mark in

August 2013. This application proceeded

to registration in November 2013.

On 12 April 2013, the second day of

the exhibition in Cologne, the second

defendant registered a number of domain

names containing the elements X-POLE

and SILKii. Further domain names,

containing similar terms, were registered

by Mr Bowley during the course of 2013.

In August 2013, Mr Bowley wrote to

Vertical offering to sell it various domain

names, as well as two Twitter accounts

containing the name SILKii. Vertical

refused to purchase the items offered and

instead commenced proceedings based on

trade mark infringement and passing off.

In respect of trade mark infringement,

Mr Bowley admitted registering the

domain names and offering to sell them

to Vertical. He claimed that he wanted to

“make some money” from the owner of

the X-POLE and SILKii trade marks. In

considering the application for summary

judgment against Mr Bowley based on

trade mark infringement, the judge

decided that he was unwilling to make

a decision without further argument.

However, in respect of the passing off

allegation, the judge found that Mr

Bowley had purposefully registered the

domain names to take advantage of the

goodwill enjoyed by Vertical and with a

view to obtaining an advantage from those

domain names by selling them back to the

trade mark owner. The judge therefore

Advising a client to bring an application for Summary Judgment is difficult. The

dividing line between whether a defendant has a real or “fanciful” chance of success is blurred, a claimant cannot rely solely on the evidence that it brings before the Court at the application. It is also subject to what might “reasonably be expected to be available at trial”, and, even where a case seems to be clear, simple and with agreed facts, case law states that a Court should “hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application”.

All in all, therefore, advice to clients must be to ensure that their case for a Summary Judgment application is fully supported by evidence, does not contain any surprises and, most of all, does not have any uncertainties which might move a defendant’s case from being merely “fanciful”, to having a “real chance” of success, or which might persuade a judge to consider that the defendant may be able to bring further evidence to full trial, which was not made available at the time of the application for Summary Judgment.

In the recent case of Vertical Leisure Limited v Poleplus Limited & Martin Bowley in the Intellectual Property Enterprise Court (“IPEC”), the claimant seemed to have an open and shut case. Vertical manufactured and sold pole exercise equipment and, in particular, poles for use by pole dancers (which this writer is given to understand is an increasingly popular form of exercise among the younger generation). Vertical owned a number of trade mark registrations containing the term “X-POLE”. This was a product that they had sold in the UK since 2004.

In 2013, Vertical launched a new pole, named “SILKii”. This was advertised at

had no difficulty in finding that Vertical was entitled to summary judgment against Mr Bowley based on passing off.

Bearing this in mind, therefore, and considering that Poleplus Limited (Poleplus) was a company under the control of a Ms Colebourne, the fiancee of Mr Bowley, that Mr Bowley was listed as a director of Poleplus at the time of its incorporation, that Mr Bowley was referred to as the “technical director” of that company, that Mr Bowley and Ms Colebourne were described as a “legendary team” on Poleplus’s website and that they both had access to each other’s emails and represented the company together at various events, it would seem that there was a fairly clear link between Mr Bowley as the second defendant and Poleplus as the first defendant. Surely, therefore, if the judge could easily find that Vertical was entitled to summary judgment against Mr Bowley, he could equally easily find that Vertical was entitled to summary judgment against the first defendant (Poleplus)?

Apparently not. For the judge to be able to find this, it would have been necessary for Vertical to have shown that Poleplus was a joint tortfeasor with Mr Bowley. Unfortunately, counsel for Vertical did not even mention the possibility that Poleplus was a joint tortfeasor until filing skeleton arguments. Similarly, the skeleton arguments filed by Vertical introduced a claim of vicarious liability against Poleplus due to the activities of Mr Bowley. As with the arguments relating to joint tortfeasorship, however, the arguments based on vicarious liability were not included in the original Particulars of Claim.

As the case stands, therefore, it appears that it will proceed to trial purely to

Continued overleaf

Pole Chancer

UK COURT DIARY

6 Jenkins Trade Mark Newsletter

determine the liability of Poleplus, simply because Vertical did not ensure that its application for Summary Judgment was watertight. As the judge stated, this seems to be a very unsatisfactory state of affairs. It is also interesting to note that the judge dropped some fairly elephantine hints to both parties that they should consider settlement or at least that Vertical and Poleplus should consider making Part 36 offers to preserve their respective positions.

Comment

From this writer’s point of view, it seems to be fairly astounding that the defendants were advised to continue with the case. Having admitted purchasing the domain names (and apparently some Twitter accounts) in order to sell them to Vertical “to make some money”, it seems clear that, following the case of BT v One in a Million, at least in respect of passing off, Mr Bowley was always going to be caught by an application for Summary Judgment. Poleplus can perhaps breathe a brief sigh of relief that the case against it was not properly

made out at the Summary Judgment stage. However, unless settlement is reached, it seems almost certain that Vertical will win against Poleplus at full trial.

As suggested by the judge, the defendants really should consider whether discretion in this case might be the better part of valour.

We all thought that we knew where we stood on survey evidence in the

UK. Following the Interflora cases and the Zee Television case, it seemed clear that the ability of parties to rely on survey evidence would be significantly restricted in future Court proceedings. The English Courts seemed determined to act as a “gatekeeper” to proceedings, requiring parties to obtain leave to submit pilot and full surveys.

Now the case of Enterprise Holdings Inc v

Europcar Group UK Limited and Europcar

International SASU [2014] EWHC 2498

(Ch) has raised the question of whether

a pre-existing survey (obtained for use

in corresponding OHIM proceedings),

and a pre-existing pilot survey (obtained

for use in the proceedings before the

Court) could be adduced as evidence, and

whether a full survey, based on the pilot,

could additionally be carried out and

brought before the Court.

In the UK, trade mark infringement

proceedings were brought by Enterprise against Europcar. Enterprise relied on a number of earlier UK trade mark and CTM registrations for a stylised letter e, see, for example, CTM registration no. 5323126. Europcar counterclaimed for revocation of two of the UK registrations on the ground that they had not been used. At the same time, Enterprise had opposed a CTM application (no.11342649, see the logo at the top of page 7) for another stylised letter e, filed by Europcar, on the basis of its earlier CTM registrations. Again, the opposition led Europcar to apply for the revocation of some of Enterprise’s CTM registrations on the basis that they had not been put to genuine use.

So why then was survey evidence needed? And should it be allowed? On the basis that this seems, from the outside, to be a straightforward infringement case, the average reader might be forgiven for thinking that the survey was intended

to show consumer confusion, or the

possibility of consumer confusion. As the

two companies involved in the dispute

are both engaged in the car hire/car

rental business, one would have been

forgiven for thinking, bearing in mind

previous judgements of the English

Court, that survey evidence would not

be permitted in this case - the car hire

business not being the most specialised

area of commerce in the world. Further,

one would have thought, a commercial

area that was entirely within the judge’s

sphere of personal knowledge. But no,

in this case Enterprise was not seeking

to adduce evidence of confusion, but

rather to demonstrate that its marks

enjoyed an enhanced level of distinctive

character. That being the case, all the

rules which seemed to have been set

down by the Interflora and Zee cases seem

not to have applied in the Enterprise case

or, at least, were applied in a slightly

different manner. The judge (Morgan

Enterprise v Europcar DRIveS New ThINKING ON SURveY evIDeNCe

Pole Chancer continued

UK COURT DIARY

7 Make Your Mark

J) referred to a recent CJEU case, Oberbank (C-217/13) in which it was stated that “the law does not preclude the competent authority, where it has particular difficulty in assessing the distinctive character acquired through use of the mark in respect of which registration or a declaration of invalidity is sought, from having recourse, under the conditions laid down by its own national law, to an opinion poll as guidance for its judgment”, and to the judgment of Lewison LJ in the Interflora 1 case in which he specifically stated that, when considering survey evidence, and its admissibility, “...different considerations may come into play where... the issue is whether a registered mark has acquired distinctiveness”.

It is clear, therefore, that although we had all thought that survey evidence would now be far more difficult to adduce into proceedings, this is only the case where a judge is asked to consider consumer confusion, and so is able to take the place of the consumer him or herself. However, when the judge is being asked to consider whether a mark has an enhanced level of distinctive character, then he or she is far more likely to turn to or allow survey evidence to assist in reaching a decision.

So at what level will survey evidence be admitted? In the present case, Enterprise attempted to argue that the “gatekeeper” test for determining whether

Enterprise v Europcar... continued

survey evidence should be allowed into proceedings should be lower when considering the distinctiveness of a trade mark, rather than when considering consumer confusion. The judge dismissed this view but highlighted a further differentiation, in commenting that although the test might be the same, the result of applying the test might differ, depending on the subject matter of the survey.

In a consumer confusion case, a judge may consider him/herself easily capable of considering whether there is likely to be confusion between two trade marks both used for everyday items, whereas that same judge might not consider him/herself capable of making a decision as to enhanced distinctive character in respect of the same everyday items, as this would imply a detailed knowledge of a particular consumer area. Further, the judge commented that although a confusion survey would involve the public predicting what might happen (which he/she would be equally capable of doing), a distinctiveness survey would require evidence of what had actually happened, which the judge is unlikely to know without specialist evidence as to the facts. This latter point then also fits in with the second part of the Interflora 1 test, ie, whether the survey is likely to be of value to the proceedings.

On the above basis, and having considered some objections raised to the questions in the survey, the judge allowed all of Enterprise’s requests to adduce survey evidence.

Comment

Where does this leave us on survey evidence? The judge has helpfully highlighted the fact that although the test for adducing all types of survey evidence into proceedings may be the same, the result of the test may differ depending on the subject matter of the survey. This appears to leave open the possibility of subtle differences being introduced into the way in which survey evidence is considered by the Courts. The judge in this case drew attention to the Interflora 1 case, which specifically stated that “different considerations” relating to survey evidence could come into play in different circumstances. The test of whether a mark had acquired distinctiveness was one of these (different circumstances), as well as “spontaneous reactions”, “amplifying evidence”, “specialist goods” or “passing off”.

It is therefore clear that the law on the introduction of survey evidence into proceedings is far from settled. Lewison LJ, in Interflora 1, has already given us the above five additional types of case when the “usual” rules may not apply. Added to that are the considerations of the CJEU case in Oberbank, which would additionally appear to leave the door open for further argument that survey evidence should be allowed in the door, rather than being left outside.

UK COURT DIARY

8 Jenkins Trade Mark Newsletter

Whither the Collective Mark?

Traders own trademarks, associations own collective marks. The former

distinguish the goods of one trader from those of another, the latter the goods of members from those of non-members. So the conventional thinking goes. In fact, however, the law has been evolving since the introduction of collective marks at UK and Community level in 1994, and a recent decision of the Intellectual Property Enterprise Court (The National Guild of Removers and Storers Ltd. v Milner [2014] EWHC 670 (IPEC) ) casts doubt on the continuing role of collective marks in the brand landscape.

The clear view emerging is likely to be welcomed by associations facing the choice between trademark protection and the more onerous requirements of collective mark registration.

The Guild and Its Marks

The claimant was a trade association of businesses in the removal and storage area. Its logo was a registered UK trademark (no. 2425258), and membership entailed permission to use the Guild’s logo in advertising.

The defendant (Mr Milner) was a former member of the Guild who, after his membership came to an end, continued to use the Guild’s logo in advertising. The Guild sued for trademark infringement and passing off.

Mr Milner counterclaimed for revocation and invalidity of some of the Guild’s trademark registrations on the basis that they had been applied for in bad faith, because the marks were always intended to be used as collective marks, denoting membership of an association, rather than as trademarks. Consequently, the Guild’s declarations on the two application forms

that there was a bona fide intention to use the marks as trademarks was therefore false. Moreover, Mr Milner cast aspersions on the claimant’s motives, noting that filing for trademarks instead of collective marks had allowed the claimant to evade the additional collective mark fees and the drafting and filing of regulations governing use of the collective marks.

As the marks had always been used as collective marks rather than as trademarks, the defendant further submitted that the claimant’s registrations were also vulnerable to cancellation for non-use.

Collective Marks, Reconsidered

The UK-IPO’s published practice since 2001 had been to object to applications to register the same mark as both a trademark and a collective mark in the same ownership.

Dual status would mean that the mark could not be regarded as capable of distinguishing goods or services of members of an association from those of non-members, since it was also to be used to distinguish trade origin as an ordinary trademark. The same mark in use as both a trademark and a collective mark would, moreover, be liable to deceive the public as regards the character or significance of the mark.

Since the IPO’s practice was published in 2001, however, the Courts have been busy giving nuance to the formerly clear distinction between what trademarks and collective marks signified. Notably, in Scandecor Development AB v Scandecor Marketing AB ([2002] FSR 7), the House of Lords observed that “when [consumers] see goods to which a mark has been affixed, they understand that the goods have been produced either by the owner of the mark or by someone else acting with his consent.”

This recognition of modern licensing practices and consumer expectations was, while not directly on the point, important in the IPEC’s findings in National Guild v Milner. The judge considered that “the direction of travel” in the development of trademark law in the world of modern commerce meant that trademarks still carried out a trademark function if they indicated that goods or services were produced by someone licensed to use the mark. Hitherto this had been the preserve of collective marks. Now, however, there was little to distinguish them.

In this case, the Guild contended that it had filed for the marks as trademarks rather than collective marks in good faith. It gave evidence that it had contacted the IPO before filing the applications explaining how the marks were to be used, and that based on the IPO’s advice it had filed for trademarks. The Guild’s evidence was that it knew nothing of collective marks and would have followed whatever advice the IPO had given, and that the additional fee for collective mark registration would not have deterred it had the IPO recommended that course of action. It did not, however, and the Guild therefore

UK COURT DIARY

9 Make Your Mark

Consider the Source: Disclosure of Retail Suppliers in Wilko v Buyology

Where a retailer sells an infringing product, that is rarely the end of

the trail. The product normally comes from somewhere else, and that source may be supplying others as well. Squashing a single retailer, or even multiple retailers, may not stifle the problem. How best, though, to get at the ultimate source when all one has to go on is the seller at the end of the chain?

The issues surrounding disclosure of sources by a retailer were considered recently in the IPEC in Wilko v Buyology. The judgment tells a cautionary tale to those seeking such relief, and heeding it may improve the odds of success.

wilko Says “No”

Wilko is a retail chain with a registered trademark for WILKO with effect in the

Continued overleaf

Whither the Collective Mark? continued

applied for the marks as trademarks.

Based on this evidence, the judge declined

to find that the Guild had acted in bad

faith when filing the applications.

Moreover, since, in the Court’s view, use of

the marks to denote the goods or services

of licensees, even non-exclusive licensees,

was use of a trademark (as opposed to

merely being collective mark use), the

defendant’s non-use challenge also failed.

Comment

Reading this judgment gives the strong feeling that collective marks have outlived their usefulness.

The judge himself found “it hard to think of a circumstance in which an association entitled to apply for a collective mark could not avoid the cost and inconvenience” of paying the collective mark fees and drafting regulations governing use “by applying instead for a trade mark.” However, “whatever the legislative intent at the time of drafting, the view on how

a trade mark may be used has been updated and has altered.”

In some ways this is a bold decision since, as the judge noted, the conclusions drawn rendered the statutory provisions relating to collective marks “largely pointless”. However, those provisions were drafted before the House of Lords decided Scandecor and the law of trademarks has, in line with modern commerce, moved on.

It would be premature to declare collective marks moribund on the back of this single decision, albeit at High Court level. However, the reasoning in it is persuasive, and there is good reason for associations now to reconsider their options when looking to protect elements of branding. Collective mark protection is more onerous and costly to secure than trademark registration, and there seems little in fact to distinguish between what trademarks and collective marks actually signify in trade. This decision suggests that associations should have little to fear in applying for simpler and cheaper trademark

protection instead. The development of commerce and the law is on their side.

This decision should be welcomed by trade and industrial bodies, chambers of commerce, clubs and other associations with names and logos that members are permitted to use in marketing their own goods and services. For those who have not protected these elements of branding, now is the time to evaluate whether and how best to protect them.

For those who have protected collective marks already, now is a good time to review the portfolio and to consider whether additional, and perhaps broader, trademark protection may also be advisable.

Whither collective marks, then, following this decision? There is no indication that they are going away. But they may now be entering their sunset years. The dusk for them is, however, the dawn for others, and associations may benefit from increased opportunities for trademark protection in respect of licensed branding.

UK. It discovered that Buyology, another

retailer, was distributing unauthorised

WILKO branded goods in its (Buyology’s)

shops.

Following an exchange of correspondence,

Wilko issued proceedings for trademark

infringement. Buyology filed a defence

admitting infringement and undertaking

to cease sales of the infringing goods.

However, Buyology refused to divulge

the identity of its trade sources, despite

admitting having been offered the

infringing goods since the proceedings

were issued.

But So Does the Court

Wilko went to Court, asking the IPEC to

make a Norwich Pharmacal order requiring

Buyology to disclose its trade sources. The

Court, however, refused.

The Court accepted that it could make

orders requiring retailers such as Buyology

to disclose trade sources of infringing

goods under Norwich Pharmacal principles.

The Court also accepted that the fact that

the original infringement claim did not

seek such (Norwich Pharmacal) relief did

not, on its own, prevent the Court from

granting it later on following Wilko’s

further application.

Instead, what sank Wilko was the fact that it

did not adequately particularise its request

for Norwich Pharmacal disclosure in its

later application. In particular, it did not

satisfy the Court that if the order were not

granted, Wilko would suffer irreparable

UK COURT DIARY

10 Jenkins Trade Mark Newsletter

harm arising from infringing goods still making their way to the marketplace.

On the other hand, the Court was persuaded that granting the order could do irreparable harm to Buyology. The retail community was small and close-knit, and if Buyology disclosed the names of its suppliers those companies might resent being investigated to establish whether they were mixed up in the commission of a tort. This was likely to have long-term commercial repercussions on Buyology.

Essentially, the Court sought to balance the competing interests of the parties: that of Wilko in vindicating its rights and preventing the establishment of a secondary market in its goods, and that of Buyology in protecting its relationships with its suppliers. Had Wilko demonstrated that there were no, or limited, alternative supply chains for the infringing goods, the Court might have accepted that there was a serious likelihood that the infringing goods would continue to surface and cause irreparable harm to Wilko despite the sales through Buyology having stopped. However, there was no evidence that the goods might still make it to the marketplace and the Court was not prepared to act on an inference of irreparable harm to Wilko based on these facts, as opposed to the clear likelihood of irreparable harm to Buyology if the order were granted.

Buyology had promptly given the undertakings required to settle the proceedings as issued in the original claim form, conduct which the Court approved. It was clear that no further sales of the infringing goods would be made through

Buyology. There was no evidence of the

nature and extent of likely continued sales

of the infringing goods through other

channels if the disclosure were not given,

and the Court declined to draw inferences

in Wilko’s favour.

Comment

In general, defendants who admit the sale of infringing goods should not expect the sympathy of the Court where orders to disclose their suppliers might damage commercial relationships. The defendants in such cases typically have only themselves to blame, and the need to ensure that IP right holders can enforce their rights is an important factor.

Yet, it is clear from this judgment that there are cases where judicial sympathies might be stirred by other factors such as a defendant’s admissions and preparedness to give prompt undertakings, particularly where these are combined with a lack of evidence that the absence of an order would do irreparable harm to a claimant.

Having said that, though, this is in some ways an odd decision, and it might just as easily have gone the other way. Although Wilko gave no evidence that the suppliers to Buyology would find another outlet to the market now that Buyology had undertaken to cease use, that result might reasonably be inferred. If a supplier can no longer sell to one customer, it will look to sell to another. Infringing goods within the supply chain were likely to be unloaded somewhere, and the Court might just as reasonably have inferred that such a natural result supported a finding that Wilko should get its order on the basis that without it, it would not be able to vindicate its rights.

The importance of this decision lies in its reminder that Norwich Pharmacal orders are a form of equitable relief, and that, as with other forms of injunction, the Court will seek to balance the interests of the parties to secure a just result. It may not be enough, therefore, simply to argue that a brand owner should be told the identity of suppliers so that it can enforce its rights. It may be necessary to go further and to satisfy the Court that failure to make the order will result in irreparable harm because those goods will in fact find another market outlet if the order is not made.

Evidence that there are in fact other retailers who would sell the goods, and that the quantities involved are sufficient that the harm caused by their distribution would be substantial, are likely to be relevant factors. The extent to which this can be proved will inevitably vary, however, since a claimant will not always have much information about the goods and the extent of the harm they would do if they made it to the marketplace unless and until the order for disclosure is made. It is, essentially, a chicken and egg situation, but a claimant must do its best to satisfy the Court that the order is just based on the information to which it does have access. This applies as much in the IPEC, where recoverable costs are limited, as it does in the rest of the High Court, although the limited costs recovery (before IPEC) may temper the extent of the evidence that it is necessary to compile.

In this case, the Court considered that the claimant could have tried harder. The outcome is a salient reminder that brand owners seeking equitable relief must do their homework, and do it diligently, before coming to Court.

Consider the Source:... continued

iN THE UK OFFiCE

11 Make Your Mark

Cadbury’s dream turns into a Swiss nightmare

in July 2011, the Swiss company, Goldkenn SA, applied to register the trade mark

SWISSDREAM for goods in Class 30 including “confectionery and ices”.

Cadbury dream is a white chocolate bar and ice cream, that was launched in 2002. Between 2002–2007, miniature versions of this product also appeared in Cadbury’s Heroes assortments.

This was the Cadbury chocolate bar wrapper in 2002.

Since 2003, the wrapper has looked like this.

Cadbury dream was not one of Cadbury’s top selling products. Sales of Cadbury dream chocolate bars during a 12 week period in 2002 were £11.7m, but this had declined to annual sales of £0.88m by 2011 (accounting for 1.62m units). Ice cream sales between 2007-2011 were over £2m. By contrast, UK sales of Cadbury Dairy Milk chocolate bars were worth £418m in 2010 and the UK chocolate confectionery market as a whole was valued at £3.6 billion in the same year.

Cadbury opposed Goldkenn’s trade mark application and relied on four UK trade mark registrations. These were:

- CADBURY DREAM (words) registered for “chilled desserts, puddings, mousses, yoghurt, fromage frais” in Class 29 and “chilled and frozen confections and desserts” in Class 30.

- registered for “chocolate, chocolates, non-medicated confectionery; preparations made from cereal, biscuits, cakes, wafers; snack foods; ice cream and ice cream products, chilled and frozen confections and desserts” in Class 30.

- CADBURY’S DREAM (words), including the disclaimer “registration of this mark shall give no right to the exclusive use of the word “Dream”, registered for “chocolate, chocolates, and non-medicated confectionery, but not including ice-cream confections” in Class 30.

- registered for “chocolate, chocolates, non-medicated confectionery, chewing gum, biscuits, cakes, ice cream and frozen confections” in Class 30.

This final mark was the wrapper used for the individual chocolate sweet within the Cadbury’s Heroes assortment from 2002 until at least May 2007.

The grounds for opposition were that:

(i) SWISSDREAM is similar to the above mentioned, Cadbury owned, earlier marks, the goods for which these earlier marks are registered are either identical with or similar to the goods covered by Goldkenn’s trade mark application and there is a likelihood of confusion (Section 5(2)(b)); and

(ii) use of SWISSDREAM in the UK would amount to passing off at common law (Section 5(4)(a)).

In response, Goldkenn put Cadbury to proof of use of all four marks.

Goldkenn also showed in their evidence:

(i) that the word “dream/dreamy” is used by other manufacturers in relation to food items including chocolate;

(ii) the recent drop in sales of Cadbury dream products compared to sales of other Cadbury products; and

(iii) Cadbury’s inaction against other marks consisting of or including the word “dream” such as Chocolate dream for non-medicated confectionery.

The Hearing Officer, Mr Allan James (deciding yet another Cadbury opposition), accepted that the trade mark CADBURY(’S) DREAM was distinctive. However, he disagreed with Cadbury that the word dream alone was distinctive of them.

A number of factors were relevant in reaching this conclusion:

• salesofCadbury dream had declined throughout the 5 year period ending in 2011;

• therehadbeenverylittlepromotionof Cadbury dream in the 5 years

Continued overleaf

iN THE UK OFFiCE

12 Jenkins Trade Mark Newsletter

leading up to the relevant date;

• saleswereonlyatinyfractionofthe £3.6 billion UK chocolate confectionery market and the UK market for ice cream;

• CadburyitselfregardedCadbury dream as a niche product;

• Cadburywasnottheonlyuserofdream as of the relevant date;

• Alltheopponent’suseofdreamwas in conjunction with the well known house mark Cadbury(‘s) and in association with particular blue/cream packaging designs;

• Therewasnodirectevidencethatanyone regarded dream alone as distinctive of Cadbury’s products.

Mr James concluded that consumers didn’t need to rely on the word dream to select Cadbury dream chocolate and ice creams. It was only “weakly distinctive” and was descriptive for confectionery. Whilst a significant number of consumers would regard dream as a secondary trade mark, a significant proportion would, by contrast, have been aware that the word was simultaneously being used in a laudatory fashion.

Mr James then considered the proof of use put forward by Cadbury and concluded that the opponent had shown use of the trade mark Cadbury dream in relation to “chocolate covered ice cream” and their registered (non-Heroes) chocolate bar wrapper in respect of “chocolate bars”.

The Hearing Officer then moved on to the matter of similarity and likelihood of confusion.

Mr James held that Cadbury could not rely on their earlier UK trade mark registration for CADBURY’S DREAM, because of the disclaimer in respect of the word “dream”.

The strongest Cadbury mark was said to be CADBURY DREAM. However, the Hearing Officer held that this mark was not confusingly similar to SWISSDREAM. According to Mr James whilst, on the one

Cadbury’s dream turns into a Swiss nightmare continued

hand, there was

- a “modest” degree of visual and aural similarity between the two marks; and

- a “relatively high level of conceptual similarity”, given the shared “dream” meanings;

on the other hand,

- “dream” was only “weakly distinctive” of Cadbury for chocolate covered ice cream as a result of the use made of Cadbury dream;

- the similarity of concept (dream) was not a distinctive one;

- SWISSDREAM didn’t include the Cadbury house mark; and

- the word “Swiss” was conjoined with the word “dream” rather than being used as a separate descriptor in relation to the mark “Dream”.

Mr James concluded from this that the presence of dream was most likely to be seen by consumers as “no more than a coincidence”.

Turning to the second ground of opposition, Cadbury failed to persuade Mr James that use of SWISSDREAM would amount to passing off. There was no misrepresentation or likelihood of deception, two key aspects of the passing off test.

Cadbury’s customers or potential customers would not regard SWISSDREAM chocolate confectionery as a Cadbury product because (i) of the absence of the Cadbury house mark and (ii) Cadbury has no reputation in Swiss chocolate, and so the word “Swiss” would not trigger an association with Cadbury.

Mr James was at pains to acknowledge that, whilst putting a house mark in front of a distinctive mark is often insufficient to avoid confusion, it was enough in this case because the word “dream” is only weakly distinctive of Cadbury. Even if SWISSDREAM had been written in a handwritten style, like the Cadbury

dream script, Mr James doubted that a substantial number of Cadbury’s customers or potential customers would assume an economic connection between SWISSDREAM and the opponent (Cadbury).

Comment

It is submitted that the correct decision was made here. “Dream” is a limping trade mark. Cadbury didn’t own a registration for DREAM per se nor did it use “dream” without its famous Cadbury(’s) house mark. Perhaps more importantly, Cadbury filed no direct evidence which proved that consumers only associated “dream” with itself for chocolate bars or ice cream.

This case is also interesting in that it shows how evidence can be used to discredit an opponent’s alleged goodwill and reputation in its earlier mark and also to show that a common element of both parties’ marks has little distinctiveness, so less weight should be placed on it when making a global appreciation assessment.

Jenkins represented Goldkenn in this opposition.

How a trade mark is used by its owner, and perceived by the relevant public, can have a major impact on both registered and unregistered rights in the mark. This basic tenet of trade mark law and practice has been confirmed in two recent decisions.

In the first case (Greyleg Investment v BR IP Holder; O-146-14), Greyleg applied to register the trade mark Hokey Pokey in the UK for “ice cream frozen yoghurt” in Class 30. The application was opposed by BR IP on the basis of its associated company’s (Baskin Robbins’) use of the identical mark in the UK in respect of ice cream since 1997 (Section 5(4)(a) Trade Marks Act 1994).

The case hinged upon the nature of Baskin Robbins’ use of the trade mark Hokey Pokey. The evidence showed that, since its introduction in the UK in 1997, it had been used in advertising materials as the name of an ice cream flavour alongside more traditional names such as mint chocolate chip, banana and vanilla. As a result, although there was no evidence filed that pointed to Hokey Pokey actually being the natural name for an ice cream flavour, the Hearing Officer found that Baskin Robbins had never used Hokey Pokey as a trade mark (or source indicator) but merely as a type of ice cream flavour. It followed that the opponent (BR IP) had no goodwill in Hokey Pokey that they could rely on and that their opposition under Section 5(4)(a) failed.

It seems that Hokey Pokey is, according to Nigella Lawson (no less), a Cornish term for honeycomb. This turns out to be the precise nature of Baskin Robbins’ (Hokey Pokey) ice cream. It remains to be seen whether they (Baskin Robbins) will now accept the descriptive nature of the term and seek to cancel Greyleg’s UK trade mark right for Hokey Pokey on absolute grounds. It is even possible that Baskin Robbins could take complete umbrage and seek to cancel Greyleg’s earlier UK trade mark registration for Hokey Pokey covering “confectionery” in Class 30, as well as their later UK trade mark right (if granted) covering “frozen yoghurt”.

Finally, the writer has also noted that BR IP’s opposition to Greyleg’s CTM application for Hokey Pokey covering “confectionery” in Class 30 was also unsuccessful (see Appeal No. R1091/2012-4), albeit on the usual technical, OHIM ground that all of the evidence filed was from the opponent and was therefore not to be trusted (or, in OHIM speak, had “no probative value”).

In the second case (Backaldrin Österreich The Kornspitz Company v Pfahnl Backmittel; C-409/12), the mark at issue was Kornspitz.

Backaldrin owned an Austrian trade mark registration for Kornspitz for, amongst other goods, “flour and preparations made from cereals; bakery goods; baking agents; pastry confectionery, also prepared for baking; pre-formed dough… for the manufacture of pastry confectionery” in Class 30 (the Backaldrin goods). They (Backaldrin) produced a baking mix and sold it, under the trade mark Kornspitz, to bakers. Backaldrin had done this for 30 years. The bakers in turn produced a bread roll which had a particular shape (oblong with a point at each end). These bread rolls were then sold as Kornspitz rolls.

However, the evidence before the European Court showed that

• BackaldrinconsentedtotheuseofitsKornspitz trade mark by the bakers and foodstuff distributors supplied by the bakers;

• Neitherthebakersnorthedistributorsinformed the Austrian end consumer that Kornspitz was a registered trade mark or that the Kornspitz bread rolls were prepared using Backaldrin’s Kornspitz branded baking mix. Thus, although the bakers and distributors knew about Backaldrin’s ownership of the trade mark Kornspitz, end consumers were not made aware of the trade mark nature of Kornspitz or of Backaldrin’s registered monopoly in the mark.

Pfahnl, a competitor of Backaldrin, applied to revoke the latter’s Austrian trade mark registration for Kornspitz under

Section 33b of the Austrian Trade Marks Act, the equivalent of Article 12(2)(a) of the Trade Mark Harmonisation Directive (2008/95/EC), which is in the following terms:

Article 12(2)…a trade mark shall be liable to revocation, if, after the date on which it was registered:

(a) in consequence of acts or inactivity of the proprietor, it has become the common name in the trade for a product or service in respect of which it is registered;

The Cancellation Division of the Austrian Patent Office allowed the revocation action on the Section 33b/Article 12(2)(a) ground for all of the Backaldrin goods listed above. Backaldrin appealed to Austria’s Supreme Patent and Trade Mark Court. The Court seemed clear that a distinction should be made between the raw materials and intermediate products (e.g. baking mix), that was supplied to bakers and foodstuff distributors, and the bakery goods (e.g. bread rolls) that were purchased by end consumers. In the former case, it seemed clear that the bakers and foodstuff distributors were aware of the trade mark status of Kornspitz. In the latter case however, it was possible, though not certain, that end users saw Kornspitz as a common name for such bakery goods. In these circumstances, the Austrian Court put three questions regarding the interpretation of Section 33b/Article 12(2)(a) to the European Court for a ruling.

The questions posed were

1. Has a trade mark become “the common name (in the trade) for a product or service” within the meaning of Article 12(2)(a) Directive 2008/95/EC, where

a. although traders know that the mark constitutes an indication of origin they do not generally disclose this to (end users), and

b. (inter alia) on those grounds, (end users) no longer understand the trade mark as an indication of origin but as the common name for goods or services in respect of which the trade mark is registered?

2. Can the conduct of a proprietor be regarded as “inactivity” for the purposes of Article 12(2)(a) of Directive 2008/95 simply if the proprietor of the trade mark remains

NEWS

Snippets

13 Make Your Mark

Continued overleaf

inactive notwithstanding the fact that traders do not inform customers that the name is a registered trade mark?

3. If, as a consequence of acts or inactivity of the proprietor, a trade mark has become the common name for (end users), but not in the trade, is that trade mark liable to be revoked if, and only if, end consumers have to use this name because there are no equivalent alternatives?

The European Court responded to these questions as follows:

a. Article 12(2)(a) of Directive 2008/95 must be interpreted as meaning that, in a case such as that at issue in the main proceedings, a trade mark is liable to revocation in respect of a product for which it is registered if, in consequence of acts or inactivity of the proprietor, that trade mark has become the common name for that product from the point of view solely of end users of the product.

b. Article 12(2)(a) of Directive 2008/95 must be interpreted as meaning that it may be classified as “inactivity” within the meaning of that provision if the proprietor of a trade mark does not encourage sellers to make more use of that mark in marketing a product in respect of which the mark is registered.

c. Article 12(2)(a) of Directive 2008/95 must be interpreted as meaning that the revocation of a trade mark does not presuppose that it must be ascertained whether there are other names for a product for which that trade mark has become the common name in the trade.

It follows that, when considering the possible genericism of a trade mark in the EU, the perception of end consumers appears to be decisive. If such end users think that a mark is in fact the common name for the product then it, almost certainly, is and any trade mark registrations (for the mark) are in grave danger.

Further, even though Backaldrin did not directly deal with the purchasers of Kornspitz bread rolls, it was their (Backaldrin’s) responsibility to ensure that the registered trade mark nature of Kornspitz, in relation to bakery products, was passed onto such purchasers by the bakers and foodstuff distributors that they supplied with Kornspitz raw materials (baking mix).

The fact that there was no generic name, other than Kornspitz for the well-known, oblong shaped bread rolls, did not affect the matter either way. It was Backaldrin’s failure to regulate the activities of the traders supplied with Kornspitz raw

materials that was at the heart of the matter. This constituted “inactivity” within the meaning of Article 12(2)(a) and had possibly led to the position where the purchasers of Kornspitz bread rolls thought that they were buying a type of bakery product rather than branded goods.

As any in-house practitioner will tell you, it can be a constant battle to prevent one’s marketing colleagues from reaching marketing nirvana, namely persuading the general public that a trade mark is not merely an indicator of source but the name of the product itself. The above two cases, particularly the Kornspitz case, will add just a little to the legal argument. Whether it will be more persuasive than earlier examples of trade marks that died a generic death such as Dry Ice, Escalator and Linoleum is, of course, a moot point.

It will also be interesting to see if the European Court’s Kornspitz ruling leads to revocation actions being brought against registered trade marks such as Biro, Catseye, Formica, Frisbee, Hula Hoop, Jacuzzi, Jet Ski, Memory Stick, Plasticine, Tarmac or Velcro.

More on use, in particular trying to prove genuine use of a trade mark in OHIM opposition proceedings. A recent General Court case featuring two Romanian based producers of alcoholic beverages (European Drinks v SC Alexandrion Grup Romania) has succeeded in muddying one of the few areas of CTM practice that had seemed relatively clear and predictable.

Alexandrion applied to register three Dracula Bite logos at OHIM in respect of inter alia alcoholic beverages in Class 33. All three CTM applications were opposed by European Drinks on the basis of an earlier Romanian trade mark registration for a stylised form of the word Dracula (see the top mark on this page) also protecting alcoholic beverages in Class 33.

The opponent’s Romanian registration had been granted in 1995, so Alexandrion asked them to prove use of their mark in Romania during the five year period prior to the publication of their CTM applications (all published on 23 November 2009). European Drinks produced the following evidence of use:

• Copies of six invoices (written in Romanian) issued by a company called Scandic Distilleries to a Romanian wholesaler, SC TGIE, during the period 2 February 2009 to 24 April 2009. Each invoice bore the wording V. DRACULA

and was for 432 unidentified products. In other words the invoices showed the sale of 2592 such products.

• A copy of a photograph of part of a bottle bearing a different stylised form of Dracula to that registered (see the lower mark on this page).

• A copy of a promotional text, written in Romanian and English relating to vodka Dracula, the second word being in the same stylised form as the bottle in the photograph. How, when or where this promotional material was issued was not explained by the opponent.

This evidence was not enough to convince the Opposition Division that genuine use of the registered (Romanian) mark had been established and, as a consequence, they rejected all three of European Drinks’ oppositions. The opponent filed three appeals. The Fourth Board of Appeal dismissed them all, again on the basis that genuine use had not been established. According to the Board of Appeal:

The six invoices presented, the only documents which are dated, covering a period of only two and a half months and each indicating a sale of 432 units of the products in question bearing the name of the earlier mark, did not demonstrate genuine use during the reference period and did not reflect the sale and distribution of the products on the market to the end consumer. Further, no information had been supplied as to the identity of the companies mentioned in the invoices, or on the link established between them and the applicant. Furthermore, the photograph of a bottle and the promotional text showed a use of the earlier mark in a form which significantly altered the distinctive character of the sign and the verbal element “Dracula” set out on the invoices and on the promotional text did not make it possible to determine whether it referred to the sign as used or as registered. Finally, the applicant had not submitted sufficient information on the frequency, regularity, territorial scope and volume of the sales.

European Drinks appealed again to the General Court (T-495/12 to T-497/12) but to no avail. The Court was as unsympathetic

NEWSSnippets continued

14 Jenkins Trade Mark Newsletter

Continued overleaf

NEWSSnippets continued

to the opponent’s arguments as the earlier Tribunals had been. In the Court’s view:

• The relationship of the distributor of Dracula vodka (Scandic Distilleries) and the opponent had not been clarified and there was nothing filed by European Drinks to establish that Scandic’s use of the Dracula mark was with their (European Drink’s) consent or that the use had been outward and public.

• The use shown by the opponent was, having regard to the size of the relevant market, small in quantity and did not establish the presence of the opponent’s mark on the Romanian market.

• The fact that the opponent’s six invoices had dates that were close together and related only to a short period that was close to the publication date of the three opposed CTM applications could not entirely exclude the possibility of a purely token use of the earlier mark.

• It would not have been difficult for the opponent to obtain further evidence of use and there was nothing in the documents before the Court to show that the opponent claimed that it was impossible to supply such further evidence, particularly of the extent of use.

It followed that the opponent had not established genuine use of its mark in Romania and that all three appeals were dismissed.

Whilst it is hard to be sympathetic with European Drinks, given the paucity of their evidence, and whilst it is certainly arguable that their mark in use was too different to their registered mark to count as genuine use of the registered mark, there are certain aspects of these cases that are hard to reconcile with earlier case law, in particular the Vitafruit opposition (The Sunrider Corp v Juan Espadafor Caba; T-203/02). In that (Vitafruit) case, there was also little or no evidence that the sales of the opponent’s fruit juices were with the consent of Mr Espadafor Caba. However, in that Court ruling, the sensible position was taken that, since the opponent could produce invoices evidencing sales of Vitafrut juices, it could be inferred that such use was with the consent of Mr Espadafor Caba. So, whilst it would have been extremely easy for European Drinks to show that they are a sister company of Scandic Distilleries (see, for example, the homepage of the website www.europeanfood.ro, where the position is explained), it would also have been sensible for the General Court (and the Board of Appeal) to have inferred from the mere production of the six invoices that consent had been established.

As to the Court’s findings on the extent of use shown by European Drinks of its Dracula mark in Romania, these should be contrasted with the same Court’s findings in the Vitafruit case. In that earlier (Vitafruit) case, the opponent produced ten invoices dated within the relevant five year period. The dates were spread over eleven months and the invoices showed delivery of 3516 bottles of concentrated fruit juice at a cost of 4800 euros. So the average monthly sales of fruit juice by Mr Espadafor Caba were less than half than the average monthly sales established by European Drinks of its vodka. The only differences were the relative lengths of the periods of sales established and the fact that, in the Vitafruit case, the sales were somewhat before the publication date (5 January 1998) of the opposed CTM application, whilst in the European Drinks opposition, the sales were only 7 to 10 months before the date of publication. However, in the European Drinks case, one of their invoices was dated before the filing date of the opposed CTM application, whereas, by contrast, in the Vitafruit opposition, all of the invoices were dated after the opposed application’s filing date. So, which smacks the more of token use? Certainly, the fact that, over five years after the dates of Scandic Distilleries’ invoices, Dracula vodka is still available at their website (www.scandicdistilleries.ro) suggests that their use of the trade mark Dracula is (and was) far from token, as does the fact that this vodka also seems to have been on sale at the website as far back as January 2008 (see Internet Archive).

So, what are the lessons to be learned from the Dracula Bite oppositions? First and foremost, it is a mistake to rely on precedent in cases before OHIM. Second, it is a mistake to seek to prove genuine use with just a few invoices dated within a short period, particularly if that period is soon before the opposed CTM applicant’s publication date. If that is all there is, then you will have to hope and pray that the Tribunals have a Vitafruit, rather than a Dracula Bite, day. However, if there is more, then you should use the Dracula Bite cases to press for the sort of evidence that was certainly available to European Drinks but was never filed.

It would seem to the writer that European Drinks should now allow the Dracula Bite CTM applications to proceed to grant and, in the meantime, start putting together the evidence that they should have collected in the first place. Then, once Alexandrion’s CTMs are granted, the opponent should seek to cancel all three rights.

The difficulty of overcoming an opposition at OHIM on the basis that the two marks actually coexist on the EU market has once again been illustrated in the case of Asos plc v Roger Maier (T-647/11).

Asos is a UK-based, on-line retailer of fashion and beauty products operating on a global basis through its website www.asos.com. Its sales for the financial year up to August 2013 were reported to be £754 million. It has websites targeting France, Germany, Italy and Spain, as well as the UK. Further, it distributes its products in over 200 other countries from its distribution centres in the UK.

Mr Maier is the CEO of Assos of Switzerland, a Swiss company that sells cycling related clothing and accessories under the Assos trade mark, again on a worldwide basis.

Asos filed a CTM application on 30 June 2005 to protect its house mark for goods and services in Classes 3, 18, 25 and 35. Roger Maier opposed relying on a later filed CTM registration for Assos which claimed a valid Swiss priority date of 14 June 2005. Mr Maier’s CTM registration protected goods in Classes 3, 12 and 25.

Asos filed a significant amount of market data showing that Asos products coexisted with Assos cycling goods in 18 EU countries, although much of this evidence post-dated their June 2005 filing date. This evidence of coexistence did not persuade the Opposition Division to rule in their (Asos’) favour however. They rejected the opposed CTM application for the vast majority of the goods and services claimed. As to the claim of coexistence, the Opposition Division commented that Asos had failed to show that EU consumers were used “to seeing the marks without confusing them”.

Asos appealed and, on a straight comparison of the marks and the goods/services, the Fourth Board of Appeal allowed the appeal for a narrow range of Class 18 goods including a variety of bags, cases, wallets and purses. For everything else, the appeal was rejected. In relation to Asos’ evidence of coexistence, the Board first noted that this was exclusively based on information generated by Asos itself, rather than from independent sources. Under OHIM practice, this is a cardinal sin ensuring that the evidence, no matter how copious and wide-ranging, is ignored. Further, agreeing with the conclusions of the Opposition Division, the Board noted that Asos’ evidence did not “allow any conclusions as regards the absence of any likelihood of confusion between the marks”.

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Then the Board turned one of Asos’ arguments in favour of registration against them. The CTM applicant had pleaded that their goods and services were aimed at different consumers to those who bought Assos branded goods. This, the Board commented, implied that the two marks were not present in the same market which suggested that there was, in fact, no real coexistence. When this was added to Assos’ evidence that they (Assos) had challenged the registration of the trade mark Asos in the UK, the Board had no difficulty in finding that there was no peaceful coexistence in the EU. (As an aside, Asos does own a UK trade mark registration for the trade mark Asos in a wide variety of Classes including Classes 3 and 25. This UK registration recently (largely) survived an invalidation action brought by Assos of Switzerland, based on its earlier trade mark rights in Assos (2014 (EWHC) 123 (Ch)). The English High Court (Rose J.) found that there was no real risk of confusion between the marks and that the use of the Asos trade mark would not take undue advantage of, or be detrimental to, the distinctive character and repute of the trade mark Assos. No doubt this decision will be appealed).

Returning to the dispute before OHIM, Asos plc appealed to the European (General) Court. Once again they relied quite heavily on their evidence of coexistence in 18 countries of the EU market. Entirely predictably, the General Court rejected the appeal agreeing with the Board’s assessment of the similarity of the two marks and of the goods and services that were similar and those that were dissimilar.

As far as the evidence of market coexistence was concerned, the Court made the following, thoroughly depressing statements:

• Itisapparentfromsettledcase-lawthatitcannot be entirely ruled out that, in certain cases, the peaceful coexistence of marks on the market could reduce the likelihood of confusion found by the decision-making bodies of OHIM to exist. However, that possibility can be taken into consideration only if, at the very least, during the proceedings before OHIM concerning relative grounds for refusal, the party applying for the Community trade mark duly demonstrated that such coexistence was based on the absence of any likelihood of confusion, on condition that the earlier marks concerned and the marks at issue are identical (emphasis added).

• TheBoardofAppealconcludedthatthe

items of evidence provided by the applicant, consisting in two declarations from the head of its legal department should be rejected, observing that they emanated from the applicant itself and were not supported by any additional information originating from independent sources. That finding by the Board of Appeal must be upheld. It is apparent from case-law that a declaration originating from the applicant itself cannot be attributed probative value unless it is corroborated by other items of evidence.

• Moreover,theBoardofAppealalsoactedcorrectly in holding that those items of evidence did not permit any conclusion to be drawn so far as concerns the absence of a likelihood of confusion. First, the items of evidence provided by the applicant relate only to the use of the trade mark applied for and do not concern the manner in which the relevant public was exposed to the marks at issue on the market. Second, the applicant relies on evidence of the peaceful coexistence of the marks at issue on the market in 18 Member States only. Where the earlier mark is a Community trade mark and, consequently, the relevant territory for the assessment of the likelihood of confusion comprises the European Union in its entirety, an alleged coexistence in part of the territory of the European Union does not have the effect of excluding a likelihood of confusion in the European Union as a whole (emphasis added).

Once again, the Court pays lip service to a possible way forward for a CTM applicant but then, by setting an utterly impossible evidential standard, ensures that it will never be achieved. First, it seems that evidence of peaceful coexistence can only have an effect when considering identical marks. This is such nonsense that, not for the first time, one despairs. Second, in order to run a successful argument on peaceful coexistence one has to prove it, through independent (presumably survey) evidence, in all 28 countries of the EU, including Cyprus and Malta. Not easy if the opponent only sells its products in most, though not all, of the EU. If that were not enough, what one has to prove in all of those countries is that the relevant consumers are not confused by the two marks at issue. Has the Court ever given any thought as to how precisely one would prove such a negative? In 28 countries!

Let the writer suggest an alternative scenario. The argument of coexistence should be valid for similar, as well as identical, marks. In fact, the argument should usually carry more weight in relation to similar marks. Actual

market coexistence on much, though not all, of the EU market should be highly persuasive. The absence of any evidence of actual confusion from the opponent should also be compelling. Finally, properly sworn evidence from the CTM applicant, unless convincingly contradicted by the opponent, should carry as much weight as evidence taken from independent sources. Of course, none of this will ever happen. However, one is entitled to dream.

We have noted in previous editions of Make Your Mark that the UK Trade Mark Office can take an extremely strict view on how different a mark that is in use on the UK market can be to the mark as registered, in order to resist a non-use revocation action (under Section 46 of the Trade Marks Act 1994). The decisions in the Catwalk and Alfad cases, see Make Your Mark Autumn 2012 and Spring 2013, illustrate the point.

To those harsh judgements can now be added the ruling in the revocation action between The Mentholatum Company and Multibrands International Limited (O-232-14). Multibrands owned two UK trade mark registrations (nos. 2316187 and 2324905) for stylised versions of the trade mark Lip-Ice (with a hyphen), one (UK 2316187) in colour, the other (UK 2324905) in black & white. UK 2316187 was registered for “cosmetics” in Class 3, whilst UK 2324905 covered”treatments for chapped and dry, cracked lips in the form of sticks”.

In April 2013, Mentholatum brought non-use revocation actions against both of Multibrands’ UK trade mark registrations. The registered proprietor produced evidence of sales of lip balm stick in the UK but under the trade mark Lipice (without a hyphen or a space between the words Lip and ice). In every case, the mark was written in white

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lettering with a coloured background, including a red background (the Strawberry Touch product).

Under Section 46 of the UK Trade Marks Act, use of a trade mark that differs “in elements which do not alter the distinctive character” of the mark, as registered, also counts as use of that registered mark. The registered proprietor argued that use of the mark without a hyphen should count as genuine use of the registered mark (with a hyphen). The applicant to revoke argued that, on the contrary, the position of the lower case “ice” next to the letters “Lip” gave the impression of a single word, rather than two words separated by a hyphen, as in the UK trade mark registrations. This difference, according to Mentholatum, changed the nature of the mark and therefore the evidence of use filed by Multibrands should not save either of its trade mark registrations.

The Hearing Officer (Ms Pike) sided with Mentholatum and revoked both UK trade mark registrations. In her view, Lipice (without a hyphen or a space) created the visual impression of a single, invented word. Further, according to Ms Pike, the mark in use might be pronounced Lipeece or Lip-ice. In the Hearing Officer’s view, if the (Lipice) mark were seen, there would be no concept attributable to it nor, if it were spoken as Lipeece, would it have a recognisable meaning. Only if it were referred to as Lip-ice would the phonetic use coincide with the mark as registered (with a hyphen). This led to the finding that “…unless an unnatural dissection process takes place”, the average consumer would not pick the words Lip- and -ice out of the used mark Lipice. An argument that, when spoken, Lipice would constitute use of Lip-Ice (stylised) was dismissed since, in the Hearing Officer’s opinion, this would allow the use of marks such as Isle and Right to save registrations for marks such as Aisle and Write.

On this basis, the revocation actions succeeded and both of Multibrands’ UK trade mark registrations were revoked (under Section 46(1) of the UK Trade Marks Act).

The Hearing Officer in the Lip-Ice case (Ms Pike) is the same Hearing Officer who revoked UK trade mark registrations for CATWALK and ALFAD on the basis that use of the stylised version of CATWALK shown and of AlfaD (capital A and D only) did not save the two UK registrations for marks that were filed entirely in capital letters. See Continental Shelf 128 v Dosenback-Ochsner (a decision confirmed on appeal) and Teva Pharmaceutical Industries v Cytochroma Development.

Whilst the writer has a certain sympathy with the view that the trade mark Lipice is somewhat different to the trade mark Lip-Ice (stylised), this view should surely be tempered by the fact that Lipice is used in respect of “lip balm”. In these circumstances it is extremely hard to believe that Lipice would not be seen as, and also pronounced as, Lip Ice. So, on balance, the writer would say that Multibrands has been rather hard done by.

An appeal can be expected to this decision. Not only have Multibrands’ (now revoked) two UK trade mark registrations been relied on in a cancellation action brought by them (Multibrands) against Mentholatum’s later filed CTM registration for LIP ICE in Classes 3 and 5 but also both Multibrands and Mentholatum sell competing Lipice and Lip Ice products, at least in the UK.

The latest attempt by Red Bull to monopolise the word Bull for non-alcoholic drinks (Leidseplein Beheer v Red Bull, C-65/12) raised an interesting issue relating to the effect of prior use of a mark by an alleged infringer in trade mark infringement actions.

The well-known, Austrian based producer of Red Bull energy drinks owned an International trade mark registration (no. 477624) designating the Benelux for Red Bull Krating Daeng & Bull Device covering inter alia non-alcoholic drinks. (Krating Daeng is the name of the Thai energy drink upon which Red Bull is based). This IR(BX) registration has a priority date of February 1983.

Mr. De Vries, the principal behind Leidseplein Beheer, had been using the trade name The Bulldog in the Benelux in respect of hotel, restaurant and café services, such services including the sale of drinks, though not energy drinks, since a date prior to February 1983. Mr de Vries owned three Benelux trade mark registrations for word and word & device marks consisting of or containing the phrase The Bulldog covering, amongst other goods and services, non-alcoholic drinks. These Benelux registrations were

dated July 1983, December 1999 and June 2000. The latter two registrations claimed energy drinks. This was to protect Mr. de Vries’ sale of an iced coffee drink that is available in the Benelux (see the website www.thebulldog.com).

Whilst Red Bull appears to have accepted Mr. de Vries’ earlier “The Bulldog” activities, they took exception to his energy drink and, in June 2005, they brought trade mark infringement proceedings before the Amsterdam District Court against Mr. de Vries’ sale of energy drinks (based on their Benelux registration for the Red Bull Krating-Daeng mark). Red Bull relied in part on their reputation in the Red Bull Krating-Daeng mark in the Benelux and the claim that Leidseplein Beheer was using it’s The Bulldog trade mark (in respect of energy drinks) without due cause and taking unfair advantage of, or causing detriment to, the distinctive character or the repute of Red Bull’s trade mark (Article 5(2) of the Trade Marks Harmonisation Directive (now 2008/95/EC)).

In response, Mr. de Vries argued that he did have due cause to use his trade mark (The Bulldog) given that he had been using it in the Benelux in respect of related services, including the sale of drinks other than energy drinks, since a date prior to the priority date of Red Bull’s Benelux registration and before Red Bull had acquired a reputation.

The Amsterdam District Court dismissed the infringement action. Red Bull appealed. The Amsterdam Regional Court of Appeal largely upheld the appeal. In the Appeal Court’s view, the trade mark Red Bull Krating-Daeng had a reputation (for energy drinks) in the Benelux and, given the similarity of the two marks, the relevant public “would make a connection between (Red Bull’s) trade mark and (Mr. de Vries’) sign, even if the two were not mistaken for each other”. Mr. de Vries was therefore “riding on the coattails” of Red Bull’s reputation in their Red Bull Krating-Daeng trade mark. The fact that Mr de Vries’ use of the trade mark The Bulldog was a continuation of his pre-1983 use of that mark was not seen, by the Appeal Court, to constitute due cause for allowing the use of that sign (for energy drinks).

Mr. de Vries appealed to the Dutch Supreme Court claiming that a too restrictive interpretation of the concept “due cause” had been made by the Appeal Court. The Supreme Court sought guidance from the European Court of Justice on the “due cause” issue. They asked the following question:

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“Is Article 5(2) of the Harmonisation Directive to be interpreted as meaning that there can be due cause within the meaning of that provision also where the sign that is identical or similar to the trade mark with a reputation was already being used in good faith by the third party/parties concerned before that trade mark was filed?”

Before the European Court, Mr. de Vries argued that “due cause” should include the use, in good faith, of a sign that is similar to a mark with a reputation, in the case where that sign was being used before that mark (with a reputation) was filed. Red Bull, by contrast, argued for a very limited interpretation of the phrase and that it only covered a situation where the alleged infringer could show “objectively overriding reasons” for his choice of mark. They (Red Bull) also argued that the acceptance of Mr. de Vries’ position would result in the recognition of unregistered marks in the Benelux, a jurisdiction where the protection of marks is based exclusively on registration (rather than use).

The European Court rejected Red Bull’s submission on “objectively overriding reasons” and seemed more persuaded by Mr. de Vries. The Court commented, for example, that

“In the present case, it is not disputed that Mr. de Vries uses the sign “The Bulldog” in relation to hotel, restaurant and café goods and services which include the sale of drinks. Consequently, in the light of the recognition enjoyed by that sign among the relevant public, and, in the light of the nature of the goods and services for which it has been used, the sale of energy drinks contained in packaging which displays that sign may therefore be perceived, not as an attempt to take advantage of the repute of the mark “Red Bull”, but rather as a genuine extension of the range of goods and services offered by Mr. de Vries. That impression would be strengthened even further if the sign “The Bulldog” was used for energy drinks before the mark “Red Bull Krating-Daeng” acquired its reputation.

Secondly, the greater the repute of the sign used, prior to the registration of a similar mark with a reputation, for a certain range of goods and services, the more its use will be necessary for the marketing of a product identical to that for which the mark was registered, a fortiori as that product is close, by its nature, to the range of goods and services for which that sign was previously used.”

On that basis, the Court answered the Dutch Supreme Court’s question as follows:

“…the proprietor of a trade mark with a

reputation may be obliged, pursuant to the concept of “due cause” …, to tolerate the use by a third party of a sign similar to that mark in relation to a product which is identical to that for which that mark was registered, if it is demonstrated that that sign was being used before that mark was filed and that the use of that sign in relation to the identical product is in good faith. In order to determine whether that is so, the national Court must take account, in particular:

• Howthatsignhasbeenacceptedby,andwhat its reputation is with, the relevant public;

• Thedegreeofproximitybetweenthegoodsand services for which that sign was originally used and the product for which the mark with a reputation was registered; and

• Theeconomicandcommercialsignificanceof the use for that product of the sign which is similar to that mark.”

It will now be for the Dutch Supreme Court to put flesh on the bones of this ruling and to decide whether or not Mr. de Vries’ prior use of The Bulldog for related services should allow him to continue to sell his The Bulldog energy drink, even though that (energy drink) use began well after the reputation of the Red Bull energy drink was established in the Benelux.

To the writer, the European Court’s position on “due cause” makes good sense. In any EU jurisdiction, where an alleged infringer has been using his trade mark since prior to the acquisition of trade mark rights by the registered trade mark owner, he should be allowed to continue to use that mark for the same, and perhaps similar, goods and services, provided the use is in good faith. Whether it is good faith for the seller of non-energy drinks in hotels, restaurants and cafes to extend his trade into the energy drink sector, thereby competing directly with Red Bull, might be a tricky issue to decide except for one fact that seems to have been played down in this case. That is, would a Benelux moron in a hurry, even one high on alcohol and caffeine really mistake Mr. de Vries’ The Bulldog brand for that of Red Bull or even, once sober, connect The Bulldog with Red Bull? In the writer’s view, the answer is a resounding no. However, this is Red Bull and, for reasons best known to the EU trade mark authorities, including OHIM, they, along with a limited number of other companies, appear to receive extremely generous treatment when the extent of their trade mark rights is being considered.

You own trade mark rights in a formerly successful brand. However, the heyday of the brand was back in the 1970s and any use was phased out during the 1980s. Even though you still own registered EU trade mark rights in the mark, they are unenforceable because of the lack of any recent use. In these circumstances how do you deal with a third party seeking to monopolise the mark for identical goods? According to the General Court case (T-327/12) between Simca Europe and Peugeot Citroën, a bad faith action might be the answer.

Simca, standing for Société Industrielle de Mécanique et Carrosserie Automobile, was a French car manufacturer that was founded by Fiat in 1934. For a period after the Second World War, Simca became one of the biggest producers of automobiles in France. The Simca 1100 was for some time the best selling car in that country whilst other Simca models won the European Car of the Year award in 1976 and 1978. Soon after that, following a number of takeovers which eventually lead to Simca being owned by Peugeot Citroën, the Simca brand was replaced by the Talbot marque. Peugeot Citroën did however retain some registered trade mark rights in the Simca name including a French registration and an International registration designating Austria, Benelux, Germany and Spain.

Nearly 30 years after the Simca brand had disappeared from the market, a German individual, Mr. Joachim Wöhler applied to register the trade mark Simca for a wide range of Class 12 goods, including motor vehicles, in Germany. Mr. Wöhler followed this up with a CTM application for the same mark, again in Class 12. Both applications proceeded (unopposed) to grant and both were subsequently assigned to a UK based company, Simca Europe Limited.

Peugeot Citroën sought to cancel both registrations on the ground that they had been filed in bad faith. Whilst the cancellation action before the German Patent Office appears to have been rejected, Peugeot Citroën, after an initial

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with the view that, in making his original CTM application, Mr. Wöhler had intended to free-ride on the Peugeot Citroën’s reputation in the Simca trade mark. The appeal was therefore dismissed and the cancellation of the CTM registration was confirmed.

This is an odd decision. A decision that seems to have been made based on a ground of cancellation that had not been run by Peugeot Citroën, namely that Mr. Wöhler intended to trade unfairly off the reputation of the applicant to cancel’s reputation in the trade mark Simca. The only difficulty with that ground was that Peugeot Citroën did not run it because they had no use of the trade mark Simca to sustain their earlier trade mark registrations and because their remaining reputation in the trade mark (Simca) is, after more than 30 years non-use, receding faster than a souped-up Simca motor car.

Further, how this decision can be squared with earlier European Court decisions on bad faith, such a Carrols v Gambettola (T-291/09), in which two identical (and quite complex) device marks were at issue, is hard to explain. Bad faith is therefore yet another area of trade mark practice where rulings are unpredictable and, in many cases, a coin to try to predict the final outcome would be a useful implement.

Given the rather contentious nature of the Simca case, it would be no surprise to see the case appealed further.

Twenty years ago, the hot topic in UK trade mark practice was the issue of look-alikes, the habit of the overly powerful supermarkets that operate in this country paying “tribute” to highly successful consumer products by taking various aspects of the leading products’ get-up, though never its word mark. See, for example the Virgin Cola soft drink and the Puffin chocolate biscuit cases.

You might have thought that this issue had died a quiet death, although, if you ever visited a UK supermarket, you would know that it hadn’t. Confirmation that look-alikes are alive and kicking here comes from the Moroccanoil case (Moroccanoil Israel v Aldi Stores) recently heard by the Intellectual Property Enterprise Court (IPEC; His Honour Judge Hacon).

Moroccanoil Israel Limited (MIL) sells a successful range of hair care products called Moroccanoil in the UK and elsewhere. The key ingredient of MIL’s goods is argan oil which is produced from the kernels of the argan tree that is endemic to Morocco. Some of the Moroccanoil products are sold in a striking,

turquoise coloured packaging with the trade mark Moroccanoil written vertically in white lettering and a large letter M appearing in the colour orange. The hair treatments themselves are contained in brown bottles.

The success of MIL’s hair care range attracted the attention of the cut price supermarket, Aldi, who began selling a competing argan oil product, called Miracle Oil, at about 20% the price of Moroccanoil.

Aldi’s range of hair care products also had a turquoise coloured pack, together with the words Miracle Oil written vertically in orange letters. It also featured the word Carino written in a white script. The bottle containing the liquid preparation was brown and similar in shape and size to that of MIL’s bottle.

MIL brought passing off and trade mark infringement actions before IPEC. The infringement case was stayed because the CTM registrations relied on by MIL were the subject of invalidity proceedings before OHIM (see below). The passing off case went forward to a decision however.

MIL argued that they owned goodwill in not only the trade mark Moroccanoil but also in the overall get-up of their packaging. As a result, according to MIL, a substantial number of UK consumers would, because of the various similarities between the get-up of Moroccanoil and that of Miracle Oil, mistake Aldi’s hair care range for MIL’s range or assume that the two sets of goods either came from the same manufacturer or had some other trade connection. MIL’s case was hindered considerably however because they were unable to produce any evidence whatsoever of a consumer being deceived by Aldi’s activities.

MIL also argued, relying on Arnold J’s comments in Och-Ziff Management v OCH Capital, that even initial interest confusion would constitute passing-off. In this case,

disappointment, had more success before OHIM.

Before the OHIM Cancellation Division, Peugeot Citroën’s bad faith action was rejected. The Cancellation Division took the view that, even though Mr. Wöhler had provided freelance, software related services to the applicant to cancel and, on the evidence before the Tribunal, had been aware of the history of the Simca brand when he filed his CTM application, such knowledge was not, on its own, enough to establish a bad faith case under Article 52(1)(b) of the CTM Regulation

Peugeot Citroën appealed and the First Board of Appeal took an entirely different view. The Board was persuaded to cancel Mr. Wöhler’s (by now assigned to Simca Europe’s) CTM registration on the basis that

• The trade mark Simca still retained a certain reputation in respect of motor vehicles at the date the cancellation action was filed.

• The original registered proprietor had shown his awareness of the Simca brand during correspondence with Peugeot Citroën.

• Mr. Wöhler had sought compensation from the applicant to cancel in return for the surrender of his CTM registration.

• The original CTM proprietor was seeking to free-ride on the reputation of Peugeot Citroën by his deliberate, unlawful use of the sign Simca.

• The decision of the German Patent Office in favour of Mr. Wöhler in the related German cancellation proceedings would not affect the outcome of proceedings before OHIM.

The fact that the CTM registration under attack had subsequently been assigned to Simca Europe did not affect the issue. The new proprietor had to accept the consequences of the original trade mark applicant’s actions. Equally irrelevant to the outcome were the vulnerability of Peugeot Citroën’s registered trade mark rights to non-use attack and the fact that Mr. Wöhler has been selling Simca branded electric bicycles since December 2008. In the former case, according to the Board, Mr. Wöhler should have applied to revoke Peugeot Citroën’s Simca registrations, in the latter case, the subsequent use of a mark did not justify the original bad faith filing.

Simca Europe appealed to the (European) General Court but to no avail. In agreeing with all of the points relied on by the Board of Appeal, the Court was particularly taken

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rejected, the action against the word mark succeeded on the basis that Moroccanoil is descriptive for all of the Class 3 goods claimed (principally hair care and skin care products). MIL’s attempt to prove acquired distinctiveness foundered on the nature of their use of Moroccanoil with other elements, in particular a large letter M. All three of these decisions are subject to appeal.

Even if MIL succeeds in overcoming the rejection of its CTM for Moroccanoil, the writer seriously doubts that it will allow them to prevent the sale of Aldi’s Miracle Oil range (or Avon’s Moroccan Argan Oil product) in the UK.

What would really have helped MIL in both cases would have been a trade mark registration for the striking turquoise colour of their packaging. However, the time that elapses between a product becoming successful and a supermarket (or other competitor) launching a lower priced, lookalike is usually so limited that it is not enough to establish the necessary acquired distinctiveness in a single colour mark in the UK, let alone in the whole EU (as unreasonably required by the CTM authorities).

The other course that is open to the manufacturers of consumer products is to register the get-up of their packaging, but without the word or letter elements, as a design. A Community Design might well have strengthened MIL’s case against Aldi in particular, given the many similarities between the packaging of Moroccanoil and Miracle Oil. Unfortunately (for MIL) that particular horse now seems to have bolted.

By contrast with the CTM proprietor’s inability to sustain its registration for Moroccanoil on the basis of acquired distinctiveness, one of the best known price comparison companies in the UK was recently able to resist an attack by one of its competitors on precisely that basis.

The case (BGL Group v Gocompare.com), an opposition before the UK Trade Mark Office, featured two British companies who have run some of the most original tv advertising campaigns since commercial television began broadcasting in the UK in the 1950s.

The (UK) trade mark applicant, BGL Group, is the owner of the comparethemarket.com website which offers information on the cost of third party insurance, especially car insurance, products. In a crowded market, a non-distinctive phrase such as Compare The Market could easily get lost. However, in 2009, this difficulty was brilliantly overcome,

MIL argued, a potential consumer would spot Miracle Oil in an Aldi store and initially assume that it was Moroccanoil. According to MIL, even if this error were dispelled once the customer examined the Miracle Oil product more closely, the initial interest created by Miracle Oil’s slavish imitation of the Moroccanoil get-up, constituted passing-off.

Aldi, of course, argued that this was an unjustified extension of the law of passing off and that, provided their customers were aware that they were buying Miracle Oil, rather than Moroccanoil, when they made the decision to purchase the hair care product, there was no passing off.

The Judge (HHJ Hacon) accepted Aldi’s line of argument and rejected MIL’s passing-off action. In the Judge’s view, Aldi had intended that the packaging of their Miracle Oil range should bring Moroccanoil to mind and this intention had been successful. However, although this might be viewed as “cheeky” by Aldi’s customers, it would not lead to one product being mistaken for the other or to a false assumption, amongst those customers, that the two hair care ranges were connected. In HHJ Hacon’s view, Aldi’s customers would recognise that Miracle Oil was different to Moroccanoil.

As to initial interest confusion, the Judge found that, as long as an initial false assumption (as to the nature of Aldi’s product) was dispelled before any purchase was made, MIL would have suffered no damage. In the absence of damage, one of the “classical trinity” required to establish a passing-off claim was absent and, as a result, there could be no passing-off.

A related case is also being fought between MIL and Avon Products, over the latter’s Moroccan Argan Oil products that also feature striking, light blue packaging.

Avon has applied to cancel three of MIL’s CTM registrations for both Moroccanoil (word) and combinations of Moroccanoil and the letter M (CTM 8729519 and CTM9015496) under Article 7 CTMR. Although the actions against the combination marks have been

when BGL launched its Compare The Meerkat advertising campaign. The adverts feature an animated, Russian meerkat character (Alexander Orlov) who pleads with viewers looking for cheap car insurance to stop confusing his comparethemeerkat.com website with the correct (comparethemarket.com) website. In this way, punters remember the distinctive comparethemeerkat.com and then make the simple mental leap to remember the non-distinctive comparethemarket.com. This continuing campaign remains so successful that associated “meerkat ” related merchandise is now highly prized.

BGL owns UK trade mark registrations for COMPARETHEMARKET (one word) and comparethemarket.com in Classes 35 and 36. However, in June 2010, they decided to go a step further and try to protect the phrase COMPARE THE MARKET (three words) itself, again in Classes 35 and 36.

This UK trade mark application drew the attention of one of the applicant’s major competitors, GoCompare.com Limited who opposed it on the basis that the mark was non-distinctive, descriptive and/or generic (Sections 3(1)(b), (c) and/or (d) of the Trade Marks Act 1994).

GoCompare.com had itself dealt with the problem of an unmemorable trade mark in the crowded, price comparison market with an advertising campaign featuring the moustachioed, operatic tenor, Gio Compario. Eschewing the use of an aria from a Puccini opera, the advertisement featured a reworded version of George M. Cohan’s patriotic song, Over There, with the phrase Go Compare featuring a lot. Although its irritation factor was high, the campaign did embed the name of the web site gocompare.com in the national consciousness.

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20 Jenkins Trade Mark Newsletter

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Be that as it may, BGL’s attempt to monopolise a descriptive phrase such as Compare The Market, for market price comparison related services, caused GoCompare.com to hit a high C and they opposed. BGL put in a substantial amount of evidence of use of the domain name (and trade mark) comparethemarket.com, as well as the use of the three word phrase (Compare The Market) by the UK press, potential customers searching online for the comparethemarket.com website and competitors in comparative advertisements.

The Hearing Officer (Mr. James) began by considering whether, at the relevant date, the mark applied for was generic (customary in the established practices of the trade, Section 3(1)(d)). He found that, although there was some evidence of limited third party use of the phrase (Compare The Market) by third parties, some of this use had been as a brand name (of the applicant), whilst the remaining (third party) use was inadequate to establish that the phrase had become generic in the trade. The Section 3(1)(d) ground of opposition was therefore rejected.

Turning to the issue of descriptiveness, Mr. James had no difficulty in finding that, in relation to price comparison services, the mark applied for was inherently descriptive and was therefore excluded from registration by Section 3(1)(c).

This brought the Hearing Officer to the matter of acquired distinctiveness. Mr. James was happy to accept that the evidence of use filed by BGL clearly established the (high) distinctiveness of the trade mark comparethemarket.com through use in the UK. The Hearing Officer also believed that, given the generic nature of the top level domain (.com), the applicant’s evidence of acquired distinctiveness meant that it was “entirely plausible that COMPARE THE MARKET may also have become distinctive of the applicant’s services”. In order to ram home the point, Mr. James also noted the references to Compare The Market in major UK newspapers and at the BBC website. This, together with evidence that over 70% of consumers, searching Google for the phrase Compare The Market, then clicked through to the UK trade mark applicant’s website, as well as the fact that a competitor used the mark applied for to identify the applicant’s product in a comparative advertisement, persuaded the Hearing Officer that distinctiveness had been established through use.

As far as the ground of opposition based on non-distinctiveness was concerned (Section 3(1)(b)), Mr. James decided that

this would stand or fall with his ruling on descriptiveness. He therefore found the mark to be inherently non-distinctive but that this was overcome by the applicant’s evidence.

In the writer’s view, this is a sensible decision given the facts presented to the Hearing Officer. It also shows that with imaginative advertising (really imaginative advertising in this case), even the most descriptive of words or phrases can be turned into one of the best known brands of the day.

In a decision before the UK Trade Mark Office, the trade mark Canadian Ice was found to be non-distinctive and descriptive in relation to jewellery containing diamonds in Class 14. Ice was shown to be a well established slang term for diamonds, whilst Canada was shown to be a source of diamonds. The applicant’s argument that, in all of their promotional material, they emphasised the “frozen water from Canada” meaning of the phrase was rejected by the Hearing Officer (Mr. James).

In two recent UK revocation actions, the present owners of trade mark rights in famous car marques of the past found that their trade mark registrations were worth significantly less than they might have imagined.

The first case (Healey Sports Cars Switzerland v Jensen Cars; 2014 EWHC 24(Pat)) was an appeal to the English High Court from a decision of the UK Trade Mark Office (Mr. James). It involved the trade mark Jensen, an English built sports car of the 1960s and 1970s. Healey owned a number of UK trade mark registrations for marks consisting of or containing the Jensen name in relation to Class 12 goods. Jensen Cars sought to revoke all of these registrations on the ground of five years non-use (Section 46(1) of the 1994 Trade Marks Act).

The only evidence that Healey was able to bring forward to save its trade mark registrations was:

• Information regarding a new version of a Jensen Interceptor sports car at their website www.jensensportscars.com;

• A press release relating to the forthcoming launch of the new car; and

• Undated photographs of a prototype of the new vehicle in which the trade mark Jensen could not be seen.

In the Hearing Officer’s view:

• If the requirement (to prove genuine use) was for the use of the marks to be in relation to goods already marketed or about to be marketed, the use on the website and in the press release was inadequate. At that time, the car did not exist. In fact, it was at least a year away from being unveiled.

• The materials provided by Healey did not provide sufficient information about the new car’s specification for potential customers to show a serious interest in purchasing the vehicle. Further, no evidence had been provided of any potential customer expressing any interest in the new Jensen Interceptor.

Further, Mr. James was also persuaded by the fact that Healey’s use of the trade mark Jensen at their website and in their press release began just prior to their (Healey’s) filing of an invalidation action against a later filed UK trade mark registration for Jensen owned by Jensen Cars. This, in spite of the fact that the earlier International trade mark registration relied on by Healey for Jensen had been granted for five years before their use of the trade mark began. This, according to Mr. James, called into question whether Healey’s use of the Jensen trade mark, in the advertisements relied on, was really genuine use intended to create a market for motor cars.

On appeal to the High Court, the Deputy Judge (Mr. Carr QC) agreed. He found no error of law or principle in Mr. James’ approach. According to the Deputy Judge, it was not possible to tell from the undated photographs whether a prototype car existed

21 Make Your Mark

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NEWS

during the relevant five year period nor was it possible, since the trade mark Jensen did not appear in the photograph, to say whether it was a prototype Jensen branded car. Mr. Carr also concluded that, in the absence of a contrary explanation from Healey, the Hearing Officer was entitled to consider that their (Healey’s) use could have been merely token use aimed at maintaining the validity of their registrations rather than genuine use seeking to create a market (in Jensen cars).

For these reasons, the Deputy Judge dismissed the appeal and maintained the revocation of Healey’s UK trade mark rights.

The second case involved an even older brand of sports car, Allard, a vehicle that had finished third in the Le Mans 24 hour race as far back as 1950.

The UK trade mark registration at issue (for Allard) had originally been owned by a company called Allard Motorsport. However this entity was dissolved in 1996 and its assets, including the UK registration, became the property of the Crown (bona vacantia). The registration was bought by another company, Allard Motor Cars (“Cars”) in September 2012 without the goodwill in the original business. An application to record this assignment was made on December 2012 and the recordal took place in January 2013.

Before the application to record the assignment was made however, an unrelated UK company, Allard Motor Sport (“Sport”), sought to revoke the UK registration on the basis of non-use (Section 46(1)). The evidence of use of Allard put forward by Cars was remarkably similar to that produced by Healey in the Jensen revocation action consisting principally of marketing activities, especially press releases and the presence of the Allard trade mark at a website. The further difficulty in the present (Allard) case was that much of this material was dated before Cars took assignment of the UK trade mark registration under attack. One “verbal” order that was said to have been taken from a potential investor in Cars one day before Sports applied to revoke the registration, was said to be far removed from concrete orders for the car from ordinary members of the public.

One final argument put forward by Cars was that the Crown owned the UK registration for Allard until September 2012 and that, since the Crown was not capable of trading in the goods at issue, there was a proper reason for non-use up until September 2012. The Hearing Officer found that this was not a proper reason (for non-use). If it were otherwise, according to the Hearing Officer,

every registration held by the Crown as bona vacantia property would be immune from revocation for non-use, even if there had been no use for decades. Cars knew that it was purchasing a registration for a mark that had not been used since 1996 and, in the Hearing Officer’s view, that risk was no doubt reflected in the purchase price (at a cost of only £1000 it probably was).

For these reasons, the Hearing Officer found that no genuine use of the trade mark Allard by Cars had been established and that the UK right should be revoked.

Cars bought the now revoked UK trade mark registration in an attempt to get a trade mark right that predated a UK trade mark registration (filed in January 2012) for Allard owned by Mr. Leslie Thacker, a director of a sister company of Sports. As is often the case in trade mark disputes, Cars would have been in a much better position today if they had filed a trade mark application for Allard in Class 12 at the same time as the company (Cars) was established (in August 2011). Now it is probably too late and Sports is in pole position to reintroduce this classic sports car to the UK market.

In the General Court case between The Hut.com and Intersport France (T-330/12), a CTM application for The Hut claiming, amongst other services “retail services in connection with the sale of cosmetic products, perfumes, clothing, footwear, headgear, toys and games” was successfully opposed (by Intersport France) on the basis of an earlier French trade mark registration for La Hutte (French for The Hut) covering inter alia goods in Classes 3, 25 and 28.

The Opposition Division had ruled in favour of the CTM applicant (The Hut.com). This decision was overturned in part by the Second Board of Appeal. On further appeal to the General Court, the Board’s ruling was confirmed. The Court found that there were certain visual and phonetic similarities between the two marks and that, in spite of the difference

in languages, conceptual identity.

Turning to the comparison of goods and services, the Court followed the now well established OHIM practice that specific goods are deemed similar to retail services involving the sale of the same specific goods.

Taking all of this into account, and in spite of the two marks only being found to be visually similar to “a low degree”, the Court found that there was a likelihood of confusion in respect of “retail services in connection with the sale of cosmetic products, perfumes, clothing, footwear, headgear, toys and games”.

Given another established CTM practice, namely that, when the goods at issue are clothing, footwear and headgear, it is the visual aspect of the mark comparison that is usually paramount, the writer wonders whether this decision is correct, particularly in relation to the retail of Class 25 goods. However, when an opposing mark in one EU language, is close enough to the CTM mark applied for, that one can guess that the two marks have the same meaning (as in The Hut and La Hutte), it is very likely (assuming identical or similar goods or services) that you will lose the CTM opposition.

The success of the Spanish company Panrico SA in keeping the CTM register clear of marks containing Donut(s) or Doughnut(s) for donuts/doughnuts continues. The latest example is the case of Bimbo SA v Panrico SA before the European Court of Justice (C-591/12).

The CTM applicant applied to register the trade mark Bimbo Doughnuts for, amongst other goods, doughnuts (in Class 30). Panrico opposed relying on its earlier Spanish trade mark registrations for the marks Doghnuts (only one letter “u”), Donut and Donuts in Class 30. As often in the past, the opposition was upheld in turn by the Opposition Division, the Board of Appeal and the

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22 Jenkins Trade Mark Newsletter

(European) General Court. Probably with a sense of disbelief that any of us would feel, Bimbo appealed again, this time to the Court of Justice (CJEU).

However, the CJEU dismissed the appeal. Agreeing with the reasoning of the General Court, the CJEU accepted that

• The word Doughnuts was not devoid of distinctive character for the many Spanish consumers who did not understand English; and

• The word Doughnuts had an independent distinctive role in the CTM mark applied for. This meant that, since the Doughnuts element (in Bimbo’s mark) was wholly meaningless to the average Spanish consumer, the mark applied for did not form a “unitary whole or a logical unit on its own” in which the word Doughnuts would be merged. It followed that the non-English speaking, Spanish public would not be able to understand Bimbo Doughnuts as meaning that the goods concerned were doughnuts produced by Bimbo SA or by the proprietor of the trade mark Bimbo.

Given that the earlier trade marks, particularly Doghnuts, were confusingly similar to Bimbo Doughnuts, and bearing in mind the identity of the two sets of goods, the opposition succeeded and Bimbo’s CTM application was rejected.

According to the writer’s research, there is only one CTM in Class 30 for a “Doughnut” mark. This is HDN Development’s CTM registration (no. 1298785) for a Krispy Kreme Doughnuts logo in which exclusive rights to the word Doughnuts is disclaimed. This CTM was granted after an opposition filed by Panrico (based on their earlier Spanish trade mark rights), was rejected. See General Court case T-317/06.

Obviously Panrico weren’t going to take that lying down, so they applied to cancel HDN’s CTM right once it was registered. In an even more amazing development, this cancellation action has, to date, also been rejected and the case is once again before the General Court (T-534/13).

One extraordinary feature of this trade mark fight, which has been going on since 2000, is that HDN filed their original CTM application for their Krispy Kreme Doughnuts logo using a language regime of English and Spanish. Big mistake! For the last 14 years, they (HDN) have been fighting oppositions, cancellation actions and appeals in Spanish. This has no

doubt added significantly to HDN’s costs.

One key aspect of OHIM practice is that you should never file a CTM using either Spanish or German as a language (unless you are Spanish or German). This is because both Spanish and German companies love to file oppositions. For 18 years, Jenkins has been using an English/Italian language regime before OHIM and, in all of that time, during which we have filed over 5300 CTM applications, we have received no more than half a dozen oppositions that were filed in Italian, only three of which went to a decision.

In November 2010, Apple Inc. obtained a US trade mark registration (no. 4277913) for a 3D representation of its flagship stores for a range of retail store services, as well as the demonstration of products to effect sales. Such services fall in Class 35. The description of the mark which accompanied an image (of a store) was as follows:

“The color(s) steel gray, light brown and black is/are claimed as a feature of the mark. The mark consists of the design and layout of a retail store. The store features a clear glass storefront surrounded by a paneled, steel gray façade consisting of large, rectangular horizontal panels over the top of the glass front, and two narrower panels stacked on either side of the storefront. Within the store, rectangular recessed lighting units traverse the length of the store’s ceiling. There are light brown cantilevered shelves below recessed display spaces along the side walls, and light brown rectangular tables arranged in a line in the middle of the store parallel to the walls and extending from the storefront to the back of the store. There is multi-tiered shelving along the side walls, and a light brown oblong table with black stools located at the back of the store, set below video screens flush mounted on the back wall. The walls, floors, lighting, and other fixtures appear in dotted lines and are not claimed as individual features of the mark; however, the colors and placement of the various items are considered to be part of the overall mark. Similarly, the white in the drawing represents background areas and is not part of the mark”.

Subsequently, Apple filed an International trade mark application for the same mark (IR 1060321) designating the major EU countries, including Germany, as well as a number of other major markets.

The German Patent and Trade Mark Office refused the trade mark application

on the basis that it was no more than a representation of an essential aspect of Apple’s business. The Office accepted that German consumers might perceive the layout of such a retail space as an indication of the quality (and price) of the products sold. However, in the Office’s view, those consumers would not see it as an indication of the products’ commercial origin. Further, according to the German Office, the retail store depicted was not sufficiently distinguishable from the stores of other providers of electronic products.

Apple appealed to the German Patent Court. The Court seemed sympathetic to the trade mark applicant’s case but still felt the need to put some questions, on the interpretation of Articles 2 and 3 of the Trade Mark Harmonisation Directive, to the European Court of Justice (CJEU) for a ruling.

To paraphrase the questions put, the German Patent Court first asked whether a representation of the layout of a retail store, without indicating the size or the proportions of the store, could be registered as a trade mark for (certain) services. The CJEU replied that, provided such a representation was capable of distinguishing Apple’s products or services from those of third parties, it could constitute a registrable trade mark. This would particularly be the case when the depicted layout departed significantly from the norm or customs of the relevant commercial area.

The German Patent Court then asked whether such a representation (or a store layout) could be registered for services, as well as goods, including the type of product demonstration services claimed by Apple.

The CJEU again answered in the affirmative. Such a sign, depicting the layout of a flagship store, could be registered for services, as well as goods, even where those services “do not form an integral part of the offer for sale of goods”. In particular, demonstrations of products, that took place in a flagship store, could themselves “constitute remunerated services falling within the concept of “service””.

These are sensible rulings which will be welcomed by franchisors, particularly in the retail and food/drink areas. The case now goes back to the German Patent Court for a decision. The (German) Court will, of course, also have to take into account issues such as inherent distinctiveness, descriptiveness and genericism, when reaching its decision.

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23 Make Your Mark

24 Jenkins Trade Mark Newsletter

In the end, Class 5 practice can be confusing

Two recent decisions, one before the UK Trade Mark Office, the other before the

General Court, show that when it comes to trade mark oppositions in Class 5, anything can happen and probably will.

As part of a longstanding worldwide dispute involving the Indian company Ajanta Pharma Limited and the US based multinational pharmaceutical company Pfizer, Inc, the UK Trade Mark Office issued a recent decision in an opposition filed by Pfizer against Ajanta’s UK trade mark application for KAMAGRA in Class 5. Taking the same position as OHIM, where the First Board of Appeal rendered a decision in Pfizer’s favour (R1845/2012-1), the UK Trade Mark Office confirmed that there was a likelihood of confusion between the marks KAMAGRA and VIAGRA.

Ajanta had applied for the mark KAMAGRA in the UK covering “pharmaceutical and veterinary preparations and substances” in Class 5.

Pfizer opposed this UK application based on their earlier CTM registration for VIAGRA covering, amongst other goods, “pharmaceutical preparations, in particular preparations for the treatment of erectile dysfunction”.

In support of their opposition, Pfizer made the following claims, namely that

• Themarksarehighlysimilarinviewof the identical suffix –AGRA and the goods covered are identical or similar (Section 5 (2)(b) of the Trade Marks Act 1994);

• Ajanta’suseofKAMAGRAwouldtake unfair advantage of the earlier mark’s reputation and would lead to the blurring and dilution of the distinctiveness of VIAGRA, leading to a reduction in sales (Section 5(3)); and

• thesignVIAGRAhasbeenextensively

used in the UK since September 1998 on pharmaceutical preparations and particularly for the treatment of erectile dysfunction and the use of KAMAGRA would lead to a misrepresentation (Section 5(4)(a)).

Ajanta disputed that there would be a likelihood of confusion between the marks given the large number of third party owned, earlier trade marks in Class 5 containing the identical suffix –AGRA on the UK trade mark and CTM registers. They also argued that the parties had entered into an agreement whereby Ajanta was given consent to use the mark KAMAGRA by Pfizer. The UK Trade Mark Office’s Hearing Officer (Ms. Pike) did not share the same view and refused Ajanta’s UK application.

In her decision, while Ms Pike found the marks to be similar only to a low degree, she also acknowledged the reputation of the mark VIAGRA in connection with pharmaceutical preparations for the treatment of erectile dysfunction by stating that “it is common knowledge that VIAGRA has a reputation for treating that condition and I take judicial notice of that fact”. With regard to the reputation of the pharmaceutical preparations other than those for the treatment of erectile dysfunction, Ms. Pike further stated that, although the relevant consumers in relation to pharmaceutical trade marks consist of specialised medical practitioners and of the end patients, the mark “has acquired such a reputation that it goes beyond the relevant public as regards the opponent’s goods”. Therefore, despite, in her view, a low degree of similarity between the goods relied upon in the opposition and the remaining goods claimed by Ajanta, she considered that there would be a link between them.

In addition, the Hearing Officer acknowledged that Ajanta’s use of KAMAGRA would take unfair advantage

of the reputation of VIAGRA since the evidence brought by Pfizer showed use of KAMAGRA in connection with products for the treatment of erectile dysfunction and this fact could not be a “mere coincidence”. Finally, Ajanta’s argument that Pfizer had given consent to use the mark KAMAGRA was also rejected since the agreement entered into between the two parties was restricted to India and expressly stated that Pfizer would not be prevented from enforcing their rights in other territories.

Two days after this UK Trade Mark Office decision was issued, the General Court rendered a judgement in a factually similar case (Farmaceutisk Laboratorium Ferring v Tillotts Pharma; T501/12).

Tillotts had applied to register the trade mark OCTASA at OHIM in connection with “preparations and substances for preventing and treating diseases and disorders of the gastro-intestinal tract” in Class 5.

Ferring filed an opposition based on Articles 8 (1)(b) and 8(5) CTMR and relied on a large number of earlier national marks for the trade marks PENTASA and OCTOSIM covering diverse goods in Class 5 including gastro-intestinal pharmaceutical preparations.

The Opposition Division rejected the opposition on the basis that,

• Thecommonsuffix-ASAwasdescriptive, being an acronym for the pharmaceutical product 5-aminosalicylic acid (also known as mesalazine and 5-ASA);

• Therewasaconsiderabledifferencebetween the prefixes of the marks namely OCT- and PENT-.

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EUROpEAN pERSpECTivES

On this basis, the Opposition Division found that there was no likelihood of confusion between the two marks OCTASA and PENTASA. In addition, while the Opposition Division did not expressly reject the reputation of Ferring’s (PENTASA) mark, they did reject the Article 8(5) ground of opposition since they considered that Ferring had not brought sufficient evidence that Tillotts’ mark OCTASA would take unfair advantage of, or be detrimental to, the reputation of the earlier mark.

Ferring subsequently filed an appeal against the decision of the Opposition Division. However, the Fourth Board of Appeal dismissed the appeal, again on the basis that there was no likelihood of confusion between the marks OCTASA and PENTASA in view of the descriptive character of the suffix –ASA. The Board of Appeal also dismissed the appeal, insofar as it relied on Tillotts’ earlier mark OCTOSIM, considering that the similarity between the marks OCTASA and OCTOSIM was no more than average, the similarity between the goods covered by those marks was weak, the distinctiveness of the earlier mark was no more than average and the relevant consumer’s attention was high.

In a further appeal, the General Court held that the Fourth Board of Appeal had erred in finding that there was no likelihood of confusion between the marks OCTASA and PENTASA.

In its decision, the General Court considered that, while it is settled case-law that, in relation to pharmaceutical trade marks, the relevant consumers consist of both medical practitioners and end-patients and, therefore, the level of attention is higher than average, the

In the end, Class 5 practice... continued

Board of Appeal had failed to

establish that the descriptive

character of the suffix –ASA

would be understood by both

sets of relevant consumers. The

evidence before the Court had

shown that the active ingredient

mentioned on the packaging of

the PENTASA product was “mesalazine”.

However, the other synonyms used

in connection with the same active

ingredient, namely 5-aminosalicylic and

5-ASA, were only mentioned in medical

and scientific publications addressed

to medical professionals. According to

the Court, although end-patients were

deemed to have a higher level of attention

than average, it had not been established

that medical practitioners would use the

names 5-aminosalicylic, 5-ASA or “asa”

with their patients when prescribing them

such (mesalazine) medicines. Therefore,

this category of relevant consumer

(namely end-patients) would not be able

to immediately interpret, without further

thought, the suffix –ASA as a reference

to the active ingredient “mesalazine”,

5-aminosalicylic or 5-ASA.

The General Court further held that,

because the descriptive character of the

suffix -ASA in connection with the active

ingredient “mesalazine” had not been

established in OCTASA and PENTASA, the

Board of Appeal had erred in considering

that there was no likelihood of confusion

between the marks, considering the visual,

phonetic and conceptual similarities

between the two marks (OCTASA and

PENTASA).

It is to be noted that the General Court

based its analysis on just one earlier

national, Benelux registration for

PENTASA and did not further comment

on the merits of either the other earlier

national rights for PENTASA, the earlier

registrations for OCTOSIM or any of the

arguments or evidence put forward for the

Article 8(5) ground of opposition.

Comment

Despite the apparent consistency in the outcome of two very similar cases, these decisions highlight the difference still residing in the approach taken by the UK Trade Mark Office and OHIM in the assessment of the likelihood of confusion.

The decision of the UK Trade Mark Office mirrored that of the First Board of Appeal in the corresponding CTM case (R 1845/2012-1). However, while this UK decision shows a degree of harmonisation that is often missing from EU trade mark decisions, it also highlights a nuance of UK practice in the general assessment of the reputation of an earlier mark, and subsequently of unfair advantage, which appears to be far less conservative, albeit more pragmatic, than the position often taken by OHIM. Ajanta’s use of KAMAGRA, in connection with products to treat erectile dysfunction, was indeed taken into account in the assessment of the UK Trade Mark Office, despite the broad coverage of their UK trade mark application in Class 5. As a result, the Hearing Officer was willing to accept that the use of KAMAGRA would take unfair advantage of the reputation of VIAGRA. An interesting question would be whether the UK Trade Mark Office would have rejected Ajanta’s application (for KAMAGRA) if the reputation of the earlier mark had not been established; very likely not.

Down in Alicante, the Opposition Division took a different approach in a very similar case by applying a stricter assessment of the application of Article 8(5) CTMR and of the notion of unfair advantage. This point of law, to the regret of the writer, was not examined by either the Board of Appeal or the General Court, both of which focused solely on the assessment of the similarity between the signs and the level of knowledge of relevant consumers. On the latter point, the decision of the General Court in the OCTASA v PENTASA case reminds us that, despite the higher level of attention of end-patients due to the nature of the (Class 5) goods, such consumers (end-patients) are no medical experts and this needs to be taken into account when assessing the evidence and arguments based on the names of, and abbreviations of, pharmaceutical products.

 

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26 Jenkins Trade Mark Newsletter

The Convergence Programme was established in June 2011 to harmonize

the practice of OHIM and the national IP offices of the EU member states. Five projects were launched in the first phase of this programme. This article focuses on the Common Practice arising from the project on the scope of protection of black and white marks.

There has long been a division between the national offices regarding the scope of protection that should be given to marks registered in black and white. Some national offices have applied the ‘black and white covers all’ approach meaning that the registered mark is protected for all colours, and others have taken a more literal approach, so that the registered mark is deemed to be protected only in black and white.

The Participating Offices

A Common Communication on the implementation of the Common Practice established through the project was published on 15 April 2014.

In addition to OHIM, the national offices of Austria, Benelux, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Germany, Greece, Hungary, Ireland, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and the UK, in the EU, as well as Turkey, have signed up to the practice and were to implement it within 3 months of its publication.

The practice was implemented by OHIM on 2 June 2014 and by the UK Trade Mark Office on 15 July 2014. The Danish, Norwegian and Swedish national offices showed their support for the project but opted out of implementation due to legal

The SCOPe OF PROTeCTION OF BLACK AND whITe MARKS IS NO RAINBOw (It’s not black and white either!)

constraints (under their laws black and white marks cover all colours) and the offices of Finland, France and Italy did not participate in the project, therefore they will not be implementing the practice.

The Common Practice

The objective of the project was to harmonize practice with regard to the scope of black and white marks in 3 key areas of trade mark law : Priority, Relative Grounds and Genuine Use.

Priority

Under the Paris Convention, an applicant who files a trade mark application in a country which is party to the Paris Convention or to the WTO, or a country with a reciprocity agreement, has a six month window in which to file further trade mark applications in other member countries, for the identical mark and the identical goods/services, and claim the filing date of the first application as a priority date for the subsequent applications vis-à-vis third party applications filed during the same six month window or later.

what is the meaning of

“identity”?

The requirement that the subsequent application which claims priority from the first filing must be for an identical mark seems straightforward enough, and yet the meaning of “identical” is often raised as a topic of debate. The Convergence Programme presented an

opportunity to clear up the debate but, rather than establish a Common Practice which sits one side of the fence, the Convergence Programme has brought practitioners to a half-way house between the uncompromising standard of ‘identity means identity’ and the relaxed, broad approach of ‘black and white encompasses all colours’.

Under the Common Practice, a trade mark filed in colour is not identical to a black and white trade mark from which it claims priority unless the differences in colour are insignificant.

A trade mark in colour or black and white is not identical to a greyscale trade mark from which it claims priority unless the differences in the colours or in the contrast of shades are insignificant.

The Common Practice defines an insignificant difference between two marks as a difference that a reasonably observant consumer will perceive only upon side by side examination of the marks.

Relative Grounds

Many national offices, as well as OHIM, do not examine trade mark applications on relative grounds for prior rights. However, the comparison of marks comes into play in opposition and invalidation proceedings.

The Common Practice establishes that:

a) a trade mark in colour is not identical to an earlier trade mark in black and white unless the differences in colour are insignificant; and

b) a trade mark in colour or in black and white is not identical to an earlier trade mark in greyscale unless the differences in

EUROpEAN pERSpECTivES

27 Make Your Mark

the colours or in the contrast of shades are insignificant.

The meaning of insignificant here is ‘not normally noticeable’.

Whilst the Common Practice relating to priority applications will be familiar to EU practitioners, the scope of protection of black and white marks under the Common Practice applied to relative grounds is a departure from the practice applied previously by some national offices whereby black and white marks were deemed to cover all colours. The Common Practice will be seen as a narrowing of the scope of protection of black and white marks in this context.

Genuine Use

The issue of genuine use arises when a trade mark registration is challenged in opposition or invalidation proceedings or in an application for revocation on the ground of non-use of the mark over a period of five uninterrupted years.

Under the Common Practice relating to genuine use, it is necessary to consider whether a mark used in colour alters the distinctive character of the trade mark registered in black and white/greyscale (or vice-versa), but what must the proprietor of the registered mark consider before putting the mark into use in colour? The Common Practice states that a change only in the colour does not alter the distinctive character of the mark, provided:

(1)the word/figurative elements are repeated in the mark in use and they are the main distinctive elements;

(2)the same contrast of shades is used;

(3)the colour or combination of colours in the mark in use does not possess distinctive character in itself; and

(4)colour is not one of the main contributors to the overall distinctiveness of the registered mark.

The second requirement above raises the question: ‘How is the contrast of colours

assessed when comparing colour marks with black and white marks?’

In view of the fourth requirement above, proprietors of weakly distinctive registered marks should be careful not to use colour in such a way that increases the distinctiveness of the registered mark.

“Insignificant Differences”

It seems that in reality, only very minor differences between the marks to be compared for the purposes of assessing priority claims, relative grounds and genuine use will be acceptable for a finding of identity.

The test is this: the difference must be so insignificant that it would not be perceived by the average consumer.

Implementation of the Common Practice

Whilst it was expected that all participating offices would implement the Common Practice by mid-July 2014, OHIM and some national offices have elected to apply the practice to all trade mark applications and all opposition and invalidation proceedings which were pending on the implementation date. By contrast, the majority of national offices, including the UK Trade Mark Office, are applying the practice to trade mark applications and proceedings filed after the implementation date. At the time of writing, we are not aware of any re-examination by OHIM of applications /oppositions/invalidity actions that were pending at the time of implementation of the Common Practice.

The Implications

In future, trade mark applicants and proprietors need to be aware that the scope of black and white marks may no longer extend to all colours. Whereas it used to be a good strategy (in some parts of the EU at least, including the UK) to file for figurative marks in black and white to provide the broadest possible protection against later applications filed

by other applicants, and to protect against non-use cancellation in the event of use of the mark in different colours over time, applicants now need to be clear at the outset about how they will use their mark, file accordingly and be consistent in their use of the mark.

The new practice also affects the way in which we assess marks in searches as potential bars to use and registration of a new mark. A black and white mark which, previously, would have been regarded as identical to the same mark in colour, will now be regarded as similar. One might say that this lowers the level of risk only slightly, but surely it has a greater impact on marks that would have been considered border-line similar according to the broad scope of black and white marks under the previous practice. The issue of similarity is outside the scope of the new Common Practice, but it is another area that could be affected by it.

The aims of the Convergence Programme were “To establish and communicate clarity, legal certainty, quality and usability for both applicant and office”. However, this Common Practice of “insignificant differences” which arises from a convergence of the practices of OHIM and the national offices is somewhat lacking in clarity. Furthermore, it will be interesting to see how this practice is harmonized with the UK Trade Mark Office’s practice following Specsavers (TPN 1/2014) - as reported in the Spring 2014 edition of Make Your Mark - which acknowledges use in colour, of marks registered in black and white, when comparing marks in opposition proceedings.

The Scope Of Protection Of Black And White Marks... continued

28 Jenkins Trade Mark Newsletter28 Jenkins Community Design Newsletter 28 2828 Jenkins Community Design Newsletter

European Patent Attorneys • Chartered Patent Attorneys • Trade Mark Attorneys

The information contained within this Newsletter is not intended to provide an exhaustive or comprehensive statement of current law or practice. No reliance should be placed upon it as a basis for any legal action or commercial decision and for any individual case specialist professional advice should always be sought in order to determine the applicability of any relevant legislation.

TM Jenkins, the Jenkins logo, R.G.C. Jenkins & Co., and Make Your Mark are trade marks.

© R.G.C. Jenkins & Co. 2014 Jenkins is the trading name of R.G.C. Jenkins & Co.

If we can offer you advice on the topics discussed in this Newsletter or any other intellectual property matter, please contact us at:

OUT AND ABOUT

LondonRGC Jenkins & Co 26 Caxton Street London SW1H 0RJ Tel: +44 (0) 20 7931 7141 Fax: +44 (0) 20 7222 4660 E-mail: info@jenkins.eu Internet:www.jenkins.eu

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Who Where When

David Brink Katie Cameron James Cross Angela Fox Stephen James Alvin Lam

Reception for the launch of Angela Fox’s new book, Intellectual Property Enterprise Court: Practice and Procedure Oxford & Cambridge Club, London

17 September 2014

Joanne Ling Marques Conference Copenhagen

23 - 26 September 2014

Katie Cameron Kana Enomoto

PTMG Autumn Conference Chicago

8 - 10 October 2014

Tanya Buckley Kei Enomoto Reuben Jacob Manuel Kunst

Medica Trade Fair Dusseldorf

12 - 15 November 2014

Angela Fox Maucher Borjes Jenkins IP Day Munich Talk on “Creative Brand Protection for Shapes and 3-D Designs in the EU”

19 November 2014

Stephen James INTA Conference Munich When Trademarks overlap with other IP Rights

8 - 9 December 2014

INTA in Hong Kong

In May, Katie Cameron, Angela Fox, Reuben Jacob, Stephen James, David Musker and Tim Pendered had a very successful trip to the INTA conference in Hong Kong and were delighted to see so many clients and colleagues at the Jenkins hospitality suite.

New and Improved Website

The Jenkins website (www.jenkins.eu) is having a make-over. Watch out for the new and improved version in Autumn 2014 and let us know what you think!

Book Launch

Angela Fox’s book, The Intellectual Property Enterprise Court: Practice and Procedure, was published in June 2014. It provides a unique, standalone guide for all litigators, practitioners and IP right owners seeking to make the best use of the IPEC’s streamlined procedures for cost-effective resolution of disputes involving UK or Community IP rights. (It is published by Sweet & Maxwell, ISBN: 9780414028685, £175).