Thursday, 18 April 2013

A hotel by any other name: the ‘own name’ defence in Hotel Cipriani, Part Two

Author: Darren Meale (SNR Denton UK LLP)

Hotel Cipriani Srl & Ors v (1) Fred 250 Ltd (formerly Cipriani (Grosvenor Street) Limited) (2) Giuseppe Cipriani (3) Cipriani International SA [2013] EWHC 70 (Ch), Chancery Division, England and Wales, 29 January 2013

Journal of Intellectual Property Law & Practice (2013), doi: 10.1093/jiplp/jpt054, first published online: April 14, 2013

The Cipriani family lost a trade mark infringement battle three years ago against the world-famous Venetian hotel they themselves once owned, when the Court of Appeal confirmed they could not include their surname in the name of their London restaurant. Three years later, an attempt to use the Cipriani name to inform the public of the family's management of that restaurant has also been held to infringe.

Legal context

It has long been possible under English and European trade mark law for an infringer to excuse himself from liability by claiming only to be trading under his own name or address. Trade mark law has never permitted proprietors to monopolize those terms which the trade must be free to use to describe the goods and services it offers, and the use of one's own name along with other descriptive indications is lawful provided it is honest. Yet when this case first came to court, Mr Justice Arnold gave a restrictive reading of the ‘own name’ defence and the honesty proviso, which the Court of Appeal later widened only a little. In Part Two of the litigation, Arnold J was asked to look at these issues again.

Facts

The facts of this case are outlined more fully in this report of the first part of the case (see (2010) 5(7) Journal of Intellectual Property Law & Practice 482). The story starts in the early 1930s, when Senior Giuseppe Cipriani, the grandfather of Giuseppe Cipriani, the second defendant in this case, opened Harry's Bar in Venice. The bar became, and remains, world famous. The Venetian success story was repeated several times with the hotel Locanda Cipriani opening late in the 30s, Hotel Cipriani in the late 50s, and Hotel Villa Cipriani in the early 60s. As time went by, Giuseppe's son, Arrigo, and grandson, Giuseppe (Junior) took on roles in the family businesses. They expanded abroad with Cipriani restaurants in New York and Buenos Aries and a private members' club in Hong Kong. Over the years some of the businesses were sold, in particular the Hotel Cipriani (HC), which ceased to be owned by the Cipriani family in 1967. Now owned by the Orient Express Group and enjoying an annual turnover of €29 million, it is patronized by celebrities, politicians and royalty.

HC acquired a Community trade mark (CTM) for CIPRIANI in respect of hotels in 1996.

In 2004 Arrigo and Giuseppe (Junior) opened, through a private company Cipriani (Grosvenor Street) Limited (CGS), the restaurant ‘Cipriani London’, which was commonly referred to as simply ‘Cipriani’.

In 2006, in Part One of this case, HC sued CGS, its parent company and Giuseppe for trade mark infringement and passing off. It was overwhelmingly successful at first instance (2008) and on appeal (2010).

The defendants' restaurant became ‘C London’. But they did not wish to lose the Cipriani connection completely, and they first sought to add (in small text) ‘by G. Cipriani’ to the restaurant's logo, windows and menu and later ‘Managed by Giuseppe Cipriani’. Part Two of this case commenced as the High Court was asked to rule on the lawfulness of such embellishments.

Analysis

Part Two does not purport to advance the law in any significant way beyond that stated by the High Court and Court of Appeal in Part One. Its relevance is in its application of that law to the new set of facts outlined above. This piece does not review Part One in detail, but does mention the findings in those proceedings in order to set the context for Part Two.

Use as a badge of origin

In Part One, ‘Cipriani London’ and the shorter ‘Cipriani’ were held to infringe, prima facie, the CIPRIANI trade mark, on the basis of confusing similarity.

Likewise, in Part Two the subtexts of ‘by G. Cipriani’ and ‘Managed by Giuseppe Cipriani’ were held to infringe, prima facie, the CIPRIANI trade mark. The defendants argued that these additions were not used in a trade mark sense—ie as badges of origin. Arnold J disagreed, finding that the average consumer would consider the former as indicating the identity of a person responsible for the restaurant, whether as a chef or a proprietor, and the latter as the manager of the restaurant. These would, he held, indicate ‘something significant about the origin of the services provided by the restaurant’. He referred to similar examples such as ‘Gordon Ramsay at Claridges’ and ‘Alain Ducasse at The Dorchester’. He disagreed with the defendants' contentions that the additions would be understood by the average consumer as merely being used truthfully to describe the role of Giuseppe. He found that Giuseppe was not well known among UK consumers, who would consider his sobriquet a part of the restaurant's name. These findings effectively doomed the defendants when it came to consideration of their best line of defence.

The ‘own name’ and descriptive use defences

That defence, prominent in both parts of the proceedings, was that they were trading using merely their own company or personal names, a defence under Article 12(a) of the Community Trade Mark Regulation (now 207/2009, mirrored by Article 6(1)(a) of the Trade Marks Directive (now 2008/95) and s 11(2)(a) of the Trade Marks Act 1994) which reads:
A Community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade: (a) his own name or address; … Provided he uses them in accordance with honest practices in industrial or commercial matters.
Part One established that:

  • the defence should be narrowly interpreted; 

  • it could apply to a company name less suffixes such as ‘Ltd’ or ‘Plc’ (following the Advocate General's opinion in Case C-17/06 Céline [2007] ECR I-7041), but CGS was not using ‘Cipriani Grosvenor Street’; 

  • it could apply to a company's trading name in certain circumstances (Court of Appeal, overruling Arnold J at first instance), which was ‘Cipriani London’ but not ‘Cipriani’; and 

  • it could not apply to Giuseppe (and his surname) as he was not the one trading.
When it came to consider the additions to the restaurant logo in Part Two, Arnold J had little to add to the analysis in Part One. Although being (in the author's view) less ‘offensive’ than simply calling the restaurant, in large prominent letters, ‘Cipriani’, having found that ‘G. Cipriani’ and ‘Giuseppe Cipriani’ were being used as badges of origin, it was a simple matter for the judge to find that neither was a trading or corporate name of CGS and that, as before, Giuseppe was still not the one trading.

The defendants ran an alternative defence, under Article 12(b) of the Regulation, that the additions were ‘indications concerning the … quality … or other characteristics’ of their services. The defendants' argument was that they indicating that the restaurant was characterized by it being run or managed by Giuseppe—which was not in dispute. Dismissing this argument, Arnold J considered that the additions indicated ‘something significant about the origin of the services provided by the restaurant’, rather than its quality or some other characteristic.

Use in accordance with honest practices

The own name defence (and indeed the indication of quality defence) is only available where the use in question is honest; a significant part of the three judgments was devoted to considering this proviso. In Part One, the courts reviewed the case law of the CJEU and noted that the proviso, which asks an objective question, was an expression of a duty of the user to act fairly in relation to the legitimate interests of the trade mark proprietor. It ensured that no person relying upon an Article 12 defence would be able to compete unfairly with the proprietor as a result.

In Part Two, Arnold J ran through the list of ten factors for determining whether the proviso applies, which he formulated in Samuel Smith Old Brewery (Tadcaster) v Lee [2011] EWHC 1879 (Ch), a post-Part One judgment, applying those to the present case (he applied many of them in Part One as well). In particular, the judge considered it relevant that

  • the uses of Giuseppe's name were as part of the branding of the restaurants. They were not mere formal statements by him in, for example, legal or accounting documents (such uses clearly being regarded by the courts in this case as more readily excusable); 

  • HC objected to the additions, or would have objected to them had they been asked; 

  • both additions were likely to cause consumer confusion; and 

  • the use of the additions interfered with HC's ability to exploit its CTM, in particular by opening a hotel or restaurant in London.
Arnold J also held that, although it was ‘understandable’ that Giuseppe wanted to use his family name in respect of the restaurant, this did not justify the confusion the use was likely to cause. Although it was one thing to call the restaurant ‘Cipriani’ and another to add ‘Managed by Giuseppe Cipriani’ to the logo, the judge did not regard that distinction as a significant factor in Giuseppe's favour in the circumstances of the case.

Overall, Arnold J concluded that Giuseppe's use of the additions would amount to unfair competition against HC and was not, therefore, in accordance with honest practices in industrial and commercial matters. This was the same conclusion he and the Court of Appeal reached in Part One as regards the use of ‘Cipriani London’ and ‘Cipriani’.

Summary

Just as Part One found the defendants infringers without any defences, so did Part Two. The additions were confusingly similar to the CIPRIANI mark and did not benefit from either the Article 12(a) or (b) defences. The defendants were also held liable for passing off.

Practical significance

Giuseppe may be forgiven for feeling aggrieved at a decision which prevents him from stating, quite truthfully, that he is the owner or manager of his restaurant—at least in the low-key but nevertheless prominent manner he had proposed. The courts have clearly decided to apply the Article 12 defences and their proviso very narrowly, although some of the reasoning used and factors considered are open to debate. First, in each case the courts appeared to take much from the fact that the defendants' signs would lead to confusion. But that is inevitable as Article 12 is a defence and will only be of relevance where prima facie infringement has been established—ie where there is confusion or a likelihood of it (or, say, unfair advantage). The author also wonders whether Arnold J is right to hold that ‘by G. Cipriani’ really says ‘something significant’ about the origin of the services of the restaurant. There are a number of characteristics which draw diners to any eatery, including who the chef is; who owns or runs the restaurant; from where the recipes are sourced; and from where the ingredients are sourced. Are these all perceived as badges of origin by consumers, rather than indications of kind, quality, and so on? The judge noted that his conclusion on Article 12(b) might have been different if ‘Giuseppe was known to have a particular system of management that resulted in particular benefits for the cuisine or quality of service’. If that were the case, why would that make his name any less a badge of origin? Would it not just reinforce the judge's initial reasoning?

The fact that failing to contact the trade mark owner and asking whether he objects to your use of your own name appears to have the effect of making your use less ‘honest’ also bears further thought. A person will only ever look at Article 12 once he has committed a prima facie infringement, and which trade mark proprietor would not object to that given the opportunity?

One piece of positive guidance that comes out of these cases looks to be that the own name defence is more likely to be available where the name is merely used in legal or business papers. Any ‘up-front in-your-face’ use, to coin Jacob LJ's phrase (see Reed v Reed [2004] EWCA Civ 159), is far less likely to succeed.

No comments:

Post a Comment