The Authors' Take - Fake it till you make it: an examination of the US and English approaches to persona protection as applied to deepfakes on social media

Fake it till you make it: an examination of the US and English approaches to persona protection as applied to deepfakes on social media

by Frederick Mostert and Emma Perot

In both the UK and US, deepfakes are likely to be addressed by current law. In the UK, passing off, while more complex than the right of publicity, could be helpful to address deepfakes where they are used in a way that conveys endorsement. For non-endorsement uses, defamation might be grounds for legal action. In the US, the right of publicity could be deployed. However, these causes of action inadequately address the potential of deepfakes to sway public opinion, damage the reputation of the individual depicted, and impinge on privacy and dignity of the individual if used in pornography. It may be challenging to track down the uploader, and the delay between commencing legal action and receiving an injunction can be too late if the deepfake goes viral. The potential velocity and amplification of deepfakes on the web allows for nefarious uses of this relatively new technology.

While the creation of rules in this regard are useful, there is also a need for technology to facilitate content moderation. As deepfake videos become increasingly difficult to distinguish from real footage, news organisations such as Reuters are conducting their own deepfakes experiments to stay one step ahead of the fake news disseminators. Detection of deep fakes is still largely an open research problem. Deepfakes are already approaching the limits of human perception to discern images. Automated techniques have focused on heuristics such as blinking patterns or incongruities in perspective and shading. It is unlikely that these will remain effective for very long. The arms race will continue for the foreseeable future, and as such detecting deepfakes may well remain an aspirational goal rather than something that can be relied upon as a solution.

[This is an Authors' Take post, which provides readers with an insight into current IP scholarship, featuring preliminary comments and thoughts from authors of articles accepted for publication in forthcoming issues of the Journal of Intellectual Property Law & Practice (OUP). The full text of this contribution, which will be included in our special Image Rights Issue, will be made available on Advance Access soon]

The Authors' Take - Putting a Face to the Game: The Intellectual Property Implications of Using Celebrity Likenesses in Videogames

Putting a Face to the Game: 
The Intellectual Property Implications of Using
Celebrity Likenesses in Videogames

by Yin Harn Lee

Lecturer in Law, University of Sheffield

Technological advances have allowed videogames to depict individual likenesses with an increasing degree of fidelity. Because of this, it is now not uncommon to see videogame characters bearing the likenesses of well-known celebrities. Often, this will be the outcome of a licensing arrangement between the videogame developer and the celebrity concerned. Disputes may arise, however, where a videogame developer chooses to recreate the likeness of a celebrity in its videogame without first securing the latter’s consent.

In various US states, the outcome of these disputes would be determined under the law relating to the ‘right of publicity’, which gives individuals the right to control the commercial exploitation of their name, image, voice, and other aspects of their identity; in a number of continental European jurisdictions, similar disputes would be decided under the law relating to the individual’s ‘right of personality’. The UK, however, has no equivalent legal framework. Disputes relating to the unauthorised use of a celebrity’s likeness in a videogame will therefore have to be determined under a range of different intellectual property regimes, in particular copyright law, the law of passing off, and trade mark law.

This article [which will be published as Advance Access here in a few weeks' time, and will be included in one of the next issues of JIPLP] will show that, while the unauthorised recreation of a celebrity likeness in a videogame is unlikely to amount to copyright infringement, the position may well be very different under the law of passing off and trade mark law. This is due to the expansion of the ambit of each of these regimes over the course of the last few decades. In recent cases, the courts have become increasingly willing to recognise that the likeness of a celebrity is capable of functioning as an indicator of origin and, as a corollary, to accept the possibility that the unauthorised use of such a likeness on a product may mislead or confuse the public into believing that the product was authorised or endorsed by the celebrity concerned. While the unauthorised use of a celebrity likeness in a videogame might appear to be far removed from the paradigmatic case of passing off or trade mark infringement, therefore, the applicability of these two regimes to such a scenario can no longer be dismissed out of hand.


[This is an Authors' Take post, which provides readers with an insight into current IP scholarship, featuring preliminary comments and thoughts from authors of articles accepted for publication in forthcoming issues of the Journal of Intellectual Property Law & Practice (OUP).]

Custom in the UK is required to sustain a passing off case

Author: Giles Parsons (Browne Jacobson LLP)

Starbucks (HK) Limited and Another v British Sky Broadcasting Group PLC and others [2015] UKSC 31 (13 May 2015)

Journal of Intellectual Property Law & Practice (2015) doi: 10.1093/jiplp/jpv132, first published online: August 20, 2015

The United Kingdom Supreme Court has unanimously held that a claimant in a passing off action must have a business with customers within the jurisdiction.

Legal context

The ‘classical trinity’ of elements that a claimant must demonstrate to succeed in a passing off action were set out by Lord Oliver in the Jif Lemon case, Reckitt & Colman Products Ltd v Borden Inc [1990] 1 WLR 491: goodwill attached to the claimant's goods or services; a misrepresentation by the defendant that his goods or services are the claimant's goods or services; and finally, damage to the claimant caused by the misrepresentation.

Goodwill is, according to Lord Macnaghten in Commissioners of Inland Revenue v Muller & Co's Margarine Ltd [1901] AC 217, the ‘attractive force which brings in custom’, but the courts in England and Wales also draw a technical distinction between ‘goodwill’ and ‘mere reputation’. Goodwill does not exist in a jurisdiction unless there has been business carried on in that jurisdiction (Anheuser-Busch Inc v Budejovicky Budvar N.P [1984] FSR 413).

However, different approaches have been taken in other common law jurisdictions.

The leading example of this is ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992) 106 ALR 465, in which the Federal Court of Australia held that, as we now live in a modern world with mass advertising and international commerce,

It is not necessary in Australia that a plaintiff, in order to maintain a passing off action, must have a place of business or a business presence in Australia; nor is it necessary that his goods are sold here. It is sufficient if his goods have a reputation in this country among persons here, whether residents or otherwise, of a sufficient degree to establish that there is a likelihood of deception among consumers and potential consumers and of damage to his reputation.

In that case, the plaintiff failed to demonstrate sufficient reputation in Australia in ‘Healthy Choice’.

ConAgra was cited with approval by the Supreme Court of Appeal of South Africa in Caterham Car Sales and Coachworks Ltd. v Birkin Cars (Pty) Ltd and Another (393/95) [1998] ZASCA 44. In their judgment, the Supreme Court of Appeal said that the correct question to ask was

whether the plaintiff has, in a practical and business sense, a sufficient reputation amongst a substantial number of persons who are either clients or potential clients of his business.

The Supreme Court of Appeal held that extent and locality of the business are still however relevant, as they can determine the scope of the reputation, whether any harm takes place; and as in ConAgra, the plaintiff failed to establish the necessary reputation to found the case.

In Starbucks v British Sky Broadcasting the Supreme Court considered the conflicting jurisprudence, but came to reaffirm the traditional English approach, which requires customers within the jurisdiction.

Facts

The claimants, a Hong Kong-based media group, provided internet protocol television (IPTV) under the names NOW BROADBAND TV and NOW TV. The set-top service was provided in Hong Kong, where it was very popular; in the UK, it was only accessible through YouTube, through the claimants' website and as part of in-flight entertainment.

The claimants had planned to launch in the UK, but were pre-empted by Sky's own NOW TV service. The claimants launched proceedings for trade mark infringement and passing off, which failed in the High Court and the Court of Appeal. The passing off aspect was appealed to the Supreme Court on the basis that the claimants' reputation in the UK was sufficient foundation for a claim in passing off.

Analysis

Lord Neuberger acknowledged the acute significance of this issue in an ‘age of global electronic communication’, and emphasized that ‘it is one of the great virtues of the common law that it can adapt itself to practical and commercial realities’. However, he thought that there was no clear trend away from the ‘hard line’ approach taken in previous English decisions, and emphasized that the law had to balance the competing interests of free competition and unfair competition. Lord Neuberger explained that a claimant who had

simply obtained a reputation for its mark in this jurisdiction in respect of his products or services outside the jurisdiction has not done enough to not justify granting him an effective monopoly in respect of that mark within the jurisdiction.

Part of the foundation for this appears to come from the decision in Maxwell v Hogg (1867) LR 2 Ch 307, in which Turner LJ had said that merely advertising without having commenced selling a product meant that the plaintiff had not provided ‘consideration’ for the ‘monopoly’. It is interesting to see this cited, as the notion of ‘consideration’ had previously been considered irrelevant in passing off; in the fourth edition of his textbook Passing Off: Unfair Competition by Misrepresentation (2011), Professor Wadlow states at paragraph 3-066 that ‘no such concept is relevant in passing off or trade mark law, and Maxwell v Hogg appears to be the only case in which it has been advanced’.

Lord Neuberger also found support for his decision in section 56 of the Trade Marks Act 1994. Section 56 protects well-known trade marks that belong to proprietors that are nationals of countries (other than the UK) which have signed the Paris Convention, and allows such proprietors to obtain an injunction against use in the UK of an identical or similar mark for identical or similar services where the use is likely to cause confusion. Although Lord Neuberger chose not to rule on the point, he saw ‘considerable force’ in the argument that, as Parliament had legislated to protect well-known marks in this way, it was not for the courts to extend the principle to marks which are not well known.

The Supreme Court also chose not to rule on whether a business which has not commenced trading but had launched a substantial advertising campaign could bring a claim in passing off. There is case law in Singapore and in England and Wales which supports the view that such activities could be the foundation of a claim in passing off, but to device that would involve overruling Maxwell v Hogg, and Lord Neuberger refrained from deciding the point.

Practical significance

The Supreme Court's decision is a clear affirmation that to maintain a passing off action in England and Wales one must have a business with customers within the jurisdiction.

This action as a whole has shown how difficult it is to enforce a brand that has little inherent distinctiveness, particularly when no trade has taken place within Europe or the UK.

Where possible, brand owners should choose a brand which is distinctive. Where there is little inherent distinctiveness, developing distinctiveness is vital.

Unless a company can show that it has a mark that is well known in the UK, or that it has business with customers in the UK, it will not have enforceable rights in the absence of a valid registered trade mark.

Rihanna T-shirt case: Paul Joseph speaks

Earlier today the Court of Appeal, England and Wales, upheld the decision of Mr Justice Birss in Fenty & Others v Arcadia Group Brands Ltd (t/a Topshop) & Another [2013] EWHC 2310 (Ch) -- the "Rihanna T-shirt" case which has attracted a good deal of attention among both lawyers and the public at large.

JIPLP is delighted that one of our Editorial Board members, Paul Joseph, was invited by the BBC to deliver an authoritative comment on this ruling: you can see Paul on the BBC video clip if you click here and scroll down a bit.

JIPLP has taken an interest in this instructive passing off action, publishing a Current Intelligence note by Darren Meale, "Passing off: Rihanna's face on a T-shirt without a licence? No, this time it's passing off" (abstract and details here). A subsequent Current Intelligence note "Boop oop a doop—protection for cartoon image of Betty Boop" by Jeremy Blum and Nicholas Round makes substantial reference to the Rihanna case. You can access their note on this weblog here.

Boop oop a doop—protection for cartoon image of Betty Boop

Authors: Jeremy Blum and Nicholas Round (Bristows LLP)

Hearst Holdings Inc and others v AVELA Inc and others [2014] EWHC 439, Chancery Division, England and Wales, 25 February 2014

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu068, first published online: April 29, 2014

Fresh from deciding in favour of Rihanna in Fenty and others v Arcadia Group Brands Ltd (t/a Topshop) and another [2013] EWHC 2310 (Ch), Birss J concludes that another (albeit fictional) ‘pin-up’, Betty Boop, is also deserving of protection due to the considerable efforts of trade mark owner Hearst.

Legal context and facts

In their recent article (Jeremy Blum, Nicholas Round and Tom Ohta ‘Personality disorder: strategies for protecting celebrity names and images in the UK’ (2014) 9(2) JIPLP 137), the authors explained that, since umbrella ‘image right’ protection is not provided in the UK, a creative and imaginative approach is required to protect name and image rights. In particular an important strategy is to educate the public that the image or celebrity name at issue actually denotes trade origin. Not all strategies are successful and there are examples of many famous losers, both fictional characters and real celebrities. These include Tarzan (TARZAN [1970] RPC 450 (CA)); the Wombles (Wombles v Womble Skip Hire [1977] FSR 62); and the band Linkin Park (LINKIN PARK LLC's Application [2006] ETMR 74).

In Hearst, the claimant owned several trade marks in relation to the cartoon character Betty Boop (including marks relating to the words ‘BETTY BOOP’ and a device mark for an image of Betty Boop) and contended that it was the only legitimate source of Betty Boop merchandise in the UK. The defendant, AVELA, contended that it was also a legitimate source of Betty Boop ‘imagery’ and that Hearst's trade marks were invalid. Hearst claimed for trade mark infringement and passing off (a further claim, for copyright infringement, is set to be tried separately).

In relation to the trade mark claims, Hearst considered that any unauthorized product bearing an image recognizable as Betty Boop would infringe the device mark regardless of the particular pose adopted by the character. Further, any such product would also infringe the word marks regardless of whether BETTY BOOP, BOOP or a slogan such as ‘Boop oop a doop’ was used. The passing off case related to two acts of deception: (i) deceiving the trade and public that Betty Boop merchandise sold under AVELA's licence is official merchandise (or authorized by Hearst); and (ii) deceiving AVELA's licensees that they had been granted an official licence (ie by Hearst).

AVELA's defence to both trade mark infringement and passing off was that the Betty Boop imagery appearing on the goods in question was purely decorative and made no representation about trade origin. Birss J recognized that this defence introduces a key problem in merchandising:

[W]hen famous names or images are applied to merchandise they are not necessarily being used as indicators of origin of the goods at all … what better way is there to describe a poster depicting the band LINKIN PARK [than] as a ‘LINKIN PARK poster’[?] (para 69).

This problem arguably resulted in the famous losses outlined above and was something which AVELA sought to rely on. As Birss J noted at para 66: ‘[AVELA's] defence can be summed up as follows: “Elvis lost (ELVIS PRESLEY trade marks [1999] FSR 60 CA) and so should Betty Boop”.’

Having considered at length the history of Betty Boop merchandising and efforts made by Hearst to build up a recognizable Betty Boop ‘brand’, Birss J found in favour of the claimants in both the trade mark and passing off claims. At para 110, Birss J stated:

[T]he effect of the claimants' trading has been to imbue the character with trade mark significance in the public mind. They do not need to look at the swing tag to make the assumption that it is official Betty Boop merchandise any more than they need to look at the swing tag on a t-shirt with Calvin Klein written in large letters across the front to assume that it is from Calvin Klein. Not all merchandising works in this way but in my judgment today and at all material times, in the UK (and the rest of Europe), Betty Boop is a sign which can convey that kind of information in the context of the goods in this case.

Analysis

The key to Birss J's finding was the work Hearst had done to develop the brand of Betty Boop and to educate the public that there was a single entity responsible for its origin. Birss J did not consider that Betty Boop's current fame was due to her appearance in 1930s cartoons, and instead attributed it to Hearst. For 20 years Hearst had been the sole source of Betty Boop merchandise in the UK and had controlled what and how her image had been presented to the public in order to achieve her present appeal. The judge also reviewed security tags on merchandise which consistently attributed trade mark significance to the image and name as well as identifying the source of origin. Additionally, Hearst had been very active in promoting Betty Boop licences to the trade and had 20–25 active licensees, which Birss J accepted was a ‘significant network for a character brand’. Notably, the licensees sometimes emphasized that they were ‘official licensees’. Hearst also has ‘substantial’ approval and quality control arrangements in relation to the brand and overall its efforts have resulted in impressive growth in retail figures since 2000.

Birss J pointed to evidence that members of the trade believed that a licence was required to sell Betty Boop merchandise and that Hearst or its agent should be contacted in order to obtain such a licence. Although based on inference, Birss J also considered that the public believed that there was a single official source of Betty Boop merchandise. Crucially, Birss J concluded that it was the character Betty Boop herself who was recognized by the average consumers and who acted as a sign. It did not matter what pose the character appeared in as her head was still ‘instantly recognisable’.

In summary, the judge concluded that Hearst's work had resulted in a Betty Boop brand that was recognized by the public as coming from a particular source and so deserved fairly broad protection. Birss J's comments in para 101 summarize the reasoning and arguably hint at the tacit existence of an image right:

[T]he fact that one cannot register a character or a concept as a trade mark does not mean that the public do not in fact recognise a character as having origin significance.

Practical significance

Hearst's success in this case highlights particular factors that the court will consider in ‘character merchandising’ cases and provides further guidance on the strategy that brand owners should adopt. Hearst was able to educate the public that it was the sole official source of Betty Boop merchandise by actively promoting the brand to licensees using tag labels which gave an impression of official merchandise from Betty Boop, and then controlling the quality of the brand to build the reputation.

The case shows the pre-Fenty reluctance to allow protection for ‘character merchandising’ cases can be overcome where the claimant can establish that the use, even on traditional merchandise, was denoting origin.

The judgment also suggests that such protection may be easier to achieve with fictional characters than with real celebrities. At para 107 Birss J stated:

[I]t seems to me that it is probably easier to educate the public to believe that goods relating to an invented character derive from a single official source than it might be for a real person, not least because copyright law may give the inventor the ability to control the reproduction of the character for a very long time.

However, as demonstrated in Fenty, it is by no means impossible for real celebrities to also benefit from ‘image right’ protection. The authors consider that the overall impression created by both Fenty and Hearst is that the breadth of protection the courts will allow will depend significantly on the efforts made by the brand holder in creating and maintaining the image/celebrity name as a brand denoting origin.

Passing off: Another ‘no’ from the Court of Appeal on survey evidence

Authors: Sarah Burke and Joel Smith (Herbert Smith Freehills LLP)

Zee Entertainment Enterprises Limited and others v zeebox Limited [2014] EWCA Civ 82, Court of Appeal, England and Wales, 24 January 2014

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu059, first published online: April 18, 2014

The Court of Appeal refused permission to adduce survey evidence in the first case to come before it on the admissibility of survey evidence in a passing off case since the landmark judgments of the Court of Appeal in Interflora Inc v Marks and Spencer Plc.

Legal context

In Interflora Inc v Marks and Spencer Plc [2013] EWCA Civ 319, Lewison LJ set out a strict test in relation to adducing survey evidence in trade mark cases, namely that ‘a judge should not let in evidence of this kind unless the party seeking to call that evidence satisfies him that (a) that it is likely to be of real value; and (b) that the likely value of the evidence justifies the cost’. Some uncertainty remained after the Interflora cases as to whether the tests as set out in them could be extended to survey evidence in passing-off cases, given that Lewison LJ had made certain obiter comments about different considerations coming into play in relation to passing-off cases, since it was necessarily a different legal question.

Facts

The appellants, Zee, owned a number of satellite and cable television channels, including Zee TV. In November 2011, zeebox Limited launched a free app marketed under the name ‘zeebox’, which acted as a second screen companion for use while watching TV. Zee issued proceedings against zeebox for trade mark infringement and passing off in July 2012. Zee carried out a pilot survey in September 2012 and a second pilot survey in May 2013, although the questions used in each survey were largely identical. Zee then sought permission to adduce survey evidence in support of its passing-off case, claiming that the surveys showed deception among the British Asian population. Birss J refused permission to conduct a full survey at an interim hearing in June 2013, finding that the survey failed the ‘real value’ test as set out by Lewison LJ in the Interflora cases.

Zee appealed to the Court of Appeal, citing five grounds of appeal:

that the judge failed to differentiate, in applying the real value test, between passing off and trade mark infringement cases;

that the judge failed to appreciate that the relevant public was a cultural and linguistic subsection of the UK public and not the population at large;

that the judge took too strict an approach to the real value test;

that the judge failed to take account of the fact that he had not found any criticism of the surveys to be proved; and

that the judge made errors in the assessment of the likely costs.

Analysis

The Court of Appeal dismissed the appeal on all five grounds, and refused permission to adduce the survey evidence, upholding the judgment of Birss J for additional reasons. Floyd LJ delivered the leading judgment, with Lewison LJ adding additional comments in his assenting judgment. The Court of Appeal found that Birss J should have gone further in deciding the value of the survey itself, and felt bound to exercise his discretion afresh. The most significant factor was that the survey was obviously flawed, and that any marginal value that it might have had was outweighed by the disproportionate costs of introducing such evidence. Whilst there was a balance to be struck in considering that the appellants would be prevented from adducing potentially relevant evidence, the Court of Appeal held that the ‘balance came down heavily in favour of refusing permission for the survey evidence’.

The Court of Appeal did not raise any issue with Birss J's application of the Interflora tests to this case, accepting that he had been live to the legal distinction and had not applied the real value tests too strictly in relation to a passing off case.

Real value (Grounds 1 and 3)

Lewison LJ made it clear that he had not intended his judgment in Interflora to invite a mini-trial of the strength of the parties' cases at the stage of deciding whether to allow a survey. The real value test is not intended to invite the court to evaluate the likely outcome of the case. If there was a special factor about the goods or services, or their consumers, survey evidence may well be of real value but this was not the case here.

Subsection of the UK population (Ground 2)

The pilot surveys had been directed at British Asians in the UK. Zee claimed that the trial judge would likely have little familiarity with its channels or the reactions of an ethnically distinct market to which it was directed. Floyd LJ was not concerned by the fact that the trial judge might not be a watcher of Zee TV (or indeed, a watcher of television at all). If the trial judge were equipped with knowledge of the extent and popularity of Zee's channels, he would be capable of assessing the susceptibility of watchers of those channels to any alleged deception when confronted with the zeebox sign. Floyd LJ saw nothing in this case which would not be readily understandable by the trial judge since the case concerned the delivery of television services to people in the UK.

Criticism of the survey (Ground 4)

The use of leading questions in the pilot surveys was criticized and, in particular, the fact that survey respondents were told that zeebox is an app or website ‘relating to TV’. The Court of Appeal found that this was unfair, given that no further information was provided as to the precise nature of zeebox's service. There was also criticism of the acontextual display of the zeebox sign in the survey, with Lewison LJ noting that, even in cases of alleged trade mark infringement, the acontextual comparison of mark and sign had been abandoned. The show card depicting the zeebox sign as shown to the survey respondents did not accord with how real-world users would encounter the zeebox app.

The Court of Appeal found that the judge had not gone far enough in considering the survey itself. The reliability of the survey forms an important part of the real value determination and this survey had ‘obvious flaws’.

Costs (Ground 5)

The cost of introducing the survey evidence (in the region of £100,000) was a factor that the judge could and should have properly borne in mind when making his decision. The estimated costs of £100,000 were found to be significant, especially when viewed from zeebox's perspective as a small start-up company.

Practical significance

Parties should give careful thought to the design of any pilot survey since the pilot survey will ultimately inform the full survey, if the court grants permission to proceed with a full survey. The court will consider the design of the survey and the questions in some depth in deciding whether to grant permission to adduce survey evidence. Survey questions should be drafted carefully and respondents to the survey should not be shown a mark and sign in circumstances devoid of context. Further, a survey should take care not to introduce factors that would not be present in normal use, and an attempt must be made to minimize the artificiality inherent in most surveys. Since passing off is a ‘real world’ cause of action, the circumstances of the real world should be present when carrying out the survey, in so far as this is possible.

It is clear that the real value test as set out by Lewison LJ in Interflora can be applied to passing-off cases despite the legal distinction between trade mark infringement and passing off. In this case, Lewison LJ has once again emphasized that survey evidence is not necessary in cases involving ordinary consumer goods or services. Parties should not seek to deploy survey evidence other than in exceptional circumstances, where the goods or services are sufficiently non-mainstream that the court is likely to need assistance by way of a survey.

Passing off and Unfair Competition: a JIPLP-GRUR Int event

"Passing off and Unfair Competition" is the theme of the third event held by the Journal of Intellectual Property Law & Practice with its German partners at GRUR Int.   This event, which is kindly hosted in the London office of Baker & McKenzie LLP, takes place on Thursday 23 January 2014 and the programme looks like this:

3.00 pm Registration

3.30 pm Welcome

3.40 pm Chairman’s introduction (Professor Jeremy Phillips)

3.45 pm Ben Allgrove (partner, Baker & McKenzie, London, and JIPLP contributor) looks at the operation of the UK's passing off law

4.15 pm Gert Würtenberger (partner, Würtenberger Kunze, Munich, and JIPLP editorial board member) gives us his perspective on Germany's unfair competition law

4.45 pm Break

5.00 pm Panel discussion, featuring Mr Justice Arnold (whose judgments in the Och-Ziff and Vodkat cases have taken British passing off law to the next level), plus JIPLP editorial board members Dr Birgit Clark and Professors Phillip Johnson and Christopher Wadlow

5.30 pm Questions from the floor

6.00 to 7.00 pm Reception

There is no charge for admission.  If you'd like to attend this event, for which CPD points will be available, please email JIPLP editor Jeremy Phillips on jjip@btinternet.com with the subject line "January event".

If, having registered for this event, you subsequently find that you cannot attend, can you please email to let us know, so that your place can be allocated to someone else whose name is on the reserve list.

‘Greek yoghurt’ gains protection

Author: Leigh Smith (McDermott Will & Emery UK LLP)

Fage UK Ltd & Another v Chobani UK Ltd & Another [2013] EWHC 630 (Ch), High Court, England and Wales, 26 March 2013

Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt123, first published online: July 17, 2013

The expression ‘Greek yoghurt’ has been held to possess a particular meaning for consumers and was therefore entitled to be protected.

Legal context

This case concerned the use of the term ‘Greek yoghurt’ to describe yoghurt produced by the defendants. The yoghurt had a thick and creamy texture as a result of the process used to manufacture it, described as straining, but was manufactured outside of Greece. The claimants brought an action for extended passing off to prevent the on-going use of the term by the defendants. Whereas traditional passing off prevents one trader from misrepresenting the goodwill of another, extended passing off has been relied upon to prevent the goodwill in a particular term, that a consumer would identify with a particular type of product or characteristics of a product, being exploited by a trader producing a product that does not fall within the consumer's understanding of the term.

This form of passing off was first recognized in Bollinger v Costa Brava Wine Co Ltd [1960] RPC 6 in respect of the term ‘champagne’. Extended passing off has since been relied upon to protect terms such as ‘sherry’ (Vine Products Ltd v Mackenzie & Company Ltd [1969] RPC 1), ‘Scotch whisky’ (John Walker & Sons Ltd v Henry Ost Company Ltd [1970] RPC 489) and most recently ‘vodka’ (Diageo North America Inc v Intercontinental Brands (ICB) Ltd [2010] RPC 12).

Extended passing off consists of the same elements as classic passing off, namely a requirement to demonstrate goodwill, misrepresentation and damage.

Facts

The claimants sold yoghurt on the UK market under the mark TOTAL which was manufactured in Greece using the process described above and described as ‘Greek yoghurt’. The claimants argued that the use of the term ‘Greek yoghurt’, as opposed to ‘Greek-style yoghurt’, would mislead consumers into believing the yoghurt was manufactured in Greece.

For the claim to succeed, Mr Justice Briggs first had to be satisfied that there was goodwill in the term ‘Greek yoghurt’. This required the claimants to show that a substantial number of people buying Greek yoghurt in the UK believed that the term conveys the message that the yoghurt was made in Greece, and that this added an attribute to the product other than geographic origin. Consumers must recognize the difference between this and ‘Greek-style’ yoghurt, which would be of the same consistency but produced outside of Greece. If the claimants satisfied this requirement, they then had to show that use of the term in connection with a product made outside of Greece was a misrepresentation, and that this misrepresentation would cause damage.

Analysis

Briggs J began by considering whether there was goodwill in the term. This, he noted, required the expression to add something attractive to consumers, rather than merely denote geographic origin. He also observed that previous cases, in particular Chocosuisse Union des Fabricants Suisse de Chocolat v Cadbury Ltd [1998] RPC 117 concerning the term ‘Swiss chocolate’, confirmed that ‘goodwill’ was not equivalent to ‘cachet’: in other words, the expression should denote a particular type of product but not necessarily a higher quality.

The claimants submitted evidence to support the assertion that consumers purchasing Greek yoghurt in the UK, in contrast with Greek-style yoghurt, believed that the yoghurt they purchased was produced in Greece. The claimants also submitted evidence to show that there was a naming convention that had been applied for over 25 years in the UK, subject to minor exceptions, that ‘Greek yoghurt’ was only used for yoghurt produced in Greece. Advice given to the defendants in the course of developing their product supported this proposition. There was also evidence to show that Greek yoghurt commanded a higher price per kilo than Greek-style yoghurt. The judge was satisfied that all yoghurt described as ‘Greek yoghurt’ sold in the UK by Fage or its competitors at all material times was yoghurt that was thick and creamy in texture and manufactured in Greece. He was further satisfied that a substantial proportion of consumers of Greek yoghurt would think it was produced in Greece, and that this conveyed something more than territorial origin. Accordingly, the claimants had established goodwill in the trade name.

Turning to whether there had been a misrepresentation, the judge considered that, once goodwill in the trade name was established, it was a clear misrepresentation to suggest that a product produced outside of Greece had been produced there. That the same method for producing the product had been used was immaterial, as the misrepresentation concerned the place of manufacture rather than the quality of the product. Revealing the true place of manufacture in small type on the reverse label of the product was not enough to avoid the misrepresentation.

Finally, the judge considered whether the misrepresentation caused damage to the claimants. He suggested that two types of damage were relevant in such cases. First, loss of sales and, second, erosion of the distinctiveness of the term the claimants sought to protect. In this instance, the judge formed the view that the latter damage was likely to occur. He therefore ordered that the defendants be prevented from using the expression ‘Greek yoghurt’ on their product.

Practical significance

The judge was persuaded by evidence in this case that demonstrated that a naming convention applied in the UK in relation to different types of yoghurt, which served to distinguish between ‘Greek yoghurt’ and ‘Greek-style yoghurt’. Curiously, the term ‘Greek yoghurt’, unlike other terms protected by way of extended passing off, receives no protection in its territory of origin. The judge refused leave to appeal; permission to appeal has, however, been lodged

Henry replica sucks

Author: Peter Groves

Numatic International Ltd v Qualtex UK Ltd [2010] EWHC 1237 (Ch) Chancery Division (England and Wales), 28 May 2010

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpq106

Although the defendant had taken care not to infringe any rights in the design for the Henry vacuum cleaner, its replica cleaner nevertheless amounted to passing off.

Legal context

The law on passing off gives a trader a remedy against others who appropriate its reputation. In the classic formulation, Lord Oliver of Aylmerton summed up the requirements of the law in three propositions:

• the plaintiff must establish a reputation;
• there must be a misrepresentation by the defendant (not necessarily intentional);
• there must be resultant damage or (in a quia timet action) likelihood of damage to the plaintiff's goodwill or reputation, arising from the erroneous belief caused by the misrepresentation.

In Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1995] FSR 169—the ROHO cushion case—it was invoked (unsuccessfully, on the facts of the case) to protect an inflatable cushion designed to make life more tolerable for wheelchair-bound people.

The judgment also considers the conditions for the grant of a quia timet injunction, and the treatment of survey evidence.

Facts

The claimant is the manufacturer of the highly-successful Henry vacuum cleaner, distinguished by its tub shape, black ‘bowler hat’ lid, name and human face (comprising eyes and mouth decals, the hose forming a distinctly elephantine nose). The defendant has for many years traded in vacuum cleaner spare parts, originally as George Hulme (Stockport) Limited under which name it was sued for copyright infringement some 30 years ago (Hoover plc v Hulme [1982] FSR 565), and latterly under its present name in which guise it has been involved in design right litigation with Dyson (see Dyson v Qualtex [2004] EWHC 2981 (Ch)).

In 2008 Qualtex decided to enter the vacuum cleaner market with a Henry ‘lookalike’. They had concluded that provided they chose a design in which all the myriad rights that can protect a design had expired, and avoided using any registered trade marks, they would be safe. They chose the 1997-model Henry as their starting point.

Qualtex engaged solicitors to approach Numatic to apprise them of this decision and to confirm that no rights would be infringed, stressing that they would not use the Henry name or the face, or anything confusingly similar to either. Numatic's patent attorneys responded with a mention of passing off, describing Henry's appearance as ‘quite simply, iconic’. They were disinclined to engage in a hypothetical discussion, requesting undertakings from Qualtex which they declined to give them.

Numatic then instructed solicitors, who asked for samples instead of the undertakings previously demanded and expressed Numatic's reluctance to assist Qualtex with the design of their product.

Some 11 months later, hostilities reopened with a somewhat aggressive email from Mr Hulme of Qualtex to his opposite number at Numatic, asserting that what they (Qualtex) were about to show at a cleaning equipment exhibition was not the stuff of a passing-off action. In fact, Qualtex had decided to replicate one of Numatic's commercial vacuum cleaner designs rather than that of Henry: its tub was deeper and it had a circumferential skirt at the bottom, it lacked face (other than the nose) and branding, but only an aficionado would have appreciated the difference.

Although Qualtex argued that what they had shown was a prototype, they did secure some orders and advised their supplier in China that they had customers interested. Numatic's solicitors commissioned market research, eventually writing to Qualtex telling them that they were taking witness statements and asking for undertakings. Qualtex's new solicitors replied that the product was intended primarily for commercial use: one particular theme that runs through the dispute is the point that the machines might be supplied without branding, so the buyer could apply their own identifiers – perhaps as a badge of origin, but more likely as a precaution against their employees running off with the machines. At that point, Numatic commenced proceedings, and despite Qualtex having shifted their attention to producing a new design completely free from passing off worries, the matter proceeded inexorably to trial to secure the power of undertakings to the court and for the matter of costs to be determined.

Analysis

The action was a quia timet one, in that the claim was that the claimant was likely to suffer damage. On the facts there was a threat to make the Henry replica, but that threat did not continue (the judge, Floyd J, found) after service of the defence, which contained an undertaking not to sell the prototype, with a carve-out in the interim injunction granted shortly thereafter by Sales J to enable the defendant to sell 100 machines which had been supplied to its Irish operation. Qualtex offered no undertaking to the court (which would have been an admission of liability) but, as the judge said, it would be wholly inconsistent with the defence for them to revert to the Henry replica. Whether that would mean that Numatic would not get their injunction was something that fell to be argued about after the trial.

Evidence of confusion was provided by market research surveys in which consumers had been asked questions, which yielded a number of witness statements and eventually a smaller number of witnesses. There was criticism of the survey, with leading questions suggesting to respondents that the product about which they were being questioned was one that the might have seen on the market (‘have you got one?’) or which was known by a name (‘can you tell me what it is called?’): a neutral form of words is required. Nevertheless, there was sufficient evidence to demonstrate that deception might be expected to take place: consumers would perceive the Qualtex machine as being a member of Henry's family.

As for the matter of passing off, the question for the judge was whether the replica, devoid of facial features (save for the unavoidable nose) and Henry name, amounted to a misrepresentation. There was no real doubt that Numatic had a protectable goodwill and reputation in the combination of features that made Henry what it was. They had educated the public to recognise the anthropomorphic character and to identify it with a particular source of goods. The omission of the name and face was not enough to avoid a passing off – the overall shape and the black bowler were the indicia of the real thing in the public eye.

Practical significance

The case reminds us that no area of IP law is an island entire of itself, and a clearance exercise that omits a relevant area of law is a waste of time. Design protection has a finite life. For the unregistered variety life is short, but the design may with care become evergreen as the crucial point of reference for consumers searching for specific goods. Moreover, passing off requires no intention on the part of the defendant: reciting the mantra ‘I am not trying to pass off my goods as yours’ affords no defence.

Firecraft: the danger of estoppel following Trade Mark Registry proceedings

Authors: David Cran and Georgia Warren (Reynolds Porter Chamberlain)

Evans and another (t/a Firecraft) v Focal Point Fires plc [2009] EWHC 2784 (Ch), 10 November 2009

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp237

The High Court granted summary judgment to the claimants in a passing off case because an earlier Intellectual Property Office (IPO) decision that the same claimants had an actionable claim for passing off against the same defendant, a decision which resulted in the invalidation of the defendant's trade mark under section 5(4)(a) of the Trade Marks Act 1994.

Legal Context

By section 5(4)(a) of the Trade Marks Act 1994 (‘TMA’), a trade mark shall not be registered if its use in the UK is ‘liable to be prevented by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade’.

The elements that must be proved to demonstrate passing off are:

* Goodwill attached to the relevant goods or services;
* A misrepresentation by the defendant to the public (whether or not intentional), for example one that leads, or is likely to lead, the public to believe that the goods or services offered by him were those of the claimant; and
* Damage to the claimant, for example, arising from the erroneous belief (caused by the defendant's misrepresentation) that the source of the defendant's goods or services is the same as the source of those offered by the claimant.

Cause of action estoppel applies where litigation has occurred previously in respect of the same subject matter, and was subject to a final and conclusive judgment. It prevents a party to that previous litigation from re-litigating the same claim.

Issue estoppel applies where a particular issue has previously been litigated and decided by a court as a necessary issue. If that same issue is relevant to subsequent proceedings between the same parties, it cannot subsequently be reopened for judgment.

Hormel Foods Corporation v Antilles Landscape Investments NV [2005] EWHC 13 (Ch) established that a person is barred by cause of action estoppel from attacking the validity of a trade mark in the High Court where that person had previously unsuccessfully attacked the mark before the IPO.

However, the Court of Appeal in Special Effects Limited v L'Oréal SA and L'Oréal (UK) Limited [2007] EWCA Civ 1 allowed a defendant to counterclaim for the invalidity of a trade mark in infringement proceedings despite having been unsuccessful in opposition proceedings in the registry, on the basis that there was no cause of action or issue estoppel.

Facts

Since 1991 the claimants had traded throughout England and Scotland in the manufacture, sale, and installation of stone fireplaces under the name ‘Firecraft’.

The defendant, Focal Point Fires plc, was a leading manufacturer of gas fires in the UK, making gas and electric fires since 1993. Around 2000, the defendant started to supply its fire range under the brand name ‘Firecraft’, having first instructed trade mark attorneys to establish whether it could use the name. The trade mark search came back clear and the defendant applied to register ‘Firecraft’ for various goods in class 11 including ‘gas fires; electric fires; fires simulating fuel effect’ in February 2000. The mark was registered on 1 September 2000.

The claimants claimed that they were not aware of the defendant's use of ‘Firecraft’ until May 2006. A request for invalidation of the defendant's trade mark was filed with the UK Intellectual Property Office (‘IPO’) in May 2007.

In November 2008 the claimants' invalidation application (on the basis of section 5(4)(a) of the TMA) came before an IPO hearing officer. The claimants successfully argued that they had an actionable claim for passing off against the defendants in relation to the ‘Firecraft’ mark as at the trade mark application date. As a result, the IPO held that the defendant's trade mark was invalid under section 5(4)(a). While the defendant did not appeal, neither did it stop trading under the ‘Firecraft’ name.

In March 2009 the claimants applied to the High Court for summary judgment on a claim for passing off against the defendant. The claimants argued that they were entitled to summary judgment as the IPO decision had established the defendant's primary liability for passing off. The claimants also argued that the defendant could not challenge the decision due to issue estoppel, cause of action estoppel, and/or abuse of process. As a result, the claimants submitted that all that the High Court needed to determine was the remedy to be granted (as the IPO hearing officer did not have the power to do so).

Analysis

The judge, Peter Smith J, agreed with the claimants' arguments that they were entitled to summary judgment on the basis of the IPO hearing officer's decision. He also agreed that the defendant was not able to challenge the decision due to cause of action and issue estoppel and because it would be an abuse of process.

As the judge noted, the claimants could choose to challenge the validity of the trade mark either before the IPO or in the High Court. However, the claimants' reliance on the IPO decision limited its choice of remedy as the IPO did not have the jurisdiction to grant an injunction or award damages. Consequently, the claimants only sought a declaration from the Court, rather than an injunction or damages. The judge noted that these matters remained open.

Even though the IPO decision concerned the existence of a cause of action for passing off 9 years earlier, at the time of the trade mark application, it did not follow that the claimants did not still have such a cause of action. Indeed, if there had been a sustainable argument on this point at the time of the IPO hearing, the defendant would have run it. The IPO would not have found the mark to be invalid if there was no continuing breach.

Cause of action estoppel
The judge rejected the defendant's argument that the IPO had only come to a decision on the validity of the trade mark and not in relation to establishing a cause of action in passing off. Clearly, the IPO could not have found that the trade mark was invalid under section 5(4)(a) without also establishing that a cause of action for passing off subsisted. In order to demonstrate this, the claimants would have had to adduce satisfactory evidence to demonstrate each of the three elements of passing off.

Issue estoppel
The defendant argued that the IPO was not a court of competent jurisdiction in relation to the relevant issues: its role was to manage the trade mark register and to adjudicate on any disputes arising from it. This being so, the defendant was not estopped from arguing passing off before the High Court. The judge disagreed. The IPO had determined whether the trade mark registration was invalid. To do so, it had to establish a subsisting cause of action for passing off as at the trade mark registration date. This was central to the IPO proceedings.

The defendant also argued that there could be no res judicata in a changing situation. Again the judge disagreed. The IPO had had to decide whether damage was likely to be caused to the claimants by passing off, which was akin to a quia timet test (a quia timet injunction restrains wrongful acts which are threatened or imminent but have not yet commenced). The IPO not only supported quia timet but also found damage to the claimants' goodwill at the trade mark application date. If the defendant had been able to demonstrate in the subsequent action that the circumstances had changed (eg the claimants had ceased trading), that would have been relevant. However, it appeared that they had not.

Abuse of process
The judge stated that the defendant's decision to provide limited evidence in relation to the IPO invalidity proceedings with a view to producing ‘better evidence’ in the High Court should be categorized as an abuse of process. Costs recovery in successful IPO proceedings was limited and the claimants had incurred substantial costs in establishing a passing off claim that they would not recover. The claimants should not incur further costs to demonstrate this again before the High Court. Further, it was open to the defendant to appeal the IPO decision in order to adduce further evidence, but it chose not to do so.

While the IPO registrar was powerless to prevent the further use of the mark by the defendant or to make an order for damages, the declaration as to invalidity meant that the defendant no longer had a mark which it could enforce against others. The defendant had underplayed the significance of the IPO decision.

The judge considered the two authorities on this area, Hormel and Special Effects. Special Effects made the position clear regarding opposition proceedings, but that did not arise here. Hormel dealt with an unsuccessful challenge to validity. The judge held that the converse of that judgment was equally true. It could not be right to allow a defendant to seek to re-run a successful adverse decision on validity against it.

Practical Significance

This decision highlights the possibility that, if a claimant succeeds in invalidity proceedings before the IPO, it can use that invalidity declaration to obtain relief in the High Court without the need for further evidence. In other words, it can opt for the cheaper route to establish passing off and obtain relief. However, it should be borne in mind that these claimants only obtained a declaration. While the option to seek an injunction and damages remained open to them, they would need to establish before the court that they should be awarded in the circumstances.

It is understandable that the defendant in this case believed the IPO proceedings dealt with the issue of invalidity only and so decided not to adduce extensive evidence on the passing off point. However, this case is a warning not to underestimate IPO proceedings and to submit all relevant evidence in support of your case as courts will ensure that parties that have had the opportunity to put their case before the IPO do not get a ‘second bite of the cherry’ in court. The case of Hormel suggests that this approach is not limited to passing off cases but may also apply in other circumstances where, having brought proceedings before the IPO, parties then look to bring a court action.