Thomas Pink wins PINK trade mark dispute

Alexander Borthwick (Powell Gilbert LLP)

Thomas Pink Limited v Victoria's Secret UK Limited [2014] EWHC 2631 (Ch)

Journal of Intellectual Property Law & Practice (2015) doi: 10.1093/jiplp/jpu252, First published online: February 11, 2015

Following a trial before the High Court, England and Wales, Mr Justice Birss held that use by Victoria's Secret of the sign PINK infringed trade marks owed by Thomas Pink.

Legal context

The court considered issues of infringement and validity under the Trade Marks Act 1994 and the Community Trade Mark Regulation 207/2009.

Facts Thomas Pink's trade marks

Thomas Pink (TP) asserted two trade marks against Victoria's Secret (VS):

(a) A Community trade mark (CTM) for goods in various classes including class 25 (‘clothing, footwear, headgear’):

(b) A UK trade mark (filed as a series of two marks) for goods in various classes including class 25:

Victoria's Secret's uses of the trade marks

From 2012 onwards, VS made various uses of the sign PINK in the UK, as illustrated below.

Thomas Pink's claims

TP argued that VS's use of PINK as described above infringed the trade marks under ss 10(2) and 10(3) of the Act (the equivalent of Articles 9(1)(b) and 9(1)(c) of the Regulation). Briefly, these provisions prevent use in the course of trade of a sign that is identical, or similar, to a registered trade mark in relation to:

goods and services that are at least similar to those for which the mark is registered where there exists a likelihood of confusion on the part of the public and

goods and services, where the mark has a reputation in the Community/UK and the use of the sign is without due cause and takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the mark.

VS argued by way of defence that the UK mark was invalid as lacking distinctiveness and that the CTM should be revoked for non-use.

Analysis

The case gave rise to the following issues of interest.

Validity of the trade marks

As to distinctiveness of the UK mark, Birss J held that this mark did not have inherent distinctiveness: the mark was predominantly the word ‘pink’, which described a characteristic of clothing. In his view, the rectangular box and the lettering did not add anything visually significant.

VS sought to argue that TP had not acquired distinctiveness in the UK mark because TP had not used it in the forms in which it appeared on the register. Birss J disagreed, holding that TP was entitled to rely on use of a registered mark in a form that differed in elements which did not alter the distinctive character of the registered mark: the differences between the trade marks were minor, and the most important element was the word PINK in a special format. Accordingly, the extensive use made by TP of the CTM resulted in the acquisition of distinctiveness by the UK mark. Consequently, the UK mark was held valid.

Regarding revocation of the CTM for non-use, under Article 51(1)(a) of the Regulation, a trade mark is liable to be revoked unless it has been put into genuine use for a continuous period of five years in the Community.

In CIPA v Registrar of Trade Marks (Case C-307/10, ECLI:EU:C:2012:361, the ‘IP Translator case’), the Court of Justice of the European Union (CJEU) ruled on the scope of protection conferred by a trade mark with a specification that uses ‘class headings’. One of the CJEU's rulings was that the goods and services for which an application is made to register the trade must be identified with sufficient clarity and precision to enable the competent authorities and economic operators, on that basis alone, to determine the extent of the protection conferred by the trade mark. Relying on this decision, VS contended that the class heading for class 25, ‘clothing’ was too vague.

Birss J disagreed. He held that ‘clothing’ was a sufficiently clear and precise term. Further, in light of TP's evidence of use in relation to a wide range of garments, ‘clothing’ was a fair description of TP's actual use. Accordingly, there had been genuine use in respect of clothing.

While VS was successful in arguing that a number of other goods should be removed from the specification on the basis of non-use, this outcome did not affect the question of infringement.

Infringement under s 10(2)/Article 9(1)(b)

Following Specsavers v ASDA [2012] EWCA Civ 24, the context in which the defendant's sign appears is relevant to the question of infringement under s 10(2)/Article 9(1)(b). In that case, the Court of Appeal held at paragraph 87 that, ‘[i]n assessing the likelihood of confusion … the sign is not to be considered stripped of its context’.

VS submitted that it was material that each garment had a swing tag or label that featured the words VICTORIA'S SECRET, that the garments were sold in shops which featured numerous prominent references to VICTORIA'S SECRET, and that VS's PINK branded stores were in some instances either part of, or adjacent to, a store branded VICTORIA'S SECRET. However, the judge held that the post-sale context was a realistic and fair context in which to consider the effect of the use of the sign on clothing: where PINK was emblazoned prominently on a garment, the sign was meant to be seen by persons other than the wearer after purchase. The use of VICTORIA'S SECRET on swing tags, on labels and in relation to VS's stores was therefore not part of the assessment for these uses of PINK. In contrast, use of PINK on the swing tags and garment labels was to be considered in the context of VS's stores because that was where the average consumer would encounter them. For the store sign, it was fair to consider the front of the store.

Turning from the context of the allegedly infringing uses to the likelihood of confuson, Birss J held that the use of PINK on VS's clothing gave rise to a likelihood of confusion with TP's trade marks. The goods in question were identical. The sign PINK would not be seen by the average consumer as purely descriptive or decorative; some origin significance would be perceived. Using PINK in a device or slogan slightly reduced the similarity with TP's trade marks—but not enough to avoid a likelihood of confusion. Therefore such use infringed.

Similarly, the store front branding infringed the trade marks: the use of VICTORIA'S SECRET here (not visible in the photograph above) was not sufficiently prominent to dispel the risk of confusion. However, the use of PINK in conjunction with VICTORIA's SECRET on swing tags and labels did not infringe under s 10(2)/Article 9(1)(b). In this instance, the retail context was determinative of confusion. Consumers encountering the sign PINK here knew they were in a VS store and the swing tags, labels and receipts were all clearly marked VICTORIA'S SECRET.

So far as concerns the infringement claim under s 10(3)/Article 9(1)(c), given his findings in relation to s 10(2)/Article 9(1)(b), Birss J considered the use of PINK with VICTORIA'S SECRET only on swing tags and labels in VS stores.

In his judgment, TP's trade marks had sufficient reputation for the purpose of these provisions: TP had established a link between its marks and VS's use since consumers would see a sign reminiscent of them. VS's use was without due cause. In relation to detriment, VS's business was said to aim for ‘sexy, mass market appeal’; as a result of VS's use, TP's trade marks would be associated with a mass market offering, thereby reducing their luxurious reputation.

Practical significance

The finding that a trade mark may acquire distinctiveness through use of a non-identical sign may assist trade mark owners who, as was acknowledged at paragraph 95 of the judgment, ‘do not always and consistently use a mark in precisely the form as registered’. Birss J added that proprietors should not be barred from relying on oral use of prominent parts of a word or device mark to support the acquisition of distinctive character.

In light of Birss J's finding that ‘clothing’ was sufficiently clear, it remains to be determined whether the CJEU's decision in IP Translator has the effect that a lack of clarity in the specification is a basis for revocation of a trade mark (in addition to being a ground for refusal to register the mark). This point is the subject of two conflicting judgments: Total Ltd v YouView TV Ltd [2014] EWHC 1963 (Ch) and Stichting BDO v BDO Unibank, Inc [2013] EWHC 418 (Ch).

Finally, the case illustrates that the applicable context in which the defendant is deemed to use its sign under s 10(2)/Article 9(1)(b) remains a contentious issue and may directly determine infringement. Here, the finding as to likelihood of confusion for the uses of PINK on clothing (where only the post-sale context was held relevant) may be contrasted with that on the swing tags and labels (in which prominent pre-sale use of VICTORIA'S SECRET counteracted the risk of confusion). The rationale for this distinction is expected to receive further consideration when VS's appeal is heard later this year.

Balancing tool or escape clause? Proportionality in temporary relief proceedings before the Greek courts

Author: Nikos Prentoulis (Prentoulis Lawyers & Consultants)

Single-Member First Instance Court of Athens, Decision No 4209/2014

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu135, first published online: August 1, 2014

A recent judgment of the Athens First Instance Court in preliminary injunction proceedings over trade mark infringement illustrates how the principle of proportionality may be (mis-)used.

Legal context

Within a ‘classic’ likelihood of confusion and famous trade mark violation case, the interesting part of the judgment lies in the court's interpretation of Article 155 of Greek Law No 4072/2012 on Trade Marks, which subjects any corrective measures for trade mark infringement to the balancing ‘hand’ of the principle of proportionality, in conformity with Articles 3(2) and 10(3) of Directive 2004/48.

Proportionality is no stranger to European intellectual property law (see Article 20 of the ‘InfoSoc’ Directive 2001/29) and it also informs the application of Articles 692(1), 692(3), 731 and 732 of the Greek Code of Civil Procedure, setting out the powers of Greek judges in temporary relief proceedings to ‘provisionally regulate’ the disputed ‘situation’, without being bound by the particular demands of the litigants. However, the express inclusion of the principle of proportionality in the normative ethos of the recently revised Greek trade mark law, centralizes its role in trade mark adjudication.

Facts

Hard Rock initiated preliminary injunction proceedings against a Greek entity, based in Athens, trading in apparel, accessories and souvenirs on the well-known Paradise beach in the island of Mykonos. Hard Rock alleged unauthorized use of its Greek and Community HARD ROCK CAFE and Community ROCK SHOP trade marks for similar goods and services and on store signage. The action was accepted and the preliminary injunction request was granted, but the court dismissed the applicant's request to publish the decision either on the internet (in a web news portal) or in the press. According to the court, the defendant had ‘already’ (presumably at the time of the hearing in November 2013) ceased the unauthorized use of the marks. Accordingly, the orders for preliminary injunction and seizure of infringing items constituted ‘adequate’ corrective measures. Publication of the judgment was further specifically denied due to the ‘limited scope’ of the infringement, obviously as a result of the cessation of the infringement.

Analysis

One can reasonably question this particular part of the judgment. ‘Heralding’ that it has stopped the alleged infringement, after the end of the high-season in the Greek islands (May–September), the defendant should not have impressed anyone. The minimal commercial interest in the tourist market in the Greek islands after September is common knowledge in Greece; just ask any anti-counterfeiting manager responsible for the territory. Post-September trade mark infringement in the Greek islands could be of ‘limited scope’, but infringement between May and September is by definition severe. Significantly, Hard Rock filed the action in early July, which can only mean that the infringement subsisted within the high season.

Moreover, why would anyone who has ceased the use of the claimant's marks ever set foot in the courtroom (unless he is waiting for next May)? Conventional wisdom and IP practice in Greece state that taking down marks and then appearing in court to argue against an injunction is usually a sign that one does not particularly savour committing oneself to not repeating the use of the marks in the future.

One may argue that the qualities of the infringing behaviour should not inform the application of proportionality and render it a ‘punitive’, ‘outing’ mechanism. So, why does the judgment mention it?

But even if that were the case, publication of the judgment is per se a standard corrective measure of trade mark infringement, even in temporary relief proceedings. Considering that trade mark law undeniably also protects consumers' interests, publication has long been advocated and consistently granted as an effective remedy for IP infringement. Moreover, Greek trade mark law, via its recent revision in 2012, explicitly provides for publication of judgments as a civil remedy in trade mark infringement cases. In addition, privacy concerns cannot hinder publication since court judgments are a matter of public interest, subjected to the demand for transparency of the exercise of the judiciary powers within a democratic society.

Accordingly, publication of a preliminary injunction judgment can essentially be hindered when the case is a doubtful one or when the impact of the infringement has indeed been minimal. But non-publication cannot be justified by the defendant having ceased the use of the marks involved. Moreover, by all standards, the infringing use of a well-known mark both on goods and store signage in Mykonos in the summer is anything but minimal.

In addition, the order for the provisional seizure of infringing items and store signage, which had already been removed by the defendant, appears acutely incompatible with the court's own reasoning. The version of proportionality inferred from the particular judgment should direct the court against such (fruitless) seizure.

The court may very well have had good reasons for rejecting the publication request, but such reasons are not evident in its reasoning; nor can they even be inferred from it. The court makes no reference, for example, to a possible swift compliance to a cease and desist letter before legal action, or any fact or circumstance that could validate its reading of proportionality.

Practical significance

Proportionality is a tool. This is not a very nice word in the human rights vocabulary, from which proportionality originates but, in adjudication terms, it is a very accurate definition. As a tool, it allows the court of a statutory law jurisdiction to ‘maneouvre’ within the particular factual environment of the case in order to deliver a sound and fair judgment. But ‘fair’ does not mean ‘free-ride’ (at least not in cases where leniency is not warranted); proportionality is not a ‘forgive and forget’ mechanism.

And this is where the danger of an interpretation of proportionality along the lines of this judgment lies: in distorting its role as a balancing tool of overly strict corrective measures and subverting the clear pro-IP rights spirit of the Greek trade mark law.

One may argue that the concerns raised above are somewhat ‘disproportionate’ themselves; this may just be an isolated ‘over-leniency’ case. But one cannot stress enough the importance of not mistaking proportionality for a single-sentence escape mechanism when, right or wrong, any court considers certain remedies as overly austere.

In defence of Greek courts, it should be mentioned that in another recent judgment of the Single-Member First Instance Court of Athens in main proceedings (555/2014), proportionality was genuinely employed to limit publication of the operative part of the judgment in the press and not also on the internet. Publication on the internet might have been more effective. Still, this judgment illustrates the intended role of proportionality.

Gold bear wars reloaded

Author: Birgit Clark (Venner Shipley LLP, London)

Higher Regional Court of Cologne (Oberlandesgericht Köln), Case ref: 6 U 230/12, 11 April 2014

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu128, first published online: July 16, 2014

Disagreeing with the first instance court, the Higher Regional Court of Cologne held that sweetmaker Lindt's three-dimensional gold-foiled chocolate bears did not infringe Haribo's well-known GOLDBÄREN gummy bear (word) trade marks.

Legal context

In accordance with Article 5(2) of the European Union's Trade Mark Directive, Article 14(2) No 3 of the German Trade Mark Act (MarkenG) provides that it constitutes trade mark infringement ‘if a third party without having consent of the trade mark owner in the course of trade exploits the distinctive character or the repute of a well-known trade mark in relation to goods or services which are not similar to those for which the trade mark is registered without due cause and by such use takes unfair advantage of the distinctive character or the repute of the trade mark’.

Facts

German confectioner Haribo had sold its multi-coloured gummy bears wrapped in gold-coloured packaging since the 1960s and owned various registered trade mark rights in these, inter alia, covering confectionery: GOLDBÄR (in English: gold bear) and its plural form GOLDBÄREN as well as its ‘Goldbär device’; a yellow-gold coloured bear device wearing a red ribbon bow. Haribo's competitor, Swiss confectioner Lindt, producer of the well-known chocolate Gold Bunnies, had made and sold gold-foil wrapped chocolate bears (the ‘Lindt Teddy’, wearing a red ribbon bow) since 2011. Haribo took objection and brought a claim against the distribution of Lindt's chocolate bears in Germany based on its trade mark rights, asking for information, damages and the destruction of Lindt's products. In essence, Haribo argued that Lindt's bears amounted to a three-dimensional representation of Haribo's gummy bear trade marks. Lindt denied infringement and argued that gold foil and red ribbon as used on its chocolate Lindt Teddies were the same as those used on its well-known Easter chocolate Gold Bunnies. Lindt also stressed that it had intentionally refrained from using brand names such as ‘Goldbär’ or ‘Gold Teddy’ and that gold was a traditional Christmas colour. The Swiss chocolate maker thus invited the court to find that the competing products did not look in any way similar so that consumers would not be confused.

Analysis

The first instance court, the Regional Court of Cologne (Landgericht Köln, 33 O 803/11, 18 December 2012) agreed with Haribo and held that Lindt's three-dimensional gold-foiled chocolate bears amounted to an infringing ‘visual representation’ of Haribo's well-known GOLDBÄREN gummy bear word mark under Article 14(2) No 3 MarkenG. In view of the Landgericht, the appearance of the shape of Lindt's chocolate bears inevitably produced connotations with Haribo's bears.

Bearing in mind that there had so far been no decision by the German Federal Court of Justice (Bundesgerichtshof) on the question of a conflict between a word mark and a three-dimensional product design, the first instance judges emphasized that that there could be similarity between different ‘categories of trade marks’.

The Landgericht therefore applied legal principles which the Bundesgerichtshof had previously developed in precedents concerning a conflict between word marks and figurative trade marks (BGH GRUR 1971, 251, 252—Oldtimer; BGH GRUR 2004, 779, 783—Zwilling/Zweibrüder) and according to which there could be similarity where there was not only a ‘concordance in theme’ but where a term was the ‘obvious, unforced and exhaustive description’ adopted by consumers.

On Lindt's appeal to the Higher Regional Court of Cologne, the appeal judges agreed with Lindt and confirmed the lower court's view that—in theory—a word trade mark, such as ‘Goldbär’, could be infringed by a three dimensional shape, such as the defendant's chocolate teddy. However, the appeal court did not agree with the Landgericht's application of the Bundesgerichtshof's precedents in the Oldtimer and Zwilling/Zweibrüder cases on a potential similarity between different ‘categories of trade marks’. The appeal judges agreed with both parties that Lindt's teddy shape was a complex sign but did not believe that the allegedly infringed sign (here: Haribo's gold bear) was the obvious, unforced, self-contained and distinctive title and thus the closest and most fitting description of the Lindt teddy shape. The judges explained that there were several additional levels of abstraction that separated the chocolate teddy shape from the Goldbär word mark.

Further, the overall impression conveyed by Lindt's teddy was not only based on its shape and gold colour wrapping, red ribbon and the imprint of ears, face and paws but also affected by the fact that Lindt's name and logo and the words ‘Lindt Teddy’ were prominently displayed on the teddy's stomach. In this context the court also referred to the Higher Regional Court of Frankfurt's precedent in the Gold Bunnies dispute cases between Lindt and its competitor Riegelein (GRUR-RR 2012, 255), in which the Frankfurt court had found that that the shape and colour of the Gold Bunnies were of a lower level of distinctiveness than the respective word elements (‘Lindt’ versus ‘Riegelein’) displayed on the bunnies. Applying this guidance to the case at hand, the Cologne judges concluded that that consumers would regard the word element ‘Lindt-Teddy’ in particular as an indication of origin, bearing in mind that the ‘Lindt-Teddy’ was a seamless addition to Lindt's established Gold Bunny product line. The court thus disagreed with Haribo's view that Lindt had taken unfair advantage of Haribo's Goldbär by ‘approximating’ its Lindt teddy to Haribo's gold bears in order to exploit the expectations of quality that consumers associate with Haribo's bears. The judges further explained this by pointing out that Lindt was a well-known confectionery manufacturer and the allegedly infringing Lindt Teddy product an obvious addition to Lindt's product line of gold-foiled chocolate shapes.

Practical significance

Whether the guidance developed by the Bundesgerichtshof for conflicts between word and device marks (similarity, where the later mark is an ‘obvious, unforced and exhaustive description’ of the earlier mark) may equally be applied to conflicts between word marks and three-dimensional shapes is a crucial one, bearing in mind the impact this can have on search strategies and advice when it comes to clearing any category of (shape) trade mark (or designs) for use and registration in Germany. In its closing remarks the Higher Regional Court of Cologne stated that the question of such a ‘cross collision’ (Überkreuzkollision) of trade marks was indeed of a ‘fundamental nature’. It is now expected that Haribo will appeal the matter to the Bundesgerichtshof, which may in turn even refer the question to the Court of Justice of the European Union for pan-European guidance.

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.

The Belgian beer battle: the scope of protection afforded to colour marks

Author: Jeroen Muyldermans (Altius, Brussels)

InBev Belgium v Brouwerijen Alken-Maes, Court of Appeal of Brussels, 2012/AR/1999, 21 October 2013

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu020, first published online: March 4, 2014

The Court of Appeal of Brussels confirmed a first instance decision accepting the validity of the abstract Benelux colour mark blue owned by Belgian beer brewer Alken-Maes and finding that the mark had been infringed. This decision clarifies the scope of protection afforded to colour marks against use of identical or similar signs.

Legal context

The unified Benelux trade mark law is governed by the Benelux Convention on Intellectual Property (BCIP). Article 2.1 BCIP, which corresponds to Article 2 of the Trade Mark Directive (TMD), stipulates that a trade mark may consist of any signs capable of being rep­resented graphically, provided that such signs are capable of distin­guishing the goods or services of one undertaking from those of other undertakings.

The requirements for the graphic representation of a trade mark are that it be clear, precise, self-contained, easily accessible, intelligible, durable and objective (Case C-273/00 Sieckmann [2002] ECR I-11737, para 55). In the context of a colour or colour combination, this implies, among other things, that filing a sample of the colour is insufficient, as this may deteriorate over time. Instead, it is indispensable to designate the colour using an internationally recognized identification code, such as the Pantone Matching System or the RAL Colours system (Case C-104/01 Libertel [2003] ECR I-03793, para 37).

It is generally accepted that, since a colour is not inherently capable of distinguishing the goods, distinctiveness without prior use is impossible except in exceptional circumstances. This limitation can be avoided by showing that the mark has acquired distinctive character through use. If the colour mark has passed the test of familiarization, it may prevent third parties from using identical or similar signs in the course of trade. Those conditions are provided in Article 2.20.1 BCIP (Article 5 TMD).

Facts

Alken-Maes which is part of the Heineken group, is one of Belgium's oldest surviving breweries. As early as the 1960s, it began marketing its lager under a trade dress using a distinct shade of dark blue.

In 2006, Alken-Maes successfully applied for registration of an abstract Benelux colour mark, claiming protection for the International Pantone Code 2478C in relation to beers.

In 2012, InBev Belgium, part of Anheuser-Bush InBev (the world's largest brewing conglomerate), redesigned its low-alcohol beer, changing from JUPILER BLUE to BLUE BY JUPILER under the following trade dress:

Alken-Maes sought injunctive relief, relying on, among other things, the infringement of its colour mark which it claimed was well known in part of Benelux. Surveys had shown that over 60 per cent of Belgian consumers attribute the distinct shade of dark blue to beer—in particular, to Alken-Maes. Alken-Maes' claim was based on Article 2.20.1(a) and 2.20.1(c) BCIP (corresponding to Article 5.1(a) and 5.2 TMD).

Analysis

The court accepted the validity of the colour mark and upheld the infringement, at least insofar as it was based on the enlarged protection conferred to well-known marks.

First, the court considered whether the colour used by InBev for its beer constituted a sign in relation to that product or, by contrast, a simple property of things or decoration. That assessment, which is a question of fact, depends on the context in which the colour is used as well as the perception of the average consumer of those goods (Case C-104/01 Libertel, para 27). According to the court, the use by InBev Belgium of the colour blue for its beer packaging was done ‘as a trade mark’—that is, with the intention to distinguish the origin of the product. That finding was apparent from the predominant appearance of the blue colour on the cans and bottles, and was not called into question by the presence of verbal elements on the packaging. On the contrary, due to its obvious meaning, the verbal element ‘BLUE’ even strengthened the conclusion the colour was used a distinctive sign.

While there was no discussion of the fact that the sign was used in the course of trade for goods identical to the those for which the mark was registered, it was equally apparent to the court that the colour mark is well known, which was evidenced by its long-lasting and heavy use on the Belgian market, as well as by the associated investments for advertising emphasizing the use of that colour. The recognition that the mark enjoyed among 60 per cent of Belgian consumers was largely sufficient for the mark to be considered as enjoying a reputation in Benelux.

When comparing the mark with the sign, the court, however, refused to accept that both were identical in the perception of the average consumer. Even if that consumer was not likely to display a higher degree of attention in relation to these kinds of fast-moving consumer goods, the difference between the mark and sign, the latter found to be characterized by a gradation of dark and light blue, were not so insignificant that they would go unnoticed (Case C-291/00 LTJ Diffusion [2003] ECR I-02799, para 53). Although not identical, a high degree of similarity between the mark and the sign was undeniable, to the extent that the average consumer of beers, who rarely makes a direct comparison between the products, would be likely to establish a link between the two. The finding that consumers would recall the mark when seeing InBev Belgium's packaging was not called into question by the addition of the well-known mark JUPILER and the bull logo, because these marks were less prominent and visible, especially when seen on the shelves from a certain distance. Because of that, the court also noted that the colour blue retained an independent distinctive role within the compound sign, constituted by the packaging, and could therefore be challenged as such.

As to the different types of injury referred to in Article 5.2 TMD, the court surprisingly did not look into the unfair advantage taken from the repute of the mark, but held that InBev Belgium's trademark use of a highly similar colour was likely to cause detriment to the distinctive character of the colour mark (Case C-323/09 Interflora [2011] ECR I-08625, para 79). That, according to the court, was sufficiently clear from the counter-claim seeking to annul the colour mark for lack of distinctive character by relying on examples of other beers using a shade of blue.

Finally, InBev Belgium could not rely on any due cause for the infringing use. The alleged prior use of the colour blue which it claimed was deemed to be irrelevant by the court because the shade of blue used for the previous packaging—before its rebranding—was different and was also used in a less distinctive way.

Practical significance

Colours are widely used on packaging and send a powerful, attention-grabbing signal that it is often processed more rapidly by the human brain than verbal or figurative signs, especially when perceived at a distance. A single colour or colour combination can thus fulfil the function of a trade mark: to guarantee the origin of goods or services to consumers or end users by enabling them unambiguously to distinguish particular goods or services from others.

Belgian case law demonstrates that, once registered, a colour mark is a powerful tool. Infringements are often easily demonstrated and accepted by the court on the grounds that a colour mark which has acquired distinctiveness through use tends to be regarded as having acquired a reputation. The factors to consider in examining whether a mark is well known are identical to those for the process of familiarizing the relevant public. Marks that are well known because of the use made of them enjoy a broader scope of protection and may be relied on to prevent third parties from using similar or identical colours, even if that is done in combination with other (sometimes well-known) marks.

This colour mark ruling is the latest in a series of decisions in which Belgian courts have ruled in favour of the trade mark owner. Earlier cases included the blue-silver colour mark of Red Bull (Pres Commercial Court of Brussels, 8 June 2011, A/10/06233), the heavenly blue colour mark of Rizla (Court of Appeal of Brussels, 21 March 2011, 2008/AR/2318) and the orange colour mark of Veuve Clicquot (Pres Commercial Court of Brussels, 4 November 2011, A/11/04774).

Third-party liability for information claims in trade mark infringement cases

Author: Anthonia Ghalamkarizadeh (Hogan Lovells)

Davidoff Hot Water”, Bundesgerichtshof (German Federal Supreme Court), I ZR 51/12, 17 October 2013

Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt228, first published online: December 23, 2013

The German Federal Supreme Court referred questions to the Court of Justice of the European Union (CJEU) regarding the scope of information claims a trade mark owner can invoke against third parties in cases of alleged trade mark infringement.

Legal context

Directive 2004/48 on the enforcement of intellectual property rights (‘the Enforcement Directive’) provides in Article 8(1) that Member States in their national legislation shall ensure that right owners can enforce information claims not only against the alleged infringer but also against certain third parties with commercial connections to the infringement. This includes persons who were found to have provided on a commercial scale services used in the infringing activities. In Germany, the corresponding right to request information from third parties has been implemented by Article 19(2)(1) No 3 of the German Trade Mark Act (MarkenG).

Article 8(3) of the Enforcement Directive regulates the relationship between the provisions of the Enforcement Directive and other statutory provisions dealing with information claims. Paragraph 3(e) provides that the entitlements under Article 8 ‘shall apply without prejudice to other statutory provisions which govern the protection of confidentiality of information sources or the processing of personal data’. Paragraph 383 of the German Court of Civil Procedure (ZPO) is such a statutory provision. It allows witnesses to refuse testimony for various reasons of a personal or professional nature. Witnesses such as medics, lawyers and bankers may rely on this exemption if, in exercising their profession, they have been entrusted with information that is confidential by nature or by law.

The German Federal Supreme Court had to decide on the order of precedence among the right to information and the right to refuse testimony for professional reasons.

Facts

The claimant had purchased a fragrance called ‘Davidoff Hot Water’ on the online marketplace eBay, transferring the purchase price to an account at a local savings bank. After discovering that the product was a counterfeit, the claimant tried to unveil the identity of the seller. Having exhausted other sources of information, the claimant brought an information claim against the savings bank, seeking to obtain the personal data of the account holder. The court at first instance granted the information order, but at second instance the action was dismissed. The claimant appealed on points of law to the German Federal Supreme Court.

Analysis

The German Supreme Court considered the sale of the product ‘Davidoff Hot Water’ to constitute an obvious case of trade mark infringement. Under the German rules on third-party liability for information claims, Article 19(2)(1) No 3 MarkenG, the savings bank would generally be liable for revealing the requested personal information about its customer. It had provided a commercial service to the alleged infringer which had been used in the course of the infringing acts. Against this obligation, the defendant savings bank invoked its right to refuse testimony under para 383 ZPO, relying on its confidentiality obligations in banking matters. The German rules on information claims against third parties in trade mark infringement cases are based on the Enforcement Directive and accordingly must be interpreted in the light of European Community law. The German Supreme Court therefore referred the question to the Court of Justice of the European Union (CJEU) whether in the present conflict the interests of the trade mark owner override the confidentiality obligations of the defendant savings bank—which is the preliminary view of the German court.

Practical significance

The CJEU's decision will further define the scope of trade mark owners' rights vis-à-vis third parties which are not otherwise responsible for the trade mark infringement. Should the CJEU concur with the German court that the interests of trade mark owners prevail over banking secrecy, this may be the starting point of further debate. Would other persons who, under the national rules of Member States, are exempt from testifying, such as doctors or lawyers, also be obliged to disclose confidential information? It will be difficult to draw clear boundaries in this intersection of competing interests. The likely outcome is a flexible approach, allowing for an individual balancing of rights and interests in each individual case of infringement and leaving it to national courts to shape the case law.

Gold Bear Wars

Author: Birgit Clark (Baker & McKenzie LLP)

Regional Court of Cologne (Landgericht Köln), 33O 803/11, 18 December 2012

Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt072, first published online: May 31, 2013

Upholding a claim brought by confectionery manufacturer Haribo, the Regional Court of Cologne decided that competitor Lindt's three-dimensional gold-foiled chocolate bears amounted to an infringing ‘visual representation’ of Haribo's well-known GOLDBÄREN gummy bear word marks.

Legal context

In accordance with Article 5(1) of the European Union's Trade Mark Directive, Article 14(2) No 3 of the German Trade Mark Act (MarkenG) provides that it constitutes trade mark infringement ‘if a third party without having consent of the trade mark owner in the course of trade exploits the distinctive character or the repute of a well-known trade mark in relation to goods or services which are not similar to those for which the trade mark is registered without due cause and by such use takes unfair advantage of the distinctive character or the repute of the trade mark’.

Facts

German confectioners Haribo had sold its multi-coloured gummy bears wrapped in gold-coloured packaging since the 1960s and owned various registered trade mark rights relating to them including, inter alia, GOLDBÄR (in English: gold bear) and its plural form GOLDBÄREN as well as its ‘Goldbär device’: a yellow-gold coloured bear device wearing a red ribbon bow covering confectionery. Haribo's competitor, Swiss confectioner Lindt, who produces the well-known chocolate Gold Bunnies, has made and sold gold-foil wrapped chocolate bears (called Lindt Teddy and wearing a red ribbon bow) since 2011. Haribo took objection and brought a claim against the distribution of Lindt's chocolate bears in Germany based on its trade mark rights. In addition, Haribo asked for information, damages and the destruction of Lindt's products. Lindt saw things differently and contended that the gold foil and red ribbon used on its chocolate Lindt Teddies were the same as those used on its well-known Easter chocolate Gold Bunnies. Lindt explained that it had intentionally refrained from using brand names such as ‘Goldbär’ or ‘Gold Teddy’ and that gold was a traditional Christmas colour. The Swiss chocolate maker thus invited the court to find that the competing products did not look in any way similar so that consumers would not be confused.

Analysis

The court agreed with Haribo. While Haribo based its infringement claim on a likelihood of confusion (Article 14(2) No 2 MarkenG), dilution (Article 14(2) No 3 MarkenG) as well as unfair competition law, the court chose to focus solely on trade mark dilution.

The court confirmed that Haribo's trade mark registration for GOLDBÄREN amounted to a well-known mark in the sense of Article 14(2) No 3 MarkenG insofar as it covered fruit gum, being known to over 90 per cent of the relevant German consumers as evidenced by a market survey Haribo submitted in support of its claim. While it acknowledged that Lindt did not use the word sign GOLDBÄREN for its products, the court nonetheless found that Lindt's Teddies amounted to a ‘visual representation’ of and were thus of a ‘high similarity’ to Haribo's trade marks. The court explained that the sight of the shape of Lindt's three-dimensional chocolate bears inevitably produced connotations with Haribo's bears as being protected by its various trade mark registrations.

The court further agreed with Haribo that consumers were likely to refer to Lindt's bears as ‘Goldbären’ due to their visual appearance which could in turn result in a dilution of Haribo's trade mark rights under Article 14(2) No 3. MarkenG Lindt had claimed that its bear had been named the Lindt Teddy as an intentional variation of its well-known gold foil wrapped bunny. In this respect, the court took the view that the majority of consumers would not use terms such as ‘gold bear figure’, ‘bear wrapped in gold foil’ or ‘gold-coloured chocolate teddy bear’ but would pick the closest and most obvious term when describing Lindt's bears, which was ‘Goldbär’. While ‘Goldbär’ was not a term that could be found in a dictionary, it was nonetheless the most obvious term to describe Lindt's bears, not least due to the fame of Haribo's trade mark.

Noting the significance of the legal issues raised, the court allowed an appeal to the Higher Regional Court of Cologne, explaining that this was a special case since there had so far been no decision by the German Federal Court of Justice (Bundesgerichtshof) on the question of a conflict between a word mark and a three-dimensional product design. The Cologne court did, however, stress that there could be a similarity between different ‘categories of trade marks’ and applied legal principles which the Bundesgerichtshof had previously developed in precedents concerning a conflict between word marks and figurative trade marks (BGH GRUR 1971, 251, 252—Oldtimer; BGH GRUR 2004, 779, 783 Zwilling/Zweibrüder). The judges pointed out that the Bundesgerichtshof had held that there could be similarity where there was not only a ‘concordance in theme’ but where a term was the ‘obvious, unforced and exhaustive description’ adopted by consumers. To avoid a general protection of a mere theme (‘kein allgemeiner Motivschutz’) the threshold for trade mark infringement had to be set high and be restricted to signs that had a ‘particularly memorable and distinctive’ meaning. In cases of three-dimensional marks this would only apply in rare cases, the Cologne judges concluded. In this context the judges also agreed with Haribo that Lindt's gold-coloured packaging could lead consumers to make a mental connection since Haribo's packaging also featured a gold bear wearing a red ribbon.

Lindt's use of its Teddy was also use of the GOLDBÄREN trade mark insofar as it was used as an indicator of trade origin. The court pointed out that Lindt itself had argued that the Teddy was meant as a logical extension of the Gold Bunny product line and was thus meant to refer to the defendant's business.

Lindt's three-dimensional shape and packaging of its Teddy was also ‘unfair’ in the sense of Article 14(2) No 3 MarkenG since there was a serious and real danger that it could dilute the distinctive character of Haribo's mark. Not only would the strength of Haribo's mark as an indicator of origin be reduced, but there was a genuine risk that the mark GOLDBÄREN could become a generic term. The court did not accept the argument that the term GOLDBÄREN was purely descriptive for chocolate products and that their chocolate bears were high priced premium chocolate, whereas Haribo sold ‘low priced sweet nibbles in plastic bags’. Conceding that there may be other gold foil-wrapped chocolate bears available on the German market the judges nonetheless considered that consumers would not automatically describe these as ‘Goldbär’. Further, the relevant market could not be compartmentalized into a market for fruit gums and a market for chocolate since that there was a homogenous market for sweets. Indeed, both the defendant's and the claimant's products were sold in close proximity in supermarket shelves.

The imprint ‘A Teddy’ on some of Lindt's bear did not remove the serious and real danger of a dilution of Haribo's trade mark. Even if an observant consumer would notice the imprint, this would not remove the risk of an association of both marks in the mind of consumer, who could be led to believe that there were contractual connections between defendant and claimant or that Lindt's Teddy was a co-operation of two different manufacturers of confectionery, in particular since Haribo had recently introduced fruit gum products that were a cooperation with another chocolate maker. Accordingly, in light of the (potential) damage to Haribo's trade mark rights it was proportionate for Lindt to pay damages, recall and destroy all products as demanded by Haribo.

Practical significance

The question of conceptual similarity is not always straightforward, as this case illustrates. While it has long been acknowledged that word and figurative marks can be similar, the question of similarity between a word mark and a three-dimensional shape mark appears to arise less frequently. In order to maintain legal certainty for trade mark owners and their competitors alike, it seems crucial that there is a high threshold—as rightly demanded by the Cologne court—and clear guidance as to when similarity may arise.

It is not easy to determine whether the guidance developed by the Bundesgerichtshof for conflicts between word and device marks (similarity, where the later mark is an ‘obvious, unforced and exhaustive description’ of the earlier mark) should equally be applied to all conflicts between word marks and three-dimensional shapes or whether it should be limited to cases where the earlier mark is well-known—as it was the case here with Haribo's mark. Bearing in mind the impact this point may have on search strategies and advice when it comes to clearing any category of (shape) trade mark—and potentially also designs—for use and registration in Germany, it is good news that Lindt has already announced that it will appeal the decision. It thus appears safe to predict that it may only be a question of time until we have a Bundesgerichtshof decision on this issue.

Amazon's use of term ‘appstore’ is not deceptive

Author: Eleonora Rosati (University of Cambridge)

Apple Inc v Amazon.com Inc, US District Court for the Northern District of California, No C 11-1327 PJH (N D Cal, 2 January 2013)

Journal of Intellectual Property Law & Practice (2013) doi: 10.1093/jiplp/jpt075, first published online: May 24, 2013

Abstract

With its order on 2 January 2013, a US District Court rejected Apple's claim that Amazon's use of term ‘appstore’ in relation to its sale of applications (‘apps’) for Android devices and the Kindle Fire (Amazon's tablet computer) was false advertising.

Legal context

Following Amazon's initiative to set up its own mobile software download service called ‘Amazon Appstore’, in 2011 Apple filed a lawsuit claiming, among other things, that Amazon's use of the term ‘appstore’ amounted to trade mark infringement, false designation of origin, false description and false advertising under s 43(a) of the Lanham Act, as well as dilution under s 43(c) of the same Act. The order rendered at the beginning of 2013 concerned Amazon's request for partial summary judgment in relation to the cause of action for false advertising.

Facts

Apple had since 2008 used its App Store to market apps for its mobile devices. In the same year, Apple applied to register the App Store mark with the US Patent and Trademark Office (USPTO). Microsoft opposed the registration, asserting that this mark could not be registered because of its generic character. At the end of 2011, the USPTO's Trademark Trial and Appeal Board suspended the opposition proceedings pending the outcome of the lawsuit initiated by Apple against Amazon earlier that year, following three unsuccessful requests that Amazon cease to use the App Store mark in relation to its mobile software download service.

At the end of October 2012, Amazon filed a motion for partial summary judgment, asking the court to decide whether it had made a false statement of fact in a commercial advertisement about its own or another's product. Apple had argued that, by using the word ‘appstore’, Amazon implied that its store was affiliated with or sponsored by Apple. By doing so, not only would have the goodwill associated with Apple been lessened, but also a substantial segment of consumers were or could have been deceived into believing that Amazon Appstore was similar to Apple App Store. As a result of this deception, consumers could have altered their own purchasing decisions, with revenues being unduly diverted from Apple to Amazon.

Analysis

As mentioned by the court, an action for false advertising under s 43(a) of the Lanham Act has five elements: (1) a false statement of fact by the defendant in a commercial advertisement about its own or another's product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant caused the false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a lessening of the goodwill associated with its products.

What was disputed in this case was solely the first element of the action, that is, whether Amazon had made a false statement of fact in a commercial advertisement about its own or another's product.

Judge Hamilton found that Apple had produced no evidence to support the proposition that Amazon had made a false statement about the nature, qualities or characteristics of Amazon Appstore. In particular, the mere use of the term ‘appstore’ by Amazon to designate a site for viewing and downloading or purchasing apps could not be intended as a representation that the nature, characteristics or qualities of Amazon Appstore were the same as that of Apple App Store. In particular, Apple had failed to demonstrate that consumers either understood the term ‘appstore’ as including specific qualities or characteristics or attributes of Apple App Store, or were misled by Amazon's use of this term.

Practical significance

Although the court has yet to decide whether Amazon infringed Apple's trade mark, the order that dismissed the claim for false advertising is likely to have impaired Apple's chances of success in this respect.

Moreover, should the court decide in favour of Amazon, it might become difficult for the USPTO to reject Microsoft's opposition asserting the generic character of the term ‘appstore’. This could have effects also in Europe, and indeed influence the outcome of the cancellation requests that Amazon, Nokia and Microsoft filed independently with the Office of Harmonisation for the Internal Market in 2011, seeking the cancellation for invalidity of Community trade mark No 005 554 779 ‘APPSTORE’, which Apple registered in 2009 in Classes 35 and 42 of the Nice Agreement.

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.

New Balance wins shoe battle with Bestseller: a lesson in enforcement

Author: Hanne Weywardt (MAQS Law Firm, Copenhagen)

New Balance v Bestseller, Danish Supreme Court, 30 May 2012

Journal of Intellectual Property Law & Practice (2012), doi: 10.1093/jiplp/jps135, first published online: 17 September 2012

The Danish Supreme Court affirmed the ruling of the court of first instance, awarding New Balance DKK 2.5 million in damages and around DKK 500,000 in case costs for unfair competition and trade mark infringement.

Facts

The Bestseller products, ‘JJ Slick’ and ‘JJ Stan’, were found to be close imitations of the New Balance product line under the brand PF FLYERS, these being the models ‘SGrounder Hi’ and ‘Number 5’, each of which came in several styles. Bestseller had sold 7,000 pairs of ‘JJ Slick’ and 12,800 pairs of ‘JJ Stan’, these sales being spread across most of the countries in Europe. One model, ‘JJ Slick’, was purchased by Bestseller from a Chinese supplier, whereas ‘JJ Stan’ was designed by an in-house designer with Bestseller.

Images of the products in question:

NEW BALANCE / PF FLYERS

BESTSELLER JJ SLICK

NEW BALANCE/PF PFLYERS – BESTSELLER JJ STAN

NEW BALANCE/PF PFLYERS – BESTSELLER JJ STAN

Additionally, Bestseller had distributed 290,000 copies of an advertisement magazine in connection with their marketing of its products in which there was a picture of a sticker art wall depicting New Balance's trade mark PF FLYERS. This was found to constitute a trade mark infringement, despite the argument from Bestseller that a picture of a sticker art wall which was not prepared or manipulated by Bestseller was not used in direct correlation with the shoe products in question and did not constitute trade mark use.

Analysis

The Supreme Court decision is of principal importance. If you look back at case law in recent years within this field, it would be difficult to predict the outcome of Supreme Court rulings when it comes to the question of infringement. However, this Supreme Court ruling clearly states that you have to be very careful in not making a business out of other companies' creations and creativity or riding on another's marketing efforts.

Practical significance

The case is a good example of highly effective enforcement in order to stop an infringement. Bestseller's products were put on the market in late September 2006. New Balance took action by filing a request for a combined procedure with the bailiff's court for preservation of evidence and injunctive relief. The goods were off the market by mid-December, still rendering New Balance a substantial amount in compensation. From a Danish perspective, the amount of compensation is historically high. This can be seen as a result of the implementation of the EU Enforcement Directive (2004/48) by which the law in Denmark was changed with effect from 1 January 2006. When calculating the amount of damages to the right holder, the court should now take into consideration among other things the unfair profit of the infringer.

Bestseller had made an unfair profit of DKK 1.7 million and with the recent ruling awarding New Balance a considerably higher amount, the ruling confirms that it is not worthwhile violating the rights of other businesses.

Court clips Red Bull's wings

Authors: Joel Smith, Rachel Montagnon, Anna Gibson (Herbert Smith)

Frisdranken Industrie Winters BV v Red Bull GmbH Case C–119/10, Court of Justice of the European Union, 15 December 2011

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps033, first published online: March 14, 2012

The Court of Justice of the European Union (ECJ) has held that a supply chain partner (SCP) who, under an order from a third party, merely executes a technical part of the production process, such as the filling of branded cans or containers, without having any interest in the external presentation or branding of the product, does not itself make ‘use’ of the sign as prohibited under Article 5 of the Trade Marks Directive (89/104).

Legal context

In late 2006, Red Bull sought an injunction against Winters in the Netherlands claiming that the service it provided infringed the world renowned RED BULL trade mark. At first instance, an injunction was granted against Winters by the District Court on the basis that the filling of cans bearing the BULLFIGHTER sign infringed Red Bull's trade mark rights. Red Bull and Winters appealed and cross appealed this decision to the Regional Court of Appeal, which upheld the decision but extended the injunction to both the PITBULL and LIVE WIRE marks, relying on the provisions of the Benelux Convention on Intellectual Property (Trade Marks and Designs) which corresponds to Article 5(1)(b) and (2) of the Directive.

Following a further appeal by Winters, the Netherlands Supreme Court decided to stay the proceedings and to refer various questions to the ECJ, namely whether the mere filling of packaging bearing potentially infringing trade marks constituted trade mark infringement under Article 5 of the Directive.

Facts

Red Bull produced and marketed an energizing drink under the world famous trade mark RED BULL. It obtained numerous international registrations for that trade mark, valid, inter alia, in the Benelux countries. Winters, a Dutch Company, was an undertaking which was mainly involved with the filling of cans with drinks produced by itself or by others. Smart Drinks Limited, a legal person under the law of the British Virgin Islands, was a competitor of Red Bull.

Winters filled cans on the instructions of Smart Drinks, who supplied Winters with empty cans all bearing various signs, decorations, and texts, including the signs BULLFIGHTER, PIT BULL, RED HORN, LONG HORN, and LIVE WIRE. Winters placed the filled cans at the disposal of Smart Drinks, which then exported them to countries outside the Benelux. Winters only performed filling services for Smart Drinks and did not send the filled cans to that company; nor did Winters deliver or sell the cans to third parties.

Analysis

In considering the questions referred, the ECJ considered that although it was clear that an SCP such as Winters operates in the course of trade when it fills cans under an order from another party, it does not follow, however, that the SCP itself ‘uses’ the signs displayed on the cans as prohibited under Article 5 of the Directive. In particular, the Court held that an SCP which merely fills, under an order from and on the instructions of another party, cans already bearing signs similar to trade marks and therefore merely executes a technical part of the production process of the final product without having any interest in the external presentation of those cans and the signs, does not itself ‘use’ those signs within the meaning of Article 5. Moreover, the Court noted that an SCP in Winters’ situation does not, on any view, use those signs ‘for goods or services’ which are identical with, or similar to, those for which the RED BULL trade mark was registered. In this regard, the Court noted that the service provided by Winters consisted of the filling of cans and that this service does not have any similarity with the product for which Red Bull's trade marks were registered.

The Court acknowledged that it had previously held (in UDV North America [2009] ECR I-1279; Google France and Google [2010] ECR I-2417; and L'Oreal and Others [2011] ECR I-0000), with regard to online service providers, that an ISP may infringe where it uses a sign corresponding to the trade mark of another person in order to promote goods which one of its customers is marketing with the assistance of that service, where that use is carried out in such a way as to establish a link between the sign and service. However, the filling of cans bearing signs similar to the trade marks is not, by its very nature, comparable to a service aimed at promoting the marketing of goods bearing those signs and does not imply, inter alia, the creation of a link between the signs and filling service. Rather, the business which carries out the filling is not apparent to the consumer, who would not make a connection between its services and those signs.

In addition, and contrary to concerns raised by both Red Bull and the European Commission, the ECJ dismissed the idea that its decision would permit the customer of an SCP to circumvent the protection offered to the proprietor under the Trade Marks Directive by dividing the production process and awarding different elements of the process to different SCPs to escape liability, as those services may still be attributed to the customer who could remain liable under the Directive.

A Dutch decision in August 2011 (Heineken NV v Olm Brouwerijen NV) may, however, strike a word of warning to SCPs as the Court in this case found an alternative way to hold a third party liable for the filling of branded containers. Heineken brought a claim of trade mark infringement against a small Dutch brewer, Olm, for the filling of Heineken casks (bearing the HEINEKEN mark) with Olm beer and the sale of such casks to wholesalers and independent retailers. Whilst, as might be expected, the sale of Heineken casks by Olm was held to infringe Heineken's trade mark, the filling of Heineken's casks did not. Instead Olm was found liable under the doctrine of ‘profiteran van wanprestatie’—benefiting as a third party from a breach of contract.

Practical significance

This decision is of relevance to the consumer and retail sectors, particularly food and drink brands, as SCPs which provide technical services to brand owners involving the use of trade marks, such as the filling of cans or containers, will not be liable for infringement under the Directive, if such use is not promotional use to end consumers. However, the finding that a trade mark proprietor cannot act against an SCP under the Directive does not allow the customer of such an SCP to circumvent the protection offered to the proprietor under the Directive (by dividing the production process between different SCPs) as those services may still be attributed to the customer who will remain liable.

Further, in light of the Dutch Heineken decision, trade mark owners may want to consider contractual arrangements to look for an angle to pursue SCPs which supply infringing third parties with services in the future, although trade mark rights will still be enforceable against the customers of those SCPs, which should ensure that infringing goods can be prevented from reaching the market.