Trade Marks: 34Red v WHG Appeal

In 32Red Plc v WHG (International) Ltd and Others [2012] EWCA Civ 19 (24 Jan 2012) the Court of Appeal allowed a cross appeal by the claimant, 32Red Ltd. ("Red") against Mr. Justice Henderson's finding at first instance [2011] EWHC 62 (Ch) (21 Jan 2011) [2011] ETMR 21that Red's number mark had not been infringed but dismissed the appeal by the defendants, the William Hill group of companies ("WHG"), against his finding that all of Red's marks were valid and all but one of them had been infringed. The facts of this case are complex but I set out the background and summarized the legal issues in my post Trade Marks: 32Red v WHG of 23 Jan 2011.

The Grounds of Appeal
Lord Justice Etherton described WHG's attack on the trial judge's judgment as "a full-scale, wide-ranging attack on the Judge's analysis and conclusions on virtually every aspect of his judgment" alleging not just errors of principle but also failure by the judge to apply correctly principles that Red believed that he did get right to the facts and perversity of his findings of fact.

Their counsel argued that the trial judge had

1. wrongly concluded that the number mark does not fall within s.3 (1) (b) and (c) of the Trade Marks Act 1994, and, in reaching that conclusion, he had both made errors of principle, particularly in relation to s.3 (1) (c), and had failed properly to take into account the factual evidence, particularly the oral evidence of one of the witnesses for the respondent;
2. wrongly  rejected WHG's attack on the registration of the number mark as having been made in bad faith and that his decision on the point was so inconsistent with the evidence as to be perverse;
3. approached  issue of infringement in the wrong way in that he had de-constructed the Red32 mark into different elements (32 and the colour red) and failed to take sufficient account of the evidence (or rather lack of it) about actual confusion; and that he had
4. erred in finding that Red's Community trade marks were properly registered as they were devoid of distinctive character.

The Judgment

The judgment of the Court was delivered by Lord Justice Etherton but Lord Justice Kitchin and Lord Justice  Toulson agreed.

Starting with the validity of the national and Community registrations the Court considered the decisions of the Court of Justice of the European Union in C-363/99 Koninklijke KPN Nederland v  Benelux-Merkenbureau (Postkantoor)  [2004] ECR I-1619, [2006] Ch 1, [2005] 2 CMLR 10, [2005] CEC 216, [2005] All ER (EC) 19, [2005] 3 WLR 649, [2004] ETMR 57 and C-51/10P Ajencja Wydawnicza Technopol sp. z.o.o. v OHIM ("Technopol")  [2011] ETMIR 21. Lord Justice Etherton concluded  at paragraph [64] that Mr. Justice Henderson's approach to determining validity was entirely consistent with those cases. The trial judge had been right to find that the number 32 was not descriptive of gambling simply because it was widely regarded as a lucky number.

As to the attack on the trial judge's finding on infringement, the Court affirmed the judge's approach which had been based on Mr. Justice Arnold's analysis at para [73] of his judgment in Och-Ziff Management Europe Ltd and another v Och Capital LLP and another [2010] EWHC 2599 (Ch) (20 Oct 2010) [2011] FSR 11, [2010] EWHC 2599 (Ch), [2011] ECC 5, [2011] ETMR 1. The Lord Justices rejected WHG's attack on the judge's application of those principles to the facts that he found.

The only point upon which the Lord Justices disagreed with the trial judge was his finding that there had been no infringement of the number mark.   He seems to have reached that conclusion on the ground that the mark had not yet acquired a separate reputation.   Unsurprisingly, their lordships found that it was unnecessary to prove reputation to bring an action  for infringement under s.10 (2). Accordingly, Red's cross appeal succeeded.

Conclusion

I have to say that I was surprised to learn that there was an appeal because the case had been decided largely on its facts.   WHG lodged a 44 page "skeleton" consisting of 174 paragraphs which revisited the oral and documentary evidence in amazing detail.   Appellate courts are slow to interfere with a lower court's finding of fact because they do not see the witnesses and are for that reason in no position to assess the credibility of their testimony. 

Further Information

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