Trade Marks: Lifestyle Equities v Royal County of Berkshire Polo Club
Court of Appeal (Lords Justices Baker, Arnold and Nugee) Lifestyle Equities CV and others v Royal County of Berkshire Polo Club Ltd and others [2024] EWCA Civ 814 (22 July 2024)
This was the claimants' appeal against Mr Justice Mellor's order in Lifestyle Equities CV and Anotherr v Royal County of Berkshire Polo Club Ltd and others (Rev1) [2023] EWHC 1839 (Ch) (19 July 2023). By that judgment, Mr Justice Mellor dismissed the claimants' claim for trade mark infringement and passing off. The appeal came on before Lords Justices Baker, Arnold and Nugee on 9 July 2024. The hearing was filmed and may be viewed on the Court of Appeal's YouTube channel (morning and afternoon). At the end of the oral proceedings, the Court of Appeal said that it would dismiss the appeal. Lord Justice Arnold with the agreement of Lords Justices Baker and Nugee delivered their reasons in Lifestyle Equities CV and others v Royal County of Berkshire Polo Club Ltd and others [2024] EWCA Civ 814 on 22 July 2024.
The Marks
The following sign is registered as a trade mark in the United Kingdom, the European Union, Chile, Mexico, Panama, and the United Arab Emirates:
The first claimant, Lifestyle Equities CV, was the registered proprietor of those registrations and the second claimant, Lifestyle Licensing BV, was the first claimant's exclusive licensee. The sign had been registered as a trade mark in Peru but that registration was revoked in 2016. Following that revocation, all rights in the trade mark in Peru were transferred to BHPC USA LLC, the third claimant.
The Claim
The claimants alleged that the Royal County of Berkshire Polo Club ("the Berkshire"), one of the leading polo clubs of the United Kingdom, the personal representative of the founder of that club, the son of the founder and his widow who is now the chair of the club. the Berkshire's former licensing manager and its sole director had infringed their trade marks by using the following sign in relation to footwear, fragrances, luggage and watches in the UK and other countries in which the claimants' mark had been registered as of 25 June 2018:
The Agreement
The parties agreed that the claim for infringement in the EU, Chile, Mexico, Panama, Peru and the United Arab Emirates should be determined in accordance with English and EU law. The relevant provisions were s.10 (2) of the Trade Marks Act 1994 and art 9 (2) (b) of Regulation 2017/1001/EU of 14 June 2017 on the European Union trade mark.
Assessing Likelihood of Confusion
In para [11] of his judgment, Lord Justice Arnold said that the manner in which the requirement of a likelihood of confusion is assessed for the purposes of s.10 (2) and art 9 (2) (b) had been considered by the Court of Justice of the European Union in a large number of decisions which he summarized as follows:
"(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense; and
(k) if the association between the marks creates a risk that the public might believe that the respective goods or services come from the same or economically-linked undertakings, there is a likelihood of confusion."
In the next paragraph, his lordship referred to the following words of Lord Justice Kitchin (as he then was) at para [87] of his judgment in Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ 24, [2012] FSR 19:
"In my judgment the general position is now clear. In assessing the likelihood of confusion arising from the use of a sign the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer's mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its context."
Mr Justice Mellor's Judgment
"(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense; and
(k) if the association between the marks creates a risk that the public might believe that the respective goods or services come from the same or economically-linked undertakings, there is a likelihood of confusion."
In the next paragraph, his lordship referred to the following words of Lord Justice Kitchin (as he then was) at para [87] of his judgment in Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ 24, [2012] FSR 19:
"In my judgment the general position is now clear. In assessing the likelihood of confusion arising from the use of a sign the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer's mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its context."
Mr Justice Mellor's Judgment
After introducing the issues, assessing the witnesses and setting out the applicable law, the trial judge addressed the issues that arose on appeal. The first was the relevance of what he termed "a crowded market" by which he meant the existence of other polo-themed clothing brands featuring horse-and-rider logos such as "Polo" by Ralph Lauren and the United States Polo Association. The judge held that if the existence of such a crowded market could established, the claimants' trade marks had a lesser degree of distinctive character than would otherwise have been the case. That in turn would mean that there was less scope for there to be a likelihood of confusion than would otherwise have been the case. The second issue was the relevance of coexistence agreements between trade mark owners in the relevant markets. Examples included agreements between Ralph Lauren and the claimants and between Ralph Lauren and the Berkshire. The third topic was the relevance of other polo-themed brands. The fourth was whether the words "POLO CLUB" and the polo player logo were distinctive.
His lordship considered the evidence of confusion between the parties' respective brands between [220] and [253] and concluded:
"[252] Having considered these categories separately, I must step back and consider them collectively. Having done so, I was struck by how insubstantial this evidence was, bearing in mind the fact that these two brands had traded in the same market (in Panama in particular) for many years, possibly as much as 10 years (2011-2021). Even if the period was only 7 years (say 2011-2018), I would still have expected much more evidence of confusion to have come to light, if it had really been occurring. The circumstances in this case are not ones where instances of confusion would not come to the attention of Mr Haddad or Ms Borycz. Evidently, licensees were not shy of making complaints. Furthermore, Mr Haddad and the Cs have been involved in various trade mark disputes for a number of years. Even if the early years were dominated by oppositions and not infringement litigation, the Cs must have understood the value of recording and documenting instances of confusion which came to their attention.
[253] In these circumstances, if there really was confusion occurring between these brands by purchasing consumers, I would have expected a much more substantial body of incidents to have been reported and recorded."
His lordship considered the evidence of confusion between the parties' respective brands between [220] and [253] and concluded:
"[252] Having considered these categories separately, I must step back and consider them collectively. Having done so, I was struck by how insubstantial this evidence was, bearing in mind the fact that these two brands had traded in the same market (in Panama in particular) for many years, possibly as much as 10 years (2011-2021). Even if the period was only 7 years (say 2011-2018), I would still have expected much more evidence of confusion to have come to light, if it had really been occurring. The circumstances in this case are not ones where instances of confusion would not come to the attention of Mr Haddad or Ms Borycz. Evidently, licensees were not shy of making complaints. Furthermore, Mr Haddad and the Cs have been involved in various trade mark disputes for a number of years. Even if the early years were dominated by oppositions and not infringement litigation, the Cs must have understood the value of recording and documenting instances of confusion which came to their attention.
[253] In these circumstances, if there really was confusion occurring between these brands by purchasing consumers, I would have expected a much more substantial body of incidents to have been reported and recorded."
Next, he considered the brand awareness of average consumers:
"[260] In all relevant countries, the goods of both brands have a price premium over unbranded goods. They are not in the prestige sector of the fashion market, but sit in what is sometimes called the mass-tige sector. The relevance is that consumers of these goods are prepared to pay more for the brand, and therefore have a degree of brand awareness. This means that, contrary to the Cs' position in closing, the level of attention is not low but at least medium if not slightly higher.
[261] For the reasons already explained, I find that this brand awareness extends to a general recognition of other 'polo' brand(s) in the same territory. For all territories in issue, this means at least RL Polo. In some territories it includes other 'polo' brands.
[262] In saying this, I recognise that consumers do not have the overview that the evidence in this case presents to me. In any event, I also recognise that the average consumer of the goods in question will not have encountered most of the other 'polo-themed' marks present in the relevant territory. However, even if they have never purchased a RL Polo product, the average consumer for these goods will be aware of that brand and its horse and rider logo at least and is likely, depending on the territory, to have encountered other 'polo-themed' brands as well."
"[260] In all relevant countries, the goods of both brands have a price premium over unbranded goods. They are not in the prestige sector of the fashion market, but sit in what is sometimes called the mass-tige sector. The relevance is that consumers of these goods are prepared to pay more for the brand, and therefore have a degree of brand awareness. This means that, contrary to the Cs' position in closing, the level of attention is not low but at least medium if not slightly higher.
[261] For the reasons already explained, I find that this brand awareness extends to a general recognition of other 'polo' brand(s) in the same territory. For all territories in issue, this means at least RL Polo. In some territories it includes other 'polo' brands.
[262] In saying this, I recognise that consumers do not have the overview that the evidence in this case presents to me. In any event, I also recognise that the average consumer of the goods in question will not have encountered most of the other 'polo-themed' marks present in the relevant territory. However, even if they have never purchased a RL Polo product, the average consumer for these goods will be aware of that brand and its horse and rider logo at least and is likely, depending on the territory, to have encountered other 'polo-themed' brands as well."
Between paras [264] and [275] the judge analysed the similarity between the registered marks and the defendants' signs in the UK. He noted that both the registered mark and the accused sign were composite marks. No particular component dominated in either the mark or the sign. The horse-and-rider motif did not have an independent distinctive role in the mark. He assessed the degree of visual and aural similarity as low to medium. The degree of conceptual similarity was slightly above medium because both the mark and the sign signified a polo club. The visual impression was the most important. The aural impression was the least important. Even bearing imperfect recollection in mind, the words BEVERLY HILLS on the one hand and ROYAL COUNTY OF BERKSKIRE on the other hand had a material effect on the degree of similarity. Lord Justice Arnold noted at para [26] that the trial judge had reached the same conclusion in respect of the other countries between paras [276] and [293] of his judgment.
After considering the circumstances in which goods would be displayed in Panama and other countries in Latin America he concluded that no significant part of the relevant public was likely to be confused. The situation was different in the UK but in all the circumstances of the case Mr Justice Mellor found no likelihood of confusion,
After considering the circumstances in which goods would be displayed in Panama and other countries in Latin America he concluded that no significant part of the relevant public was likely to be confused. The situation was different in the UK but in all the circumstances of the case Mr Justice Mellor found no likelihood of confusion,
Grounds of Appeal
Permission to appeal was granted by Mr Justice Mellor on the following grounds:
Ground 1: The trial judge wrongly relied on matter extrinsic to the trade marks and the signs in making his decisions on infringement in two respects:
(a) The judge wrongly relied on the existence of other polo-themed trade marks. He was wrong to do so in particular because
Ground 1: The trial judge wrongly relied on matter extrinsic to the trade marks and the signs in making his decisions on infringement in two respects:
(a) The judge wrongly relied on the existence of other polo-themed trade marks. He was wrong to do so in particular because
(i) those other brands were not relevant as a matter of law in assessing the distinctiveness of the claimants' trade marks,
(ii) they did not form part of the relevant context in which the allegations of infringement should have been assessed, and
(iii) there was no evidential basis on which to conclude that there was no significant proportion of the relevant public who was unaware of those other polo-themed trade marks.
(b) The judge wrongly relied on the terms of coexistence agreements entered into by the parties with third parties.
(b) The judge wrongly relied on the terms of coexistence agreements entered into by the parties with third parties.
Ground 2: If ground 1 succeeds but is not sufficient to lead to a finding of infringement due to a likelihood of confusion at the point of sale, the judge wrongly rejected the claimants' reliance upon the likelihood of post-sale confusion.
Standard of Review
Whether the Judge was wrong to rely on the Existence of other Polo Themed Trade Marks
Lord Justice Arnold reminded himself that the Court of Justice had said in Case C-251/95 SABEL BV v Puma AG [1997] ECR I-6191 at para [24] that "the more distinctive the earlier mark, the greater will be the likelihood of confusion." He added that the principle had been stated more fully in Case C-39/97 Canon Kabushiki Kaisha v Metro-Goldwyn-Meyer Inc [1998] ECR I-5507 at para [18]:
The principle had been repeated and applied in countless subsequent decisions of the Court of Justice of the European Union and the General Court and was settled law in the EU. It was also part of English law. Lord Justice Arnold referred to para [34 (iv)] of Lord Justice Kitchin's judgment in Comic Enterprises Ltd v Twentieth Century Fox Film Corp [2016] EWCA Civ 41, [2016] FSR 30:
"the issue of a trade mark's distinctiveness is intimately tied to the scope of the protection to which it is entitled".
His lordship noted in para [38] that the parties had agreed that the converse was true. Trade marks with a less distinctive character enjoy narrower protection than those with a highly distinctive character. Although the most common way in which less distinctive trade marks enjoy narrower protection is where a trade mark alludes to the goods and services in question it is not the only way. Another is where the only similarity between the trade mark and the sign is a common element which has low distinctiveness as the Lord Justice had noted in Whyte & Mackay Ltd v Origin Wine UK Ltd [2015] EWHC 1271 (Ch), [2015] FSR 33 at para [44].
The defendants cited Case T-149/06 Castellani SpA v Office for Harmonisation in the Internal Market [2007] EUECJ T-149/6, ECLI:EU: T:2007:350, EU: T:2007:350, [2007] EUECJ T-149/06 as an example of that principle. In Castellanit the opponent to the applicant's application for the registration of CASTELLANI and a device as a mark for alcoholic beverages asserted a likelihood of confusion with its earlier trade mark CASTELLUCA that had been registered for wines except sparkling wine. The General Court found no likelihood of confusion. Its main reason was that the word "castle" and its equivalents in other languages, such as "chateau", "castel" and "castello", were very commonly used as part of trade marks in this field, and therefore the average consumer would pay close attention to the suffixes of the two marks (ANI and UCA), which were visually and aurally sufficiently different to enable the marks to be distinguished. The Court did not suggest that "castle" was descriptive of, or allusive to, alcoholic beverages such as wine.
Mr Justice Mellor had referred to Jack Wills Ltd v House of Fraser Ltd [2014] EWHC 110 (Ch), [2014] FSR 39 as another example. The claimant was the proprietor of registrations of what was called the "Mr Wills Logo" which consisted of a silhouette of a pheasant with a top hat, scarf and cane. The trade mark was registered for clothingThe claimant alleged that the defendant had infringed its mark through use on clothing of a sign called "the Pigeon Logo" consisting of a silhouette of a pigeon in a top hat, bow tie and tailcoat. It was common ground that at least 5 other clothing brands had used bird logos in the UK. Mr Justice Arnold (as he then was) assessed the distinctiveness of the trade marks in para [87] of his judgment:
"Counsel for Jack Wills submitted that the Trade Marks were inherently very distinctive. Counsel for House of Fraser did not suggest that the Trade Marks were devoid of distinctive character. His primary submission was that the Trade Marks and the Pigeon Logo were distinctively different from each other. I shall consider that question below. In the alternative, he submitted that, if the differences between the Trade Marks and the Pigeon Logo did not suffice to enable the average consumer to distinguish between them, then it followed that the Trade Marks were insufficiently different from other bird logos to possess distinctive character. I do not accept this argument. Leaving aside the fact that it ignores the difference between the dates at which the validity of the Trade Marks and the issue of infringement fall to be assessed, the Pigeon Logo is closer to the Trade Marks than the Trade Marks are to any other bird logo of which there is evidence of use in the United Kingdom. Taking account of the other bird logos of which there is evidence of use, I consider that the Trade Marks have a substantial degree of inherent distinctive character. An important factor in the distinctive character of the Trade Marks is their anthropomorphic aspect, and in particular the fact that the bird is equipped with accessories associated with an English gentleman."
Even though the argument addressed in the above passage was an attempted squeeze between validity and infringement, it was relevant that the degree of distinctive character possessed by the trade marks was affected by the closeness of similar trade marks being used by third parties.
Mr Justice Arnold deployed the same reasoning when assessing the likelihood of confusion in para [98]:
"Although I accept that consumers will have become accustomed to distinguishing between different bird logos on clothing, they are not accustomed to distinguishing between logos consisting of silhouettes of anthropomorphic birds wearing top hats and other accessories of an English gentleman."
Mr Justice Arnold deployed the same reasoning when assessing the likelihood of confusion in para [98]:
"Although I accept that consumers will have become accustomed to distinguishing between different bird logos on clothing, they are not accustomed to distinguishing between logos consisting of silhouettes of anthropomorphic birds wearing top hats and other accessories of an English gentleman."
Lord Justice Arnold said that the same point had arisen in Enterprise Holdings Inc v Europcar Group UK Ltd [2015] EWHC 17 (Ch), [2015] FSR 22. In that case, the defendant adduced evidence seeking to show that logos similar to the trade marks in issue were common in the car hire sector. Searches had yielded nearly 4,000 trade marks of which nearly 400 were investigated. Documentary evidence of the use of 20 of those marks was presented. The 5 best examples were set out in the judgment. His lordship found at [94] that the evidence did not show that there was a common use of lowercase 'e' trade marks in the UK vehicle rental sector. Still less did it show that the use of lowercase 'e' logos on a green background was common. In fact, the opposite was true. The judge found in para [183] of his judgment in that case that the trade mark had a fairly high degree of distinctive character but it would have had a lesser degree of distinctive character had lowercase 'e' logos been common in the relevant sector.
The claimants relied on Case C-145/05 Levi Strauss & Co v Casucci SpA [2006] ECR I-3703, [2006] EUECJ C-145/5, [2007] FSR 8, [2006] ETMR 71, [2006] EUECJ C-145/05 in support of their contention that the use of similar signs by other parties was legally irrelevant to the assessment of a registered mark's distinctiveness. The claimants contended that just as use by a defendant of its sign could not be relied upon to support its claim for revocation on the ground that the mark had become the common name in the trade for a product or service for which it was registered, neither could use by third parties of signs similar to the registered mark diminish the distinctiveness of the mark.
Lord Justice Arnold rejected that argument. The issue was not the impact of the defendant's use of its sign on the distinctive character of the trade mark, but the impact of third-party use of other signs. There was no good reason to discount this. On the contrary, experience showed that third-party use of similar signs does tend to diminish the distinctiveness of a trade mark. His lordship concluded that in a crowded market, it is harder for one mark to stand out.
The claimants tried to argue on appeal that some of the other suppliers who had used similar polo-themed logos as trade marks might also have infringed the trade marks. This was the first time that they had raised that argument, They had never sued those suppliers; much less obtained judgment against any of them. They had not advanced the argument at trial. The Court refused to allow them to do so on appeal.
Lord Justice Arnold rejected that argument. The issue was not the impact of the defendant's use of its sign on the distinctive character of the trade mark, but the impact of third-party use of other signs. There was no good reason to discount this. On the contrary, experience showed that third-party use of similar signs does tend to diminish the distinctiveness of a trade mark. His lordship concluded that in a crowded market, it is harder for one mark to stand out.
The claimants tried to argue on appeal that some of the other suppliers who had used similar polo-themed logos as trade marks might also have infringed the trade marks. This was the first time that they had raised that argument, They had never sued those suppliers; much less obtained judgment against any of them. They had not advanced the argument at trial. The Court refused to allow them to do so on appeal.
Relevant Context
The second reason why the claimants argued that Mr Justice Mellor had been wrong to rely on the existence of other polo-themed trade marks is that they did not form part of the relevant context in which the allegations of infringement should have been assessed.
Under the Trade Marks Act 1938, the context in which a sign was used was irrelevant, That is not the case under the 1994 Act as is illustrated by Case C-533/06 O2 Holdings Ltd v Hutchison 3G UK Ltd [2009] Bus LR 339, [2008] CEC 899, [2008] EUECJ C-533/06, [2008] RPC 33, (2009) 32(1) IPD 32001, [2008] 3 CMLR 14, [2008] ETMR 55, [2008] ECR I-4231, [2008] EUECJ C-533/6, The defendant used an image that was similar to the claimant's trade mark in a comparative advertisement for the services for which the mark had been registered. The Court of Justice held that there was no likelihood of confusion because the national court had found that the comparative advertisement was not misleading and did not suggest any commercial link between the parties or their services. The Court of Appeal considered that decision in Specsavers and took account of it when formulating the principle that the use of a sign should be considered in context.
Under the Trade Marks Act 1938, the context in which a sign was used was irrelevant, That is not the case under the 1994 Act as is illustrated by Case C-533/06 O2 Holdings Ltd v Hutchison 3G UK Ltd [2009] Bus LR 339, [2008] CEC 899, [2008] EUECJ C-533/06, [2008] RPC 33, (2009) 32(1) IPD 32001, [2008] 3 CMLR 14, [2008] ETMR 55, [2008] ECR I-4231, [2008] EUECJ C-533/6, The defendant used an image that was similar to the claimant's trade mark in a comparative advertisement for the services for which the mark had been registered. The Court of Justice held that there was no likelihood of confusion because the national court had found that the comparative advertisement was not misleading and did not suggest any commercial link between the parties or their services. The Court of Appeal considered that decision in Specsavers and took account of it when formulating the principle that the use of a sign should be considered in context.
Lord Justice Arnold noted that although the principle in O2 and Specsavers is clear it is not always easy to apply it. Difficulty arises where a party relies on context to negate a likelihood of confusion in a case where the identity or similarity of the mark and the sign and the similarity or identity of the respective goods or services would otherwise give rise to a likelihood of confusion. The trial judge had referred to Daniel Alexander QC''s discussion of the issue in PlanetArt LLC v Photobox Ltd [2020] EWHC 713 (Ch), [2020] ETMR 35, [2020] WLR(D) 266, [2020] Bus LR 2048, [2020] FSR 26 and Lord Justice Arnold discussed the issue further in paras [56] and [57]. Mr Justice Mellor said at [67] of his judgment that "[t]here are sound policy reasons for not taking an over-expansive view of the context of the allegedly infringing use". Lord Justice Arnold said at [58] that while he had some sympathy with Mr Justice Mellor's point of view the issue of how far context extends is a difficult one that is best decided in a case where it actually matters. It did not matter in this appeal because the crowded market was relevant to the distinctive character of the claimants' trade marks regardless of how narrowly or broadly the context of the allegedly infringing use was drawn.
No Significant Proportion of the Relevant Public
The third reason why it was alleged that the judge below had wrongly relied on matter extrinsic to the trade marks and the signs in making his decisions on infringement is that there was no evidential basis on which to conclude that there was no significant proportion of the relevant public that was unaware of those other polo-themed trade marks.
Lord Justice Arnold took as his starting point para [129] of Lord Justice Kitchin's judgment in Interflora Inc v Marks and Spencer plc 2015] FSR 10, [2015] ETMR 5, [2015] BUS LR 492, [2015] Bus LR 492, [2014] WLR(D) 473, [2014] EWCA Civ 1403 where he said that the court may properly find infringement if a significant proportion of the relevant public is likely to be confused. Referring to para [34 (v)] of the judgment in Comic Enterprises, Lord Justice Arnold added that the court must necessarily have regard to the impact of the accused sign on the proportion of consumers to whom the trade mark is particularly distinctive.
He noted at [61] that the claimants had argued Mr Justice Mellor did not find that no significant proportion of consumers were unaware of the third party uses, nor was there any evidential basis for such a finding. They went on to say that it followed that there must have been a significant proportion of the public to whom the claimants' trade marks were more distinctive than the judge had found and thus more likely to be confused by the use of the defendants' signs. Before addressing that argument, Lord Justice Arnold observed that the use of a triple negative indicated how convoluted it was.
His lordship rejected that argument. The trial judge had made findings as to the distinctive character of the trade marks in the minds of average consumers in each of the relevant markets based upon the totality of the available evidence and he had been right to do so. It did not appear to have been argued at trial that there were distinct publics with different knowledge and therefore different perceptions of the trade marks. Nor did there appear to have been any evidential basis for such a finding. Contrary to the implication of the claimants' argument, there was no obligation on the defendants to prove the negative.
He noted at [61] that the claimants had argued Mr Justice Mellor did not find that no significant proportion of consumers were unaware of the third party uses, nor was there any evidential basis for such a finding. They went on to say that it followed that there must have been a significant proportion of the public to whom the claimants' trade marks were more distinctive than the judge had found and thus more likely to be confused by the use of the defendants' signs. Before addressing that argument, Lord Justice Arnold observed that the use of a triple negative indicated how convoluted it was.
His lordship rejected that argument. The trial judge had made findings as to the distinctive character of the trade marks in the minds of average consumers in each of the relevant markets based upon the totality of the available evidence and he had been right to do so. It did not appear to have been argued at trial that there were distinct publics with different knowledge and therefore different perceptions of the trade marks. Nor did there appear to have been any evidential basis for such a finding. Contrary to the implication of the claimants' argument, there was no obligation on the defendants to prove the negative.
Relevance of Coexistence Agreements
The second respect in which Mr Justice Mellor was alleged to have wrongly relied on matter extrinsic to the claimants' trade marks and the defendants' signs in making his decisions on infringement is that he wrongly relied on the terms of coexistence agreements entered into by the parties with third parties. The Intellectual Property Office defines a coexistence agreement as "a legal agreement whereby two parties agree to trade in the same or similar market using an identical or similar trade mark." It publishes a "Coexistence Agreement: Fact Sheet" on its website.
In support of their contention, the claimants relied on the Court of Justice's decision in Case T-90/05 Omega SA v Office for Harmonisation in the Internal Market (Trade Marks and Designs) [2007] ECR II-145 in which the Court of First Instance said that a coexistence agreement was irrelevant to the assessment of the likelihood of confusion in that case. Mr Justice Mellor said that the Court of First Instance's conclusion on that case was "entirely understandable", but that it did not "establish the more general proposition which the Cs sought to establish i.e. that all co-existence agreements are irrelevant to the assessment of the likelihood of confusion"
The claimants argued that the trial judge had been wrong. Lord Justice Arnold disagreed. He said in para [69]:
"As the judge held, it does not follow that the existence and effects of coexistence agreements between participants in the market are necessarily irrelevant to the assessment of likelihood of confusion. As sub-paragraph (a) of the standard summary set out in paragraph 11 above indicates, the CJEU has repeatedly held that, as stated in the tenth recital to Directive 89/104, "[t]he existence of a likelihood of confusion on the part of the public must … be appreciated globally, taking into account all factors relevant to the circumstances of the case": see e.g. SABEL at [22]. Coexistence agreements may form part of the factual background against which the court or tribunal must make its assessment. In so far as they have effects on the relevant market, it may be necessary to take those effects into account. Even if they have no effect on the market, they may give some insight into what market participants consider to be acceptable or unacceptable. Provided that caution is exercised before drawing any conclusion from this, it may be appropriate to take it into account as part of the global assessment of the likelihood of confusion."
Mr Justice Mello had described the coexistence agreements that both sides had made with Ralph Lauren as "a very useful and practical insight into the market for 'polo' brands and especially those which feature a polo horse and rider motif". However, when it came to carrying out his global assessment, the judge made no reference to any of the coexistence agreements which are in evidence. His conclusion that there was no likelihood of confusion was based in particular upon (i) his evaluation of the distinctive character of the Trade Marks, (ii) his assessment of the degree of visual, aural and conceptual similarity between the Trade Marks and the Signs and (iii) the absence of any significant evidence of actual confusion despite considerable side-by-side trading in some territories. It follows that the judge made no error of law or principle in his treatment of the coexistence agreements.
Whether there had been a Likelihood of Post-Sale Confusion
"As the judge held, it does not follow that the existence and effects of coexistence agreements between participants in the market are necessarily irrelevant to the assessment of likelihood of confusion. As sub-paragraph (a) of the standard summary set out in paragraph 11 above indicates, the CJEU has repeatedly held that, as stated in the tenth recital to Directive 89/104, "[t]he existence of a likelihood of confusion on the part of the public must … be appreciated globally, taking into account all factors relevant to the circumstances of the case": see e.g. SABEL at [22]. Coexistence agreements may form part of the factual background against which the court or tribunal must make its assessment. In so far as they have effects on the relevant market, it may be necessary to take those effects into account. Even if they have no effect on the market, they may give some insight into what market participants consider to be acceptable or unacceptable. Provided that caution is exercised before drawing any conclusion from this, it may be appropriate to take it into account as part of the global assessment of the likelihood of confusion."
Mr Justice Mello had described the coexistence agreements that both sides had made with Ralph Lauren as "a very useful and practical insight into the market for 'polo' brands and especially those which feature a polo horse and rider motif". However, when it came to carrying out his global assessment, the judge made no reference to any of the coexistence agreements which are in evidence. His conclusion that there was no likelihood of confusion was based in particular upon (i) his evaluation of the distinctive character of the Trade Marks, (ii) his assessment of the degree of visual, aural and conceptual similarity between the Trade Marks and the Signs and (iii) the absence of any significant evidence of actual confusion despite considerable side-by-side trading in some territories. It follows that the judge made no error of law or principle in his treatment of the coexistence agreements.
Whether there had been a Likelihood of Post-Sale Confusion
This second ground of appeal arose only if the first ground was successful. As it failed this ground was not considered. However, Lord Justice Arnold said that he could not see how there could be a likelihood of post-sale confusion if there was no likelihood of confusion at the point of sale. The trial judge had not said that a likelihood of confusion had been negatived by contextual factors extraneous to the defendants' signs operative at the point of sale despite the signs themselves being confusingly similar to the claimants' marks. On the contrary, he held that the signs were not confusingly similar to the marks which was not a surprising conclusion. Readers who are interested in post-sale confusion should read the Court of Appeal's judgment Iconix Luxembourg Holdings SARL v Dream Pairs Europe Inc and another [2024] EWCA Civ 29 (26 Jan 2024) which I discussed in Trade Marks - Iconix's Appeal on 5 Feb 2024.
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