Trade Marks and Passing off - Claridge's Hotel Ltd v Claridge Candles Ltd

Claridge's  Hotel
















Jane Lambert

Intellectual Property Enterprise Court (Mr Recorder Campbell) Claridge's Hotel Ltd v Claridge Candles Ltd and Another  [2019] EWHC 2003 (IPEC)

This was an action for trade mark infringement and passing off. There was also a counterclaim for revocation of the marks in suit for non-use.  The claimant was the owner and operator of Claridge's, the well-known luxury hotel on the corner of Brook Street and Davies Street.  The defendants were a small private company that supplied candles like the one in the photograph below and its only director and majority shareholder, Denise Shepherd, who lives on a street that happens to be called Claridge Court.

The Claimant's Mark
The claimant registered the word CLARIDGE'S as a UK trade mark with effect from 22 July 2005 for the following goods and services:

Class 3: "Toiletries; shampoos; conditioners; bath preparations; body lotions; essential oils; shower gels; moisturiser".
Class 5: "Bath preparations; hair care and hair cleaning products; hand care and hand cleaning products".
Class 16: "Printed publications; magazines"
Class 35: "Retail services connected with the sale of food and foodstuffs, drinks (alcoholic and non-alcoholic), flowers and flower arrangements; online electronic retail services connected with the sale of food and foodstuffs, drinks (alcoholic and non-alcoholic); business management of hotels; business management of health clubs and spas; provision of business facilities and services"
Class 43: "Hotel, restaurant, cafe and bar services; arranging and booking hotels and accommodation services; accommodation reservation services; provision of facilities for meetings, functions, conferences and conventions; catering services"
Class 44: "Provision of beauty treatments and therapies; pedicure and manicure services; depilatory services; cosmetic services; health spa services; massage services; flower arranging services"

The Causes of Action
The claimant complained that the sale of candles by the first defendant under the CLARIDGE LONDON mark in the get-up in the photo to the left infringed its trade mark and amounted to passing off.  It sued the defendants for trade mark infringement under s.10 (2) and (3) of the Trade Marks Act 1994.

Procedural History
An unsuccessful application was made by the claimant for summary judgment on 18 Jan 2019.  A case management conference took place before His Honour Judge Hacon on 7 Feb 2019.  The action and counterclaim came on for trial before Mr Recorder Campbell QC on 16 and 17 July 2019.  He delivered judgment on 29 July 2019.

The Issues
The learned recorder identified the following issues that remained outstanding at the start of the trial:

"Infringement of the Claimant's '526 registered trade mark
1. Whether the Claimant's 526 mark has an enhanced distinctive character and/or reputation in the UK in relation to any of the goods or services in relation to which it is registered, and if so, which of them.
2. Whether the Defendants' acts done in relation to their CLARIDGE sign constitute infringement pursuant to s 10 (3) of the Trade Marks Act 1994 ("the Act").
3. Whether the Defendants' acts done in relation to its CLARIDGE sign constitute infringement pursuant to s 10 (2) of the Act.

Passing off

4. Whether the Defendants' use of CLARIDGE amounts to passing off.

Liability of the Second Defendant

5. Whether the Second Defendant is liable as a primary tortfeasor for the acts of trade mark infringement and passing off complained of.

Counterclaim for revocation of the Claimant's trade marks

6. Whether the Claimant has put its '526 mark to genuine use in the UK, and if so in relation to which goods and services."

Whether the Claimant's 526 mark has an enhanced distinctive character and/or reputation in the UK in relation to any of the goods or services in relation to which it is registered, and if so, which of them.
S.10 (3) of the Trade Marks Act 1994 provides:

"A person infringes a registered trade mark if he uses in the course of trade in relation to goods or services a sign which - (a) is identical with or similar to the trade mark, where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark."

A new subsection (3A) which was inserted by reg 10 (2) of the Trade Marks Regulations 2018  further provides:

"Subsection (3) applies irrespective of whether the goods and services in relation to which the sign is used are identical with, similar to or not similar to those for which the trade mark is registered."

The first question that Mr Recorder Campbell addressed was whether the trade mark had a reputation in the  UK.  He said at paragraph [20] that he was entirely satisfied that the mark CLARIDGE'S has a very substantial reputation in the UK when used in relation to hotel services. There was a vast amount of evidence to that effect. Its turnover had been about £50 million or more annually since 2008. Its marketing expenditure had been about £1.5 million or more annually since 2008, It had enjoyed wide coverage in the press and on TV and had acquired a massive collection of international awards.

He added at paragraph [21]:

"Furthermore I find that this reputation of the CLARIDGE's mark goes beyond the mere fact that the hotel is very well known. In particular the CLARIDGE's mark has an image of luxury, glamour, elegance, and exclusivity as a result of the nature and extent of the Claimant's use thereof. Again there was ample evidence to support this conclusion. Much of it overlapped with the evidence mentioned above, but there was further evidence of the hotel's art deco history, its many restorations and re-designs by world famous designers, and its renown as a hotel suitable for royalty, heads of state, and VIPs. The Defendant did not dispute this evidence,"

Whether the Defendants' acts done in relation to their CLARIDGE sign constitute infringement pursuant to s 10 (3) of the Trade Marks Act 1994
The recorder referred to the 9 point test for infringement under art 10 (3) in Interflora Inc v Marks and Spencer plc [2015] EWCA Civ 1403, [2014] FSR 10 which the Court of Appeal applied in Comic Enterprises Ltd v Twentieth Century Fox Film Corporation [2016] EWCA Civ 41, [2016] ETMR 22 at paragraph [111]:

"In Interflora this court explained (at [69]) that a proprietor of a registered trade mark alleging infringement under Article 5(2) must therefore show that the following requirements are satisfied: (i) the registered trade mark must have a reputation in the relevant territory; (ii) there must be use of a sign by a third party in the relevant territory; (iii) the use must be in the course of trade; (iv) it must be without the consent of the proprietor; (v) it must be of a sign which is identical with or similar to the trade mark; (vi) it must be in relation to goods or services; (vii) it must give rise to a link between the sign and the trade mark in the mind of the average consumer; (viii) it must give rise to one of three types of injury, that is to say, (a) detriment to the distinctive character of the trade mark, (b) detriment to the repute of the trade mark, or (c) unfair advantage being taken of the distinctive character or repute of the trade mark; and (ix) it must be without due cause."

Ar [27] Mr Recorder Campbell noted that in the light of his previous finding on reputation the live issues in this case were:

"1) Whether the Defendants' use gives rise to a link between their sign and the Claimant's mark in the mind of the average consumer, requirement (vii) in Comic; and
2) Whether the Defendants' use gives rise to one of three types of injury, summarised as (a) dilution (b) tarnishing or (c) unfair advantage, also known as free-riding; requirement (viii) in Comic."

At paragraph [51] the recorder concluded that there was a link between the first defendant's sign and the registered mark  in the mind of the average consumer because of the similarity in the marks, the fact that both are premium offerings, the strength of the mark's reputation and the degree of its distinctive character.

As to whether the defendants' use had injured the claimant, the recorder said at [54]:

"I consider that notwithstanding the Defendants' own intentions and views, the effect of their use of the CLARIDGE mark will have been to cause a transfer of an image from the Claimant's mark to the Defendants' sign in the mind of the average consumer. In particular the Defendants' sign does not merely take advantage of the fact that the Claimants' mark is so well known in relation to hotel services, but also takes advantage of its reputation for luxury, glamour, elegance, and exclusivity. I have no doubt that the Defendants' use of this sign does in fact enable them to charge higher prices for their products, and/or enables them to sell more of their products to consumers. As such it has an effect on the economic behaviour of their customers. This is not merely a commercial advantage but an unfair one."

In view of his findings on reputation, a link between the sign and mark and the taking of "unfair advantage" of the claimant's reputation, Mr Recorder Campbell held that the first defendant's use of its sign infringed the claimant's trade mark under s.10 (3) of the Act.

Whether the Claimant has put its '526 mark to genuine use in the UK, and if so in relation to which goods and services.
The recorder found that there had been no genuine use of the registered mark for many of the goods and services for which it had been registered.

Whether the Defendants' acts done in relation to its CLARIDGE sign constitute infringement pursuant to s 10 (2) of the Act.
S.10 (2) of the Act provides:

"A person infringes a registered trade mark if he used in the course of trade a sign where because – 

(a) the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or 
(b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered, 

there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark."

As the recorder had found that there had been no genuine use for any of the goods relied on for the claim under s.10 (2), that cause of action fell away.

Whether the Defendants' use of CLARIDGE amounts to passing off.
In Reckitt and Colman Products Ltd v Borden Inc and others [1990] 1 WLR 491, [1990] RPC 341, [1990] WLR 491, [1990] 1 All ER 873, [1990] UKHL 12, Lord Oliver said:

"The law of passing off can be summarised in one short general proposition - no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get-up" (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff."

There was no dispute as to the existence of goodwill in relation to hotel services or as to the likelihood of damage if misrepresentation could be proved.  The key issue was whether there had been misrepresentation.  The recorder considered that there had been, He said at [101]:

"I consider that the Defendants' use of CLARIDGE on its products is likely to lead the public to believe that the goods offered by the Defendant are the goods of the Claimant or that there is some trade connection or association between the Claimant and the Defendants, notwithstanding the differences between hotel services and the Defendants' goods (eg candles). My reasoning is essentially the same as set out above in relation to likelihood of confusion in the context of s 10(3). In particular I rely on the similarity in the marks, the fact that both are premium offerings, the strength of the mark's reputation, and the degree of its distinctive character."

It followed that the claimant had succeeded on passing off.

Whether the Defendants' acts done in relation to its CLARIDGE sign constitute infringement pursuant to s 10 (2) of the Act.
The claim against the second defendant relied entirely on her personal participation in the various acts of wrongdoing mentioned above and not on a common design between the director and shareholder and the company.  An application had been made for permission to amend the particulars of claim to plead that cause of action after the case management conference but the judge would not allow it.  Referring to MCA Records Inc and another v Charly Records Ltd and others [2002] FSR 26, [2003] 1 BCLC 93, [2002] BCC 650, [2002] EMLR 1, [2001] EWCA Civ 1441, [2002] ECDR 37 and Standard Chartered Bank v Pakistan National Shipping Corp. [2003] 1 LLR 227, [2003] AC 959, [2003] 1 All ER 173, [2002] 3 WLR 1547, [2003] 1 BCLC 244, [2002] 2 All ER (Comm) 931, [2002] BCC 846, [2003] 1 AC 959, [2003] 1 Lloyd's Rep 227, [2002] CLC 1330, [2002] UKHL 43, the recorder considered the second defendant's personal involvement in the wrongdoing at [108]:

"So if one asks the question as to which natural person actually offered CLARIDGE branded candles to the public, or for that matter which natural person committed any of the acts complained of, the answer must be that it was Ms Shepherd. There is nothing to suggest either of her daughters did so instead of her, and no other possibility was put forward. I accept that Ms Shepherd may have done so in the course of her employment with the First Defendant, although this was not actually established, but that does not matter. Ms Shepherd is not liable because she is a director, she is liable because she committed an infringement. She is just as liable as the lorry driver in Aldous LJ's example and she would not have a defence simply because she committed the infringement in the course of her employment."

The Judgment
Mr Recorder Campbell set out his conclusions at [109]:
"a) The action for infringement of the '526 mark succeeds under s 10 (3) of the Act, but not s 10 (2).
b) The action for passing off succeeds.
c) The counterclaim for revocation of the '526 mark succeeds to the extent explained above.
d) Ms Shepherd is personally liable for the acts complained of."

Anyone wishing to discuss this case or trade mark infringement or passing off generally may call me on 020 7404 5252 during office hours or send me a message through my contact page,

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