Trade Marks and Passing off - Lifestyle Equities CV v The Copyrights Group
This was an action for trade mark infringement and passing off, The first claimant was the registered proprietor of the following European Union and United Kingdom trade marks and the second claimant was its exclusive licensee:
The claimants complained that the first, second and third defendants had used a mark which has unfortunately not been reproduced in the BAILII transcript or in any of the reports on Westlaw. They also alleged that those defendants' use of that mark amounted to passing off.
The Allegations
Para 24 of the particulars of claim alleged:
"From a precise date unknown to the Claimants but before the issue of the Claim Form herein and believed to have been from around the second quarter of 2015, the Defendants and each of them have used or threatened to use in the course of trade in the UK and/or in the EU the following signs and each of them, and other signs that also contain a representation of at least one polo payer with a polo stick on a pony…"
"From a precise date unknown to the Claimants but before the issue of the Claim Form herein and believed to have been from around the second quarter of 2015, the Defendants and each of them have used or threatened to use in the course of trade in the UK and/or in the EU the following signs and each of them, and other signs that also contain a representation of at least one polo payer with a polo stick on a pony…"
The third defendant is a well-known polo club in the USA. The signs described in the particular of claim are its logos. The first defendant is a licensing agent and the second defendant is one of the first defendant's directors and its former CEO. The club engaged the licensing agency to develop and market merchandise bearing the disputed signs.
Cause of Action
The claimants brought proceedings for infringement of their EU trade marks under art 9 (2) (b) and (c) of the EU trade mark regulation (Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (Text with EEA relevance) OJ L 154, 16.6.2017, p. 1–990) and infringement of their British trade mark under s.10 (2) and (3) of the Trade Marks Act 1994. As for passing off, they claimed goodwill in this country from their trading and marketing and that the defendants' activities were misrepresentations.
The Defence
The first, second and third defendants admitted marketing merchandise bearing the club's logos but denied infringement on the basis that there would have been no confusion either on the part of distributors or ultimate consumers of the merchandise.
The first, second and third defendants admitted marketing merchandise bearing the club's logos but denied infringement on the basis that there would have been no confusion either on the part of distributors or ultimate consumers of the merchandise.
Trial
The action came on for trial before Mr Justice Marcus Smith by video link between the 4 and 9 Feb 2021, His lordship action handed down his judgment on 10 May 2021 (see Lifestyle Equities CV v The Copyrights Group Ltd and others [2021] EWHC 1212 (Ch)).
The Law
At para [22] of his judgment, the learned judge directed himself as to the elements that must be satisfied for there to be an infringement on the basis of art 9 (2) (b) of the regulation or s.10 (2) of the Act. He directed himself as to the elements that must be satisfied for there to be infringement on the basis of art 9 (2) (c) or s.10 (3) at para [23]. He considered the law of passing off at paras [24] and [25].
The Claim under Art 9 (2) (b) and S.10 (2)
The judge found that certain items of merchandise bearing the club's logo such as clothing, towels and bedding had been marketed in Bugaria, Cyprus and Greece but none had been marketed in the UK. That meant that there could have been no infringement of the British mark. If there was a claim it would have to subsist under art 9 (2) of the regulation in relation to the EU trade marks. There was no dispute that the signs had been used in the course of trade and without the claimants' consent.
His lordship directed himself that the sign appearing on the distributed merchandise had to be be identical with or similar to the registered marks. It was common ground that the club's sign was not identical. He therefore had to ask himself whether there was any visual, aural and/or conceptual similarity. It was clear that all of the marks at issue comprised two distinct components:
- a figurative element comprising one or two polo ponies, with riders and polo mallets; and
- a word element (being either "Beverly Hills Polo Club" in the case of the registered marks or "Greenwich Polo Club" in the case of the club's sign.
After rejecting the claimant's contention that the court should consider infringement based upon the purely figurative elements as "an improper attempt to extend the reach of an already too wide claim" the judge concluded that the marks could not possibly be regarded as similar to the sign.
It was not disputed that the goods marketed by the defendants were identical to those for which the marks were registered.
As to whether there was any likelihood of confusion, the judge said at [54]:
"Similarity and the likelihood of confusion are closely linked. However, only if I find there to be identity or similarity does the question of likelihood of confusion arise. Given my findings, I can deal with the question of confusion relatively briefly. In my judgment, the reasonably well informed and reasonably circumspect consumer – even reading an unfamiliar alphabet – could not be confused by the marks here in question."
"Similarity and the likelihood of confusion are closely linked. However, only if I find there to be identity or similarity does the question of likelihood of confusion arise. Given my findings, I can deal with the question of confusion relatively briefly. In my judgment, the reasonably well informed and reasonably circumspect consumer – even reading an unfamiliar alphabet – could not be confused by the marks here in question."
In the absence of any likelihood of confusion, there could be no infringement under art 9 (2) (b) of the EU trade mark regulation.
The Claim under Art 9 (2) (c) and S.10 (3)
Even though his conclusion in relation to the similarity of the marks in question meant that the claim under this head must fail, Mr Justice Marcus Smith considered each of the elements that he had identified in para [23] of his judgment.
The first three requirements, namely use of a sign by a third party in the relevant territory, use of a sign by a third party in the course of trade and use of the sign in relation to goods and services, had clearly been met. Use without consent was admitted but it was pointed out by the defendants that consent was not required.
The judge had already found that the sign was not similar to the registered marks in relation to the art 9 (2) (b) and s.10 (2) claim. In view of his findings as to lack of similarity, it was very difficult to see the enhanced reputation creating a link in the mind of the average consumer resulting in injury. There was very little evidence of enhanced reputation in Bulgaria, Cyprus or Greece. Most of the evidence of reputation related to Dubai, Egypt and elsewhere in the Middle East and India. He had no evidence of any kind of link in the mind of the average consumer.
It followed that there could be no infringement under art 9 (2) (c) or s.10 (3).
The first three requirements, namely use of a sign by a third party in the relevant territory, use of a sign by a third party in the course of trade and use of the sign in relation to goods and services, had clearly been met. Use without consent was admitted but it was pointed out by the defendants that consent was not required.
The judge had already found that the sign was not similar to the registered marks in relation to the art 9 (2) (b) and s.10 (2) claim. In view of his findings as to lack of similarity, it was very difficult to see the enhanced reputation creating a link in the mind of the average consumer resulting in injury. There was very little evidence of enhanced reputation in Bulgaria, Cyprus or Greece. Most of the evidence of reputation related to Dubai, Egypt and elsewhere in the Middle East and India. He had no evidence of any kind of link in the mind of the average consumer.
It followed that there could be no infringement under art 9 (2) (c) or s.10 (3).
Passing off
The judge noted that it was not seriously contended that the claimants could succeed in relation to passing off where they had failed under art 9 (2) (b) and (c) of the EU trade mark regulation. Moreover, his lordship was not persuaded that the tort of passing-off had an extra-territorial effect.
Liability on Other Grounds
As Mr Justice Marcus Amith had found that there had been no trade mark infringement under art 9 (2) (b) or (c) of the EU trade mark regulation or s.10 (2) or (3) of the Act it followed that the defendants could not be jointly or severally liable for such alleged wrongdoing. However, there remained the question of whether in relation to their conduct in other respects, it could be said that the defendants were liable for infringing the claimants' rights.
"I consider that a court should be extremely careful in finding such business activities as constituting use of the brand in the course of trade, for the very obvious reason that such a finding would involve potentially enjoining a perfectly legitimate business activity in promoting the brands of others."
One of the claimants' complaints was the first defendant's reference to the third defendant's signs in trade mark revocation or opposition proceedings before the EU Intellectual Property Office. The learned judge said at para [68]:
"I am satisfied that the invocation of even an identical sign in such proceedings cannot constitute an infringement of the rights of the Claimant in the Logo. The whole point of such proceedings is to establish or vindicate the rights of the parties to such proceedings, and it would be wrong for such use, in the course of litigation, to be precluded or constrained by a separate infringement action. Parties ought to be free to advance such points as they are advised before tribunals tasked with evaluating the validity or otherwise of rights asserted."
"I am satisfied that the invocation of even an identical sign in such proceedings cannot constitute an infringement of the rights of the Claimant in the Logo. The whole point of such proceedings is to establish or vindicate the rights of the parties to such proceedings, and it would be wrong for such use, in the course of litigation, to be precluded or constrained by a separate infringement action. Parties ought to be free to advance such points as they are advised before tribunals tasked with evaluating the validity or otherwise of rights asserted."
The claimants also objected to the first defendant's seeking to promote the third defendant's business and brand. His lordship said:
"These activities are very far removed from a third party using a sign similar to that of the Logo in the course of trade. The trade, in order to be relevant for present purposes, cannot be the trade of that of a brand agent such as the Copyrights Group: the Claimants' marks are not registered in relation to such services. What we are here concerned with is infringement by the use of signs similar to that of the Logo in respect of classes of goods in relation to which the Claimants have some form of protection."
The claim against the first defendant failed in limine.
As for the second defendant, the judge said at [72]:
"However, it does seem to me that even if the conduct of the [first defendant] amounted to an infringement of the Claimants' rights, I would require some persuading that the limited activity of [the second defendant] rendered him liable as a joint tortfeasor. In particular, it seems to me that the mere signing of contracts on behalf of the company – which, of course, results in only the company assuming an obligation – is a tenuous basis for a contention that [the second defendant] was a joint tortfeasor with the company. Equally, the references to [the second defendant's] role in the [first defendant] – as stated on the Website – are unrelated to the Greenwich Polo Club and the Greenwich Signs, and merely described [the second defe4ndant's] role generally."
Given the judge's other findings on infringement and in particular those in relation to the first defendant, – it was clear that the claims against the second must fail.
Having dismissed the claims against the first and second defendants, the claim of joint liability against the third defendant was also dismissed in para [71[.
"However, it does seem to me that even if the conduct of the [first defendant] amounted to an infringement of the Claimants' rights, I would require some persuading that the limited activity of [the second defendant] rendered him liable as a joint tortfeasor. In particular, it seems to me that the mere signing of contracts on behalf of the company – which, of course, results in only the company assuming an obligation – is a tenuous basis for a contention that [the second defendant] was a joint tortfeasor with the company. Equally, the references to [the second defendant's] role in the [first defendant] – as stated on the Website – are unrelated to the Greenwich Polo Club and the Greenwich Signs, and merely described [the second defe4ndant's] role generally."
Given the judge's other findings on infringement and in particular those in relation to the first defendant, – it was clear that the claims against the second must fail.
Having dismissed the claims against the first and second defendants, the claim of joint liability against the third defendant was also dismissed in para [71[.
Brexit
As his lordship found there was no claim against any of the defendants for trade mark infringement or passing off he did not need to consider his jurisdiction following the expiry of the implementation or transition period provided by art 126 of the agreement for the withdrawal of the UK from the EU. It does not seem to have occurred to him or indeed any of the counsel that he could no longer sit as an EU trade mark court when he tried the action. In that regard, his judgment stands in interesting contrast to Mr David Stone's in Lutec (UK) Ltd and others v Cascade Holdings Ltd and another [2021] EWHC 1936 (IPEC) (09 July 2021) which I discussed in Registered Designs - Lutec (UK) Ltd v Cascade Holdings Ltd on 2 Aug 2021. He referred to the Brussels I Regulation Recast at para [75] of his judgment even though that instrument had ceased to apply to the UK after 23:00 on 31 Dec 2020. It would probably have made no difference to the outcome of the litigation had the issue of jurisdiction to try infringements in Bulgaria, Cyprus and Greece been pointed out to the judge, but it might have made for a shorter and less expensive trial.
Counterclaim
As his lordship found there was no claim against any of the defendants for trade mark infringement or passing off he did not need to consider his jurisdiction following the expiry of the implementation or transition period provided by art 126 of the agreement for the withdrawal of the UK from the EU. It does not seem to have occurred to him or indeed any of the counsel that he could no longer sit as an EU trade mark court when he tried the action. In that regard, his judgment stands in interesting contrast to Mr David Stone's in Lutec (UK) Ltd and others v Cascade Holdings Ltd and another [2021] EWHC 1936 (IPEC) (09 July 2021) which I discussed in Registered Designs - Lutec (UK) Ltd v Cascade Holdings Ltd on 2 Aug 2021. He referred to the Brussels I Regulation Recast at para [75] of his judgment even though that instrument had ceased to apply to the UK after 23:00 on 31 Dec 2020. It would probably have made no difference to the outcome of the litigation had the issue of jurisdiction to try infringements in Bulgaria, Cyprus and Greece been pointed out to the judge, but it might have made for a shorter and less expensive trial.
Counterclaim
The defendants had counterclaimed for a declaration that a 4th sign that they proposed to use would not infringe the registered trade marks. He declined to grant the relief at [77] on the ground that it was inappropriate to make a declaration in a situation that was so divorced from the specifics in which questions of infringement must be considered.
Further Information
Further Information
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