Trade Marks - Monster Energy Company v Red Bull

	RED DAWG
RED BULL

Jane Lambert

Chancery Division (Mr Justice Adam Johnson) Monster Energy Company v Red Bull GmbH [2022] EWHC 2155 (Ch) (12 Aug 2022)

One of the grounds for opposing a trade mark is that it is identical with or similar to an earlier trade mark that has a reputation in the United Kingdom and the use of the later mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.  That raises the question of what constitutes "unfair advantage" of an earlier mark.  A case that sheds light on that issue is Mr Justice Adam Johnson's decision in Monster Energy Company v Red Bull GmbH [2022] EWHC 2155 (Ch) (12 Aug 2022),

This was an appeal against Mr James Hopkin's decision in Re RED DAWG trade mark, Red Bull GmbH v Momster Energy Company in BLO/636/21 of 26 Aug 2021 refusing registration of trade mark number 3497054 under s.5 (3) of the Trade Marks Act 1994. He set out his reasoning in para [87] of his decision:

"I have already found that consumers would not be prone to the effects of direct or indirect confusion. Therefore, I do not believe that consumers would purchase the applicant's goods in the mistaken belief that they are provided by, or connected with, the opponent. Nevertheless, upon encountering the contested mark, it is my view that consumers of the contested mark will certainly be reminded of the third earlier mark; it will, therefore, appear instantly familiar, thereby making it easier for the applicant to establish its mark and to sell its energy drinks without incurring the marketing costs that would usually be required. The contested mark would be able to attract more consumers to purchase goods offered under it than would be the case if the earlier mark was not brought to mind. This would essentially allow the contested mark to free-ride on the reputation of the earlier mark and gain an unfair commercial advantage."

Monster Energy appealed on the ground that Mr Hopkins' overall conclusion was that there was a risk of the contested mark free riding on Red Bull's earlier mark was not a conclusion that was open to him. The appellant contended that there was no evidence directly supporting it or from which a risk of free-riding could properly be inferred,

The learned judge summarized Mr Hopkins's reasoning at para [20] of his judgment:

"What Mr Hopkins seems to have done instead is to say: well, I am satisfied that consumers would make a 'link' between the two marks – I have already said so; and because the contested mark will therefore appear 'instantly familiar', it follows that it will be easier for Monster to establish its marks and sell its energy drinks without incurring the marketing costs that would otherwise have been necessary and that is unfair."

Monster criticized that analysis because it conflated the "link" requirement with the "unfair advantage" requirement.  It contended that that was illegitimate because they are different things at para 4 of its Grounds of Appeal:

"[t]he analysis of whether free riding is likely is a separate legal step in the determination requiring analysis of the evidence in relation to that step."

The appellant argued that Mr Hopkins did not carry out that separate step.  Had he applied his mind to it properly, he would have concluded there was no evidence supporting the conclusion he drew.

The learned judge rejected Monster's contentions and dismissed the appeal. In his opinion, Mr Hopkins' conclusions on the unfair advantage question were not open to challenge. First, the hearing officer's finding that an unfair advantage was made out despite the lack of any subjective intention on Monster's part to take advantage of the earlier RED BULL mark was obviously correct. Secondly, the judge summarized Mr Hopkins's reasoning as follows in para [26] of his judgment:

"i) Irrespective of any subjective intention specifically in relation to the earlier RED BULL mark, Monster obviously chose the proposed sign RED DAWG with a view to it having brand significance, and with a view to it having an impact on their consumers.
ii) I accept that Mr Hopkins does not spell out expressly in [87] that Monster's choice of the RED DAWG mark was intended to have these effects, but (1) it seems to me they are entirely uncontroversial propositions; (2) it is clear from Mr Hopkins' earlier references to [Jack Wills Ltd v House of Fraser (Stores) Ltd, [2014] EWHC 110 (Ch), [2014] FSR 39] which set the context of the analysis in this part of his Decision, that he had in mind, and was dealing with, precisely the species of unfair advantage recognised in that case, which involves consideration of how consumer behaviour is impacted; (3) the logic of [87] obviously rests on Monster having that general intention in relation to its proposed new mark – that was the point of registering it; and (4) earlier, at [42], Mr Hopkins had carried out an assessment of the likely purchasing process for the average consumer, and so had well in mind the impact of the mark on consumer purchasing behaviour.
iii) In short, in my opinion it is entirely obvious that the analysis in para. [87] of the Decision rests on the premise that the RED DAWG mark was intended to influence the economic behaviour of consumers of Monster energy drink products.
iv) The next point is an express finding that, because of the similarity between the marks, consumers encountering the later RED DAWG mark will "certainly be reminded" of the earlier RED BULL mark, even if they are not confused between them. That, moreover, will make it easier for Monster to establish and sell its RED DAWG energy drinks without incurring the marketing costs that would otherwise have been required. That is what gives rise to unfairness in the required sense: RED DAWG will in fact, whether that is what Monster subjectively intended or not, be given a free-ride, and will therefore gain an unfair commercial advantage. There is no "due cause", and so s.5 (3) is engaged."

His lordship could see nothing objectionable in Mr Hopkins' conclusion that the set of factors he relied on gave rise to an unfair advantage even though Monster had no subjective intention of seeking to take advantage of the RED BULL mark.  That was entirely consistent with Mr Justice Arnold's decision in the Jack Wills case.   Mr Justice Adam Johnson  concluded at [47]:

"To express it in more concrete terms, it seems to me it was entirely legitimate for Mr Hopkins (1) to proceed on the basis that in adopting the RED DAWG mark, Monster were intending to seek to influence the economic behaviour of consumers of their products – indeed, that would seem the most obvious reason for doing so; and (2) to infer that the similarity between RED BULL and RED DAWG, although not apt to cause confusion, would nonetheless make it easier for Monster to sell its products without incurring the marketing costs that would otherwise have been required. Both appear to me to be entirely legitimate and common-sense propositions."

He reminded himself that: "This Court should not interfere unless it is satisfied that the decision is one which clearly should not have been made" adding "I simply do not consider this is such a case."

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