Trade Marks - Iconix Luxembourg Holdings SARL v Dream Pairs Europe

 

Jane Lambert

Business and Property Courts, Intellectual Property List (Mr Justice Miles) Iconix Luxembourg Holdings SARL v Dream Pairs Europe Inc and another [2023] EWHC 706 (Ch) (28 March 2023)

This was a trade mark dispute.  The claimant was the owner of the Umbro brand, one of the biggest and most famous in sportswear.  It holds a number of well-known trade marks in the UK including the following which is registered under trade mark number UK00000991668 for “articles of clothing for use in sports, athletics or gymnastics.”

The claimant also holds this mark which was filed for footwear and clothing at the European Intellectual Property Office in 2003 and is now registered in the UK:

The defendants distribute football boots and other footwear and clothing through Amazon and eBay,  Their goods are marked with the following logo as in the photo of the green football boot above.

 

The defendants have registered that sign as a UK trade mark for clothing and footwear. 

The claimant sued the defendants for trade mark infringement under s.10 (2) (b) and s.10 (3) of the Trade Marks Act 1994,   It also sought the invalidation of the DREAM PAIRS trade mark under s. 47 (2). It was common ground that the claim for the declaration of invalidity under s.47 stood or fell with the claim for infringement under s.10.

The action came on for trial before Mr Justice Miles between 14 and 16 March 2023.   He delivered judgment in Iconix Luxembourg Holdings SARL v Dream Pairs Europe Inc and another [2023] EWHC 706 (Ch) on 28 March 2023.  By para [196] of his judgment he dismissed the action.

The learned judge outlined the provisions of s.10 on which the claimant relied at para [28] of his judgment:

“(2) A person infringes a registered trade mark if he uses 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.

(3) 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,
(b) [deleted by amendment]

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.

(3A) 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.
.................................
(4) For the purposes of this section a person uses a sign if, in particular, he—

(a) affixes it to goods or the packaging thereof;
(b) offers or exposes goods for sale, puts them on the market or stocks them for those purposes under the sign, or offers or supplies services under the sign;
(c) imports or exports goods under the sign;
(ca) uses the sign as a trade or company name or part of a trade or company name;
(d) uses the sign on business papers and in advertising; or
(e) uses the sign in comparative advertising in a manner that is contrary to the Business Protection from Misleading Marketing Regulations 2008.”

He explained in the next paragraph that the Act was intended to implement the Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trade marks (recast) (Text with EEA relevance) OJ L 336, 23.12.2015, p. 1–26 as interpreted by the Court of Justice of the European Union ("the CJEU").  He added that courts of first instance in the UK continue to be bound by the judgments of the CJEU that were delivered before 31 Dec 2020.  He then proceeded to analyse the case law on the application of s.10 (2) (b) and (3) of the Act.

Starting first with s.10 (2) (b) he mentioned para [285] of the judgment of  Mr Justice Arnold in Sky Plc and others v Skykick UK Ltd and another  [2018] ETMR 23, [2018] RPC 5, [2018] EWHC 155 (Ch) where that judge restated the 6 conditions that must be satisfied for infringement under s.10 (2) (b):

"(i) there must be use of a sign by a third party within the relevant territory; (ii) the use must be in the course of trade; (iii) it must be without the consent of the proprietor of the trade mark; (iv) it must be of a sign which is at least similar to the trade mark; (v) it must be in relation to goods or services which are at least similar to those for which the trade mark is registered; and (vi) it must give rise to a likelihood of confusion on the part of the public."

In para [32] of his judgment, Mr Justice Miles said that

"The questions of similarity and likelihood of confusion (and link for s.10 (3), see below) are to be considered from the point of view of the notional 'average consumer,'”

His lordship referred to para [34] of Lord Justice Kitchin's judgment in  Comic Enterprises Ltd v Twentieth Century Fox Film Corporation [2016] FSR 30, [2016] EWCA Civ 41, [2016] ETMR 22 where he offered the following guidance:

“i) the average consumer is a hypothetical person or, as he has been called, a legal construct; he is a person who has been created to strike the right balance between the various competing interests including, on the one hand, the need to protect consumers and, on the other hand, the promotion of free trade in an openly competitive market, and also to provide a standard, defined in EU law, which national courts may then apply;
ii) the average consumer is not a statistical test; the national court must exercise its own judgment in accordance with the principle of proportionality and the principles explained by the Court of Justice to determine the perceptions of the average consumer in any given case in the light of all the circumstances; the test provides the court with a perspective from which to assess the particular question it has to decide;
(iii) in a case involving ordinary goods and services, the court may be able to put itself in the position of the average consumer without requiring evidence from consumers, still less expert evidence or a consumer survey. In such a case, the judge can make up his or her own mind about the particular issue he or she has to decide in the absence of evidence and using his or her own common sense and experience of the world. …”

Mr Justice Miles noted para [73] of Lord Justice Kitchin's judgment in Maier and another v ASOS Plc and another [2016] Bus LR 1063, [2015] EWCA Civ 220, [2015] FSR 20, [2015] ETMR 26 that similarity of sign and mark was a threshold requirement before infringement can be found.  He then quoted paras [58] to [60] of Lord Justice Floyd's judgment in JW Spear & Son Ltd and others v Zynga Inc [2013] EWCA Civ 1175, [2014] Bus LR 148, [2014] BUS LR 148, as to what happens after the threshold has been crossed:

“[58]. … Where there is some overall similarity, even faint, then it is necessary to carry out the global assessment, taking account of all relevant circumstances. Moreover, in such cases, the enhanced distinctive character of the mark may play a role in increasing the likelihood of confusion.
[59] On the other hand the cases do show that the General Court has said that where there is (a) average visual and phonetic similarity, but no conceptual similarity (Wesergold), or (b) a number of visual and phonetic features which precluded the signs from being perceived as similar (Ferrero), or (c) no visual or phonetic similarity but a low degree of conceptual similarity (Lufthansa), or (d) a common suffix (Kaul), there may yet be no similarity overall between mark and sign. I have no difficulty with these conclusions: it is only overall similarity which counts.
[60] Thus I would summarise the position in the following way:

i) The court should assess the phonetic, visual and conceptual similarity of mark and sign and decide whether, overall, mark and sign would be perceived as having any similarity by the average consumer.
ii) If no overall similarity at all would be perceived, the court would be justified in declining to go on and consider the likelihood of confusion applying the global appreciation test, as Article 9(1)(b) is conditional on the existence of some similarity. Such situations are not likely to occur often in contested litigation, but where they do occur, it is not legitimate to take account of any enhanced reputation or recognition of the mark.
iii) Where the average consumer would perceive some overall similarity, however faint, the court must go on to conduct the global appreciation test for the likelihood of confusion, taking account where appropriate of any enhanced reputation or recognition of the mark.
iv) In conducting the global appreciation test the court must take forward its assessment of the degree of similarity perceived by the average consumer between mark and sign.”

On the approach for assessing the likelihood of confusion, Mr Justice Miles cited para [33] of Lord Justice Floyd's judgment in Spier at para [36]:

“(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;
(k) if the association between the marks causes the public to wrongly 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 of his judgment, Mr Justice Miles directed himself that:

"The exercise in an infringement case is to compare the actual use made of the sign with the mark as registered. The infringement test is founded upon the mark as registered and not upon material which the proprietor may have used in connection with it, and the court must consider the notional use of the mark in question across the whole range of goods for which it is registered: see Maier at [77] and [78]."

He referred to para [78] of Lord Justice Kitchin's judgment in Maier:

“Of course [the mark] may have become more distinctive as a result of the use which has been made of it. If so, that is a matter to be taken into account for, as the Court of Justice reiterated in Canon at [18], the more distinctive the earlier mark, the greater the risk of confusion. But it may not have been used at all, or it may only have been used in relation to some of the goods or services falling within the specification, and such use may have been on a small scale. In such a case the proprietor is still entitled to protection against the use of a similar sign in relation to similar goods if the use is such as to give rise to a likelihood of confusion."

Mr Justice Miles added that Lord Justice Kitchin added at para [79] of Maier that in assessing the likelihood of confusion, the court “…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.”  Similarly, Mr Justice Miles cited Lord Justice Kitchin's words at para [34 (v)] of Comic:

“…if, having regard to the perceptions and expectations of the average consumer, the court concludes that a significant proportion of the relevant public is likely to be confused such as to warrant the intervention of the court then it may properly find infringement.”

As the claimant's trade marks had been registered, and the accused sign used, for footwear and clothing, Mr Justice Miles reminded himself of Mr Justice Arnold's observation in para [58] of his judgment in Jack Wills Ltd v House of Fraser (Stores) Ltd [2014] EWHC 110 (Ch), [2014] FSR 39:

“As has frequently been recognised in trade mark cases involving clothing, clothing is primarily purchased on the basis of visual inspection.”

In relation to actual confusion, the judge also referred to para [80] of Lord Justice Kitchin's judgment in Maier:

“If the mark and the sign have both been used and there has been actual confusion between them, this may be powerful evidence that their similarity is such that there exists a likelihood of confusion. But conversely, the absence of actual confusion despite side-by-side use may be powerful evidence that they are not sufficiently similar to give rise to a likelihood of confusion. This may not always be so, however. The reason for the absence of confusion may be that the mark has only been used to a limited extent or in relation to only some of the goods or services for which it is registered, or in such a way that there has been no possibility of the one being taken for the other.”

Finally, he mentioned para [99] of Mr Justice Arnold's judgment in Jack Willis: 

“No evidence of actual confusion. Counsel for House of Fraser relied strongly on the absence of any evidence of actual confusion. As I have said in a number of judgments, absence of evidence of actual confusion is not necessarily fatal to a claim under art.5 (1) (b). The longer the use complained of has gone on in parallel with use of the trade mark without such evidence emerging, however, the more significant it is. Other relevant factors are the scale of the use complained of and the likelihood of actual confusion being detected.”

Applying these authorities to the case before him, Mr Justice Miles noted that of the 6 conditions for liability mentioned in Skyjack, there were only two in dispute.  These were the fourth and sixth, that is to say, that the accused sign must be at least similar to the registered mark and that there must be a likelihood of confusion on the part of the public.

Starting with the first of those conditions, the judge noted there was disagreement as to how much attention the average consumer would pay to a pair of football boots priced at £25. The judge ruled that the average consumer would exercise a moderate degree of attention to such a purchase.  His lordship compared the claimant's marks and the defendants' sign. He acknowledged that there was some similarity between them in that both involve rhomboid shapes with an outer and inner dominant element and that both sit at an angle. However,  there were also many differences.  His overall assessment from the point of view of the average consumer perspective was that there was at most a very low degree of similarity between the marks and the signs and that such similarity was very faint indeed.  

As for the likelihood of confusion, there was no dispute that there was a high degree of similarity between the goods for which the claimant's marks had been registered and the goods that were sold under the defendants' sign.  As the registered marks had appeared on footwear and clothing used by national football and rugby teams, leading clubs and other sports stars around the world, the judge ruled that those marks had a highly distinctive character.  He considered the pages on the Amazon website through which the defendants marketed their boots.  They clearly identified the brand as DREAM PAIRS without any reference to Umbro.  On a global assessment, the judge was not satisfied that there was a likelihood of confusion among a significant proportion of the public interested in the goods in question and with the characteristics of the average consumer.  

His lordship was pressed by the claimant to consider whether there would be any confusion on the playing field when the boots would be splattered with mud.  He did not consider that a significant proportion of the public (having the characteristics of the average consumer) would see the defendants' logo, even when muddy, as more than very faintly similar to the registered marks.  It was unlikely that a significant proportion of the public would confuse the sign with the marks. 

The judge concluded at para [163] that the claim under s.10 (2) (b) failed.

As for the claim under s.10 (3), the judge directed himself at para [44] of his judgment that Lord Justice Kitchin had set out nine requirements for infringement under that sub-section in Comic:

"(a) the trade mark must have a reputation in the UK; (b) there must be use of a sign by a third party within the UK; (c) the use must be in the course of trade; (d) the use must be without the consent of the proprietor of the trade mark; (e) the use must be of a sign which is at least similar to the trade mark; (f) the use must be in relation to goods or services; (g) the use must give rise to a “link” between the sign and the trade mark in the mind of the average consumer; (g) the use must give rise to one of three types of injury, that is to say: (i) detriment to the distinctive character of the trade mark; (ii) detriment to the repute of the trade mark; or (iii) unfair advantage being taken of the distinctive character or repute of the trade mark; and (i) the use must be without due cause."

He reminded himself that the CJEU had said in Case C-252/07, Intel Corp Inc v CPM United Kingdom Ltd [2009] ETMR 13 at para [30] of its judgment that a likelihood of confusion is not a requirement of s. 10 (3).  However, there had to be a ‘link’ the existence of which had to be assessed globally. He referred to para [120] of the judgment in Maier where Lord Justice Kitchin had said that it was enough that, for the average consumer, the use of the sign complained of would call the registered mark to mind.

Mr Justice Miles gave some useful guidance on detriment to the distinctive character or the repute of the trade mark in paras [47] to [49] of his judgment:

"[47] Detriment to distinctive character (also known as dilution) occurs where the ‘link’ weakens the ability of the relevant mark to identify the goods for which it is registered. One way in which this form of injury will occur is when the mark, which at one time aroused immediate association with the goods for which it is registered, is no longer as capable of doing so (Comic Enterprises at [113]-[118]). The mere presence of a similar sign in the market cannot in itself, however, be the basis of a finding of detriment or a risk of detriment to the distinctive character of the marks (Maier at [127]).
[48] Detriment to the reputation of the mark (also known as tarnishment) occurs when goods for which the sign complained of is used may be perceived by the public in such a way that the power of attraction of the mark is reduced. This occurs particularly where the goods offered under the sign complained of have a characteristic or quality which is liable to have a negative impact on the earlier mark (Comic Enterprises at [119]).
[49] A further requirement of ‘dilution’ and ‘tarnishment’ is that there is at least a serious risk of a change in the economic behaviour of the average consumer of the goods for which the mark is registered. That serious risk can be established by deduction, but not by supposition (Comic Enterprises at [118])."

He also discussed the meaning of the words "takes unfair advantage of" in paras [50] to [53]:

"[50] Unfair advantage will occur when the defendant uses a sign that is similar to a mark with a reputation and rides on the coat-tails of the mark to benefit from its power of attraction, reputation and prestige and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the mark in order to create and maintain its image. This covers, in particular, cases where the image of a mark or a characteristic it projects is transferred to the defendant’s goods: see Arnold J in Enterprise Holdings, Inc v Europcar Group UK Ltd and another [2015] EWHC 17 (Ch), [2015] FSR 22, [2015] ETMR 16at [125]-[126].

[51] Where unfair advantage is claimed the claimant need not show a likelihood of a change in the economic behaviour of customers for which the mark is registered (as it would for dilution or tarnishment) but it should be sufficient to show a change in the economic behaviour of customers for the defendant’s goods or services in order to show that the use of the sign is taking unfair advantage: see Argos v Argos Systems [2018] EWCA 2211 at [107].
[52] Mere advantage will not be enough to give rise to infringement. There must be something that makes that advantage unfair. That can be a deliberate intention to imitate but can be some other factor (Lloyd LJ in Whirlpool Corp and others v Kenwood Ltd [2009] EWCA Civ 753, [2010] RPC 2, [2010] ETMR 7 at [136]).
[53] The use must be without due cause........"

The judge noted at para [165] that the characteristics of the average consumer, the degree of similarity, and the reputation of the registered marks had already been discussed.  He was satisfied that the marks have a reputation in the United Kingdom for football boots and kit and performance wear.  The issues that remained were the existence of a link and the 3 types of injury. No separate issue had been raised about the absence of due cause.

In assessing whether or not there was a link his lordship tool particular account of the following factors some of which had already been addressed in relation to the s.10 (2) (b) claims:

"i) The average consumer is reasonably observant. The average consumer would know that there are many footwear manufacturers and that they deploy branding.
ii) The goods are either identical with or very similar to those for which the Marks are registered. This is a factor in favour of a link.
iii) The Marks have a reputation and are distinctive. This again tends towards a link (other things being equal).
iv) The degree of similarity between the Marks and the Sign is very low indeed.
v) There is no evidence of actual linkage by consumers. In this regard the position is rather different from that of confusion. Consumers who have discovered that they were confused may not do anything about it. On the other hand where the question is whether there is a link or association it is of some relevance that nobody appears to have drawn attention to any link in any review. The evidence before me showed that online reviewers have sometimes commented on associations they have made between Dream Pairs shoes and other brands (such as Ugg and Dr Martens), while recognising that the brands are distinct (and not being confused). There are no similar comments drawing a link with Umbro or its Marks. I think that some weight should be given to this point, albeit it is far from decisive or even substantial.
vi) I do not think that the YouTube review (see [106] above) assists the claimant here. Apart from the fact that he was not called or approached as a witness (so that the evidence can be given little inherent weight), the reviewer was clearly looking to make associations or comparisons in order to fill up his video and make it interesting. He did not have the characteristics of an average consumer. Moreover he only suggested a link if the viewer distorted their eyesight by squinting too much."

Overall, the judge was not satisfied that the use of the defendants' sign would give rise to a link to the registered marks in the mind of the average consumer. Essentially he did not consider that the other factors outweighed the very faint similarity. He was not persuaded that a significant proportion of the public (applying the perspective of the average consumer) would make a mental association between the sign and marks. He said that he would have reached that conclusion even without the factor set out in point (v) above. That was enough to dispose of the s.10 (3) claim but in case he was wrong he addressed the three kinds of possible injury to the marks.   

As far as damage to their distinctive character was concerned, he found no evidence to establish a risk that the use of the defendants' logo had eroded or would erode the power of the marks to identify footwear and clothing made by Umbro. The claimant would have had to prove that there was a serious risk that the dilution alleged would lead to a change in the economic behaviour of Umbro consumers such as reduced sales of Umbro products.  There was no sign that that had happened or was likely to happen in the future.

To prove detriment to the repute of the marks, the claimant would have had to show some negative feature of the goods to which the defendants' logo has been applied that had damaged or was damaging the image or characteristics of the claimant's marks.  At trial, the claimant had contended that the defendants' goods were cheap and of poor quality and that the sale of their goods has damaged or would damage the reputation of the registered marks.  The judge dismissed that contention on the grounds that it had not been pleaded but he added that it was unlikely to have succeeded for several reasons two of which could apply to other cases.  One of those reasons was that

"The claimant failed adequately to explain how making a mental link between the Sign and the Marks (short of confusion) would lead consumers to think that Umbro shoes are of lower quality than otherwise would have been the case. There was no evidential basis for such a proposition."

Another reason was that the claimant had not pleaded or advanced evidence that there was a serious risk that this allegedly detrimental association was likely to affect consumers and reduce the sales of Umbro products. 

Finally, as to the third type of damage, the judge held that the claimant had failed to take any advantage of the reputation of the marks or that any such advantage would have been unfair.

It followed that the claim under s.10 (3) also failed.

This is a carefully documented judgment which will be a valuable resource for skeleton arguments in infringement cases as well as for opposition and invalidity cases in the Trade Marks Registry,  The judge's analysis of the likelihood of confusion in s.10 (2) (b) cases and his observations on detriment to distinctive character and repute and unfair advantage will be particularly useful.

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