Trade Marks - D & M Winchester Ltd. v Coleburn Distillers Ltd.
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Puter House, Court of Session (Lord Braid) D & M Winchester Ltd. v Coleburn Distillery Ltd  ScotCS CSOH_66,  CSOH 66
This was an appeal by D & M Winchester Ltd. ("Winchester") from the decision of Mark Bryant on behalf of the Registrar of Trade Marks in Re COLEBURN trade mark D & M Winchester Ltd, v Coleburn Distillers Ltd. BL O/923/22 29 Oct 2022 under s76 (2) of the Trade Marks Act 1994. According to para  of the judgment, this was only the second appeal to the Court of Session from the Trade Marks Registry under that provision. The first had been CCHG Ltd t/a Vaporized v Vapouriz Ltd 2017] ScotCS CSOH_100, 2017 SLT 907.
Proceedings in the Trade Marks Registry
Winchester had applied to register the word COLEBURN as a UK trade mark for various goods and services in classes 32, 33, 39, 40. 41, 43 and 44 under trade mark number UK3600183. Coleburn Distillers Ltd. ("Distillers") opposed Winchester's application under s.5 (1),, and s.5 (2) (a) of the Trade Marks Act 1994 relying on its earlier trade mark number UK3051460 for COLEBURN in classes 33, 39 and 40 and also under s.3 (6). Winchester applied for revocation of UK3051460 and its re-registered mark UK912792214 under s.46 (1) (b). The opposition and revocation proceedings were conjoined and came on before Mr Bryant. By para  of his decision Mr Bryant revoked UK3051460 and UK912792214 in respect of all goods and services except certain ones in class 39. By para  he allowed the opposition in respect of Distillers's application for goods and services in classes 33, 39 and 40. As both sides had been partially successful the hearing officer made no order for costs.
The appeal came on before Lord Braid who listed the following issues at para [7[ of his judgment:
Was the hearing officer incorrect to find that the respondent had demonstrated genuine use of the [Distillers] trade marks in respect of the Revised Specification? Should he have revoked the [Distillers] trade marks in their entirety under section 46 (1) (a) or (b) of the 1994 Act?
Question 2Was the hearing officer incorrect in his assessment of whether the goods and services were identical and accordingly incorrect to refuse the appellant's application for the [Winchester] trade mark in respect of goods and services not connected with warehousing under section 5 (1) of the Act?
Was the hearing officer incorrect to find that there was similarity between the Revised Specification and the class 3, 39 and 40 goods and services?
Was the hearing officer incorrect to find that there was a likelihood of confusion on the part of the average consumer in terms of section 5 (2) (a) of the Act?
"(i) (As just noted) an appeal under section 76 of the Trade Marks Act 1994 is a rehearing. However, it is not a rehearing in the fullest sense. The form of the appeal is in substance one of a review of the decision. The court is permitted to look at the evidence that was led before the hearing officer.
"Question 1: Was the hearing officer incorrect to find that the respondent had demonstrated genuine use of the [Distillers] trade marks in respect of the Revised Specification? Should he have revoked the [Distillers] trade marks in their entirety under section 46 (1) (a) or (b) of the 1994 Act?"
His lordship set out s.46 (1) (a) and (b):
(a) that within the period of five years following the date of completion of the registration procedure it has not been put to genuine use in the United Kingdom, by the proprietor or with his consent, in relation to the goods or services for which it is registered, and there are no proper reasons for non-use;
(b) that such use has been suspended for an uninterrupted period of five years, and there are no proper reasons for non-use"
"(I) Genuine use means actual use of the trade mark by the proprietor or by a third party with authority to use the mark.
(v) The use must be by way of real commercial exploitation of the mark on the market for the relevant goods or services, that is to say, use in accordance with the commercial raison d'etre of the mark, which is to create or preserve an outlet for the goods or services that bear the mark.
(vi) All the relevant facts and circumstances must be taken into account in determining whether there is real commercial exploitation of the mark, including:
(a) whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods and services in question;
(b) the nature of the goods or services;
(c) the characteristics of the market concerned;
(d) the scale and frequency of use of the mark;
(e) whether the mark is used for the purpose of marketing all the goods and services covered by the mark or just some of them;
(f) the evidence that the proprietor is able to provide; and
(g) the territorial extent of the use.
(vii) Use of the mark need not always be quantitatively significant for it to be deemed genuine. Even minimal use may qualify as genuine use if it is deemed to be justified in the economic sector concerned for the purpose of creating or preserving market share for the relevant goods or services. For example, use of the mark by a single client which imports the relevant goods can be sufficient to demonstrate that such use is genuine, if it appears that the import operation has a genuine commercial justification for the proprietor. There is no de minimis rule.
(viii) It is not the case that every proven commercial use of the mark may automatically be deemed to constitute genuine use.
(ix) The burden lies on the registered proprietor to prove use.
(x) When it comes to proof of use for the purpose of determining the extent (if any) to which the protection conferred by registration of a trade mark can legitimately be maintained, the hearing officer must form a view as to what the evidence does and just as importantly what it does not show (per section 100 of the Act) with regard to the actuality of use in relation to goods or services covered by the registration."
The judge referred to s.5 (1) of the Act:
"A trade mark shall not be registered if it is identical with an earlier trade mark and the goods or services for which the trade mark is applied for are identical with the goods or services for which the earlier trade mark is protected."
Winchester contended that Mr Bryant had not had regard to the make up of the average consumers of Distillers's services. They consisted of investors who owned casks of whisky or brokers. They were discerning and paid close attention to the services they were purchasing like those in Tomatin Distillery Ltd v Tomatin Trading Company Ltd 2022] ECC 24,  ScotCS CSIH_28,  CSIH 28, 2022 SCLR 316, 2022 SLT 745, 2022 GWD 20-286. Winchester argued that the hearing officer had erred in concluding that sightseeing tours were identical to whisky warehouse tours.
The judge rejected those contentions. In his view, the hearing officer had identified and correctly applied the Meric principle. If Winchester's mark could be registered for sightseeing tours it would be entitled to use the same mark as Distillers for whisky warehouse tours which would inevitably lead to confusion.
"A trade mark shall not be registered if because—
(a) it is identical with an earlier trade mark and is to be registered for goods or services similar to those for which the earlier trade mark is protected,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark."
“(i) There is no minimum level of similarity required under section 5 (2) (a) of the Act
(a) The respective uses of the respective services;
(b) The respective users of the respective services;
(c) The physical nature of the acts of service;
(d) The respective trade channels through which the services reach the market; and(e) The extent to which the respective services are competitive. This inquiry may take into account how those in trade classify services, for instance, whether market research companies, who of course act for industry, put the services in the same or different sectors,"
His lordship held that the hearing officer had identified the above principles. The question was whether he had erred in applying them. Mr Bryant had held that there was a low to medium degree of similarity between Winchester's goods which were drinks and Distillers's services which were tours and warehousing. There was however a high degree of similarity between tours of whisky distilleries and tours relating to whisky warehousing.
The judge directed himself that to the extent that the parties' respective goods and services are similar, it was necessary to consider the second part of section 5 (2) (a), namely whether such similarity gives rise to a likelihood of confusion on the part of the public.
The parties agreed that the following principles apply:
(ii) The matter must be judged through the eyes of the average consumer of the services in question
(iii) The average consumer is deemed to be reasonably well informed and reasonably circumspect and observant. Their attention varies according to the category of services in question;
(iv) A lesser degree of similarity between the services may be offset by a greater degree of similarity between the marks, and vice versa (the interdependency principle);
(v) 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;
(vi) Mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient. If the association between the marks creates a risk that the public might believe that the respective services come from the same or economically linked undertakings, there is a likelihood of confusion;
(vii) Account must be taken of the fact that, in view of the nature of the services concerned and in particular their price and their highly technological character, the average consumer displays a particularly high level of attention at the time of purchase of such services;
(viii) The assessment must take into account the manner in which these services are likely to be selected by the average consumer in the course of trade;
(ix) Where it is established in fact that the objective characteristics of a given product mean that the average consumer purchases it only after a particularly careful examination, it is important in law to take into account that such a fact may reduce the likelihood of confusion between marks relating to such services at the crucial moment when the choice between the services is made,"
(ii) The relevant time for determining whether there was bad faith on the part of the appellant is the time of filing the application for registration;
(iii) Bad faith includes not only dishonesty, but also dealings which fall short of the standards of acceptable commercial behaviour. The appellant's own standards of honesty (or acceptable commercial behaviour) are irrelevant to the enquiry;
(iv) A person is presumed to have acted in good faith unless the contrary is proved;
(v) The onus is on the respondent to establish bad faith. The standard of proof is on the balance of probabilities, but cogent evidence is required due to the seriousness of the allegation. It is not enough to prove facts which are also consistent with good faith."
"(a) What, in concrete terms, was the objective that the applicant has been accused of pursuing?