Trade Marks - Engineer Ai Global Ltd v Appy Pie Ltd.
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Intellectual Property Enterprise Court (HH Judge Melissa Clarke) Engineer AI Global Ltd v Appy Pie Ltd and another [2024[ EWHC 1430 (IPEC) 19 June 2024
This was the trial of an action for trade mark infringement and a counterclaim for invalidation of the claimant's marks. The claimant offers software platforms that enable users with no programming skills to develop applications without coding through graphical user interfaces. It carries on business as "Builder AI" over a website at https://www.builder.ai/. The first defendant is an English company that is owned and directed by Shagun Gupta. That lady is the wife of Abhinav Girdhar, a partner of the second defendant Appy Pie LLP which is incorporated in India. The second defendant also helps users without programming expertise to develop applications through its website at https://www.appypie.com/.
The Claimant's Marks
The claimant registered the following UK trade marks:
The Claim
The claimant alleged that the defendants had infringed the Builder Word Mark and the Builder House Mark by using the word "Builder" in relation to their own products as in "App BUILDER", "Chatbot Builder" and "WebsiteBUILDER." It also complained that the second defendant had infringed the Builder ai World Mark and the Buiolder ai Figurative Mark by referring to "Builder ai" in a film entitled "7 of the best no code app builders in 2022" which the second defendant posted to Linkedin. The claimant argued that the defendants had acted as joint tortfeasors in accordance with a common design.
The Counterclaim
The defendants sought the invalidation of the claimant's marks in respect of certain specified goods and services on the ground that the word "Builder" was descriptive or allusive.
The Case Management Conference
His Honour Judge Hacon ordered the following issues to be tried on 23 Nov 2023:
"1. Are the Marks inherently distinctive and/or have they acquired an enhanced distinctive character in the UK by reason of the Claimant's use of them in the course of trade?
2. Do the Marks enjoy a reputation in the UK?
3. Would the Marks be viewed by the average consumer as a family of marks by reason of their common component "Builder" and/or by reason of the Claimant's use of the Marks in the course of trade?
4. Have the Defendants (or either of them) used in the course of trade a sign which is identical or similar to the Marks (or any of them)?
Category 1 alleged infringement
5. Has the Defendants' alleged use of any of the signs identified in paragraphs 11.1 – 11.3 of the APOC, given rise to a likelihood of confusion with the Marks contrary to s.10 (2) TMA?
6. Has the Defendants' alleged use of any of the signs identified in paragraphs 11.1 – 11.3 of the APOC infringed the Marks contrary to s.10 (3) TMA?
7. Have the Defendants (or either of them) used any of the signs identified in paragraphs 11.1 – 11.3 of the APOC with due cause?
Category 2 alleged infringement
8. Was the LinkedIn Post targeted at consumers in the UK?
9. Does the LinkedIn Post constitute comparative advertising?
10. Did the LinkedIn Post contravene regulation 4 of the Business Protection from Misleading Marketing Regulations 2008/1276 and/or infringe s.10 (3) TMA for the reasons identified in paragraph 19.4-6 of the APOC?
11. Has the Defendants' alleged use of any of the signs identified in paragraph 18 of the APOC taken unfair advantage of or caused detriment to the distinctive character or repute of the Marks?
Defence under s.11 (2) (b) and (c) TMA
12. Does the Defendants' alleged use of any of the signs complained of constitute:
1. The use of a sign or indication which is non-distinctive or which concerns the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services pursuant to s.11 (2) (b) TMA;
2. The use of a trade mark for the purpose of identifying or referring to goods or services as those of the proprietor of that trade mark pursuant to s.11 (2) (c) TMA?
13. Was the Defendants' alleged use of any of the signs complained of in accordance with honest and commercial practices?
Joint Tortfeasorship
14. Is D1 liable with D2 as a joint tortfeasor on the basis of a common design?
Defendants' counterclaim
15. Are any of the Marks devoid of inherent distinctive character?
16. Have any of the Marks acquired distinctive character through use?"
2. Do the Marks enjoy a reputation in the UK?
3. Would the Marks be viewed by the average consumer as a family of marks by reason of their common component "Builder" and/or by reason of the Claimant's use of the Marks in the course of trade?
4. Have the Defendants (or either of them) used in the course of trade a sign which is identical or similar to the Marks (or any of them)?
Category 1 alleged infringement
5. Has the Defendants' alleged use of any of the signs identified in paragraphs 11.1 – 11.3 of the APOC, given rise to a likelihood of confusion with the Marks contrary to s.10 (2) TMA?
6. Has the Defendants' alleged use of any of the signs identified in paragraphs 11.1 – 11.3 of the APOC infringed the Marks contrary to s.10 (3) TMA?
7. Have the Defendants (or either of them) used any of the signs identified in paragraphs 11.1 – 11.3 of the APOC with due cause?
Category 2 alleged infringement
8. Was the LinkedIn Post targeted at consumers in the UK?
9. Does the LinkedIn Post constitute comparative advertising?
10. Did the LinkedIn Post contravene regulation 4 of the Business Protection from Misleading Marketing Regulations 2008/1276 and/or infringe s.10 (3) TMA for the reasons identified in paragraph 19.4-6 of the APOC?
11. Has the Defendants' alleged use of any of the signs identified in paragraph 18 of the APOC taken unfair advantage of or caused detriment to the distinctive character or repute of the Marks?
Defence under s.11 (2) (b) and (c) TMA
12. Does the Defendants' alleged use of any of the signs complained of constitute:
1. The use of a sign or indication which is non-distinctive or which concerns the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services pursuant to s.11 (2) (b) TMA;
2. The use of a trade mark for the purpose of identifying or referring to goods or services as those of the proprietor of that trade mark pursuant to s.11 (2) (c) TMA?
13. Was the Defendants' alleged use of any of the signs complained of in accordance with honest and commercial practices?
Joint Tortfeasorship
14. Is D1 liable with D2 as a joint tortfeasor on the basis of a common design?
Defendants' counterclaim
15. Are any of the Marks devoid of inherent distinctive character?
16. Have any of the Marks acquired distinctive character through use?"
If it is not obvious "APOC" stands for amended particulars of claim.
Trial
The action and counterclaim came on for trial before Her Honour Judge Melissa Clarke on 21 and 22 March 2024. She delivered judgment on 19 June 2024. By para [142] of her judgment in Engineer.Ai Global Ltd v Appy Pie Ltd and another [2024] EWHC 1430 (IPEC) (19 June 2024) the learned judge dismissed the claim. In the next paragraph, she allowed the counterclaim.
Relevant Dates
Citing para [179] of Mr Justice Arnold's judgment in London Taxi Corp Ltd (t/a London Taxi Co) v Fraser-Nash Research Ltd [2016] EWHC 52 (Ch), [2016] ETMR 18, Judge Melissa Clarke observed that there was no dispute that the date for determining whether a registered trade mark had acquired a distinctive character for the purposes of s. 47 (1) of the Trade Marks Act 1994 was 2 Feb 2023, the date of the counterclaim for the mark's invalidity.
Equally, there was no dispute that the date for assessing inherent and acquired distinctiveness for determining whether a registered mark had been validly registered was the date on which the application for the registration of the mark had been filed. That was 2 Nov 2020 in the cases of the Builder Home Mark and the Builder Word Mark, and 17 Dec 2021 for the remaining marks. Evidence on those issues after those dates was inadmissible unless it supported, or enabled the court to draw conclusions about, the position as at the filing date as in paras [39] to [40] of Case C-192/03 Alcon Inc v OHIM [2004] ECR 1-8993.
The relevant date for assessing whether a mark had a reputation was when the alleged infringement began. As no date had been pleaded by the claimant for the first use by the defendants of the word "Builder" in relation to their products, that date must have been 17 Oct 2022, the date of the claim form. As for the LinkedIn post, that date must have been sometime in July 2022.
Family of Marks
"[234]. Family of marks. Where it is shown that the trade mark proprietor has used a "family" of trade marks with a common feature, and a third party uses a sign which shares that common feature, this can support the existence of a likelihood of confusion. As the Court of First Instance (as it then was) explained in Case T- 287/06 Miguel Torres v Office for Harmonisation in the Internal Market [2008] ECR II-3817:
'[79] As regards the applicant's argument that its earlier marks constitute a 'family of marks' or a 'series of marks', which can increase the likelihood of confusion with the mark applied for, such a possibility was recognised in BAINBRIDGE and confirmed in Case C-234/06 P Il Ponte Finanziaria [2007] ECR I-7333.
[80] According to that case law, there can be said to be a 'series or a 'family' of marks when either those earlier marks reproduce in full the same distinctive element with the addition of a graphic or word element differentiating them from one another, or when they are characterised by the repetition of the same prefix or suffix taken from an original mark (BAINBRIDGE, paragraph [123]). In such circumstances, a likelihood of confusion may be created by the possibility of association between the trade mark applied for and the earlier marks forming part of the series where the trade mark applied for displays such similarities to those marks as might lead the consumer to believe that it forms part of that same series and therefore that the goods covered by it have the same commercial origin as those covered by the earlier marks, or a related origin. Such a likelihood of association between the trade mark applied for and the earlier marks in a series, which could give rise to confusion as to the commercial origin of the goods identified by the signs at issue, may exist even where the comparison between the trade mark applied for and the earlier marks, each taken individually, does not prove the existence of a likelihood of direct confusion (BAINBRIDGE, paragraph [124]). When there is a 'family' or a 'series' of trade marks, the likelihood of confusion results more specifically from the possibility that the consumer may be mistaken as to the provenance or origin of goods or services covered by the trade mark applied for and considers erroneously that that trade mark is part of that family or series of marks (Il Ponte Finanziaria, paragraph [63]).
[81] However, according to the above case law, the likelihood of confusion attaching to the existence of a family of earlier marks can be pleaded only if both of two conditions are satisfied. First, the earlier marks forming part of the 'family' or 'series' must be present on the market. Secondly, the trade mark applied for must not only be similar to the marks belonging to the series, but also display characteristics capable of associating it with the series. That might not be the case, for example, where the element common to the earlier serial marks is used in the trade mark applied for either in a different position from that in which it usually appears in the marks belonging to the series or with a different semantic content (BAINBRIDGE, paragraphs [125] to [127]).'
[235] I do not understand it to be in dispute that it is not necessary for this purpose for all of the trade marks in the family to have been registered at the relevant date, provided that at least one was registered, and a number were in use."
The claimant also referred Judge Melissa Clarke to Sir Anthony Mann's consideration of families of marks at para [135] of his judgment in EasyGroup Ltd v Easy Live (Services) Ltd [2022] EWHC 3327 (Ch), [2023] E.T.M.R. 12:
"This is a point capable of bearing on issues of confusion and links (under infringement) and misrepresentation (under passing off). Where a proprietor establishes that there is a family of marks, and the challenged sign reproduces some of the elements of the "family", then the possibility of confusion is enhanced…".
"This is a point capable of bearing on issues of confusion and links (under infringement) and misrepresentation (under passing off). Where a proprietor establishes that there is a family of marks, and the challenged sign reproduces some of the elements of the "family", then the possibility of confusion is enhanced…".
The Claimant also relied on T-194/03 BAINBRIDGE ECLI: EU: T:2006:65 and R172/2013-2 CITY INDEX v CITI for the proposition that the use of the word "BUILDER" by the defendants in conjunction with one or more descriptive words in the field of computer programming, software or hardware would be perceived by the relevant public as one of the family of marks owned by the claimant.
Distinctiveness
The learned judge referred to the following propositions on distinctiveness that had been set out by Mr Justice Arnold in Société des Produits Nestlé SA v Cadbury UK Ltd [2014] EWHC 16 (Ch); [2014] ETMR 17 ("Kit Kat I"):
[40] …First, for a trade mark to possess distinctive character, it must serve to identify the goods or services in respect of which registration is applied for as originating from a particular undertaking and thus to distinguish the goods or services from those of other undertakings: Windsurfing (cited above) at [46], Philips v Remington (cited above) at [35], Joined Cases C-53/01 to C-55/01 Linde AG, Winward Industries Inc and Rado Uhren AG [2003] ECR I-3161 at [40], [47], Case C-218/01 Henkel KGaA v Deutsches Patent- und Markenamt [2004] ECR I-1725 at [48], Joined Cases C-456/01P and C-457/O1P Henkel KGaA v Office for Harmonisation in the Internal Market [2004] ECR I-5089 at [34], Joined Cases C-468/01P to C-472/01P Procter & Gamble Co v Office for Harmonisation in the Internal Market [2004] ECR I-5141 at [32], Case C-136/02P Mag Instrument Inc v Office for Harmonisation in the Internal Market [2004] ECR I-9165 at [29] and Case 64/02P Office for Harmonisation in the Internal Market v Erpo Möbelwerk GbmH [2004] ECR I-10031 at [33].
[41] Secondly, the distinctive character of a trade mark must be assessed by reference to (i) the goods or services in respect of which registration is applied for and (ii) the perception of the average consumer of those goods or services, who is deemed to be reasonably well-informed and reasonably observant and circumspect: Philips v Remington at [59], [63], Linde at [41], Case C-104/01 Libertel Group BV v Benelux-Merkenbureau [2003] ECR I-3793 at [62]-[63], Henkel v Deutsches Patent- und Markenamt at [50], Case C-363/99 Koninklijke KPN Nederland NV v Benelux-Merkenbureau [2004] ECR I-1619 at [34], Procter & Gamble v OHIM at [33], Henkel v OHIM at [35], Case C-445/02P Glaverbel v Office for Harmonisation in the Internal Market [2004] ECR I-6267 at [20], Case C-404/02 Nichols plc v Registrar of Trade Marks [2004] ECR I-8499 at [23], Nestlé v Mars (cited above) at [25], Case C-173/04P Deutsche SiSi-Werke GmbH & Co. Betriebs KG v Office for Harmonisation in the Internal Market [2006] ECR I-551 at [25] and C-24/05P August Storck KG v Office for Harmonisation in the Internal Market (Storck I) [2006] ECR I-5677 at [23].
[42] Thirdly, the criteria for assessment of distinctive character are the same for all categories of trade marks, but nevertheless the perception of the relevant public is not the same for all categories of trade marks and it may therefore be more difficult to establish distinctive character in relation to some categories (such as shapes, colours, personal names, advertising slogans and surface treatments) than others: Linde at [42], [48], Libertel v Benelux-Merkenbureau at [65], Henkel v Deutsches Patent- und Markenamt at [52], Procter & Gamble v OHIM at [36], Henkel v OHIM at [38], Glaverbel v OHIM at [21]-[23], Nichols at [24]-[28], Mag v OHIM at [30], OHIM v Erpo Möbelwerk at [34]-[35], Case C-447/02 KWS Saat AG v Office for Harmonisation in the Internal Market [2004] ECR I-10107 at [78], Deutsche SiSi-Werke v OHIM at [27]-[28] and Storck I at [24]-[25].
[43] Fourthly, in assessing whether a trade mark has acquired a distinctive character the competent authority must make an overall assessment of the relevant evidence, which in addition to the nature of the mark may include (i) the market share held by goods bearing the mark, (ii) how intensive, geographically widespread and long-standing the use of the mark has been, (iii) the amount invested by the proprietor in promoting the mark, (iv) the proportion of the relevant class of persons who, because of the mark, identify the goods or services as emanating from the proprietor, (v) evidence from trade and professional associations and (vi) (where the competent authority has particular difficulty in assessing the distinctive character) an opinion poll. If the relevant class of persons, or at least a significant proportion of them, identifies goods or services as originating from a particular undertaking because of the trade mark, it has acquired a distinctive character: Windsurfing Chiemsee v Huber at [49]-[53], Case C-342/97 Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV [1999] ECR I-1318 at [23], Philips v Remington at [60]-[62], Libertel v Benelux-Merkenbureau at [67], Nestlé v Mars at [31] and C-25/05P August Storck KG v Office for Harmonisation in the Internal Market (Storck II) [2006] ECR I-5719 at [75].
[44] Fifthly, with regard to the acquisition of distinctive character through use, the identification by the relevant class of persons of the product or service as originating from a given undertaking must be as a result of the use of the mark as a trade mark. The expression 'use of the mark as a trade mark' refers solely to use of the mark for the purposes of the identification, by the relevant class of persons, of the product as originating from a given undertaking: Philips v Remington at [64], Nestlé v Mars at [26], [29] and Storck I at [61].
[45] Sixthly, a trade mark may acquire a distinctive character in consequence of the use of that mark as part or in conjunction with another trade mark (which may itself be a registered trade mark): Nestlé v Mars at [27]-[30], [32]."
Her Honour cited para [52] of Lord Justice Kitchin's judgment in Société des Produits Nestlé SA v Cadbury UK Ltd. [2017] EWCA Civ 358 which upheld Mr Justice Arnold's judgment in Société des Produits Nestlé SA v Cadbury UK Ltd [2016] EWHC 50 (Ch)) ("Kit Kat II") in which he interpreted the answer of the Court of Justice of the European Union to the question that he had referred to it on what an applicant for registration of a trade mark needs to prove in order to establish that the mark has acquired a distinctive character:
She also cited para [102] of Lord Justice Floyd's judgment on the same issue:
"[102] The test for whether a mark which has no inherent distinctiveness has nevertheless acquired a distinctive character must now be regarded as settled. It is that a significant proportion of the relevant class of consumers perceive goods designated by the mark applied for as originating from a particular undertaking. It is a requirement of Article 3(3) of the Directive that there has been use of the mark applied for before the date of application. But there is no requirement that the use should be of the mark on its own: the use may be in conjunction with another mark or marks."
"[102] The test for whether a mark which has no inherent distinctiveness has nevertheless acquired a distinctive character must now be regarded as settled. It is that a significant proportion of the relevant class of consumers perceive goods designated by the mark applied for as originating from a particular undertaking. It is a requirement of Article 3(3) of the Directive that there has been use of the mark applied for before the date of application. But there is no requirement that the use should be of the mark on its own: the use may be in conjunction with another mark or marks."
Reputation
In para [35] of her judgment, Judge Melissa Clarke said that the relevant factors for assessing whether a mark possesses a reputation include:
(i) market share
(ii) intensity, geographical extent, and duration of use of the mark; and
(iii) size of investment in the mark.
Giving the example of T-47/06 Nasdaq EU: T:2007:131 the judge added that reputation is a question of fact to be determined in each case.
However, she accepted the defendants' submission that although distinctiveness and reputation are, strictly speaking, separate concepts, it is hard to conceive of circumstances in which a party that failed to show any distinctiveness can nevertheless 'get home' on reputation. That is because reputation requires a certain degree of knowledge of the earlier mark among the public as in C- 375/97 Chevy EU: C:1999:408, at [23].
InfringementHowever, she accepted the defendants' submission that although distinctiveness and reputation are, strictly speaking, separate concepts, it is hard to conceive of circumstances in which a party that failed to show any distinctiveness can nevertheless 'get home' on reputation. That is because reputation requires a certain degree of knowledge of the earlier mark among the public as in C- 375/97 Chevy EU: C:1999:408, at [23].
Her Honour reproduced s.10 of the Trade Marks Act 1994 and reg 4 of The Business Protection from Misleading Marketing Regulations 2008 (SI 2008 No 1276) in her judgment.
Invalidity
She also reproduced s.47 (1) of the Act and the following paragraphs of s.3 (1):
"3. Absolute grounds for refusal of registration
(1) The following shall not be registered—
(a) …
(b) trade marks which are devoid of any distinctive character,
(c) trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services,
(d) trade marks which consist exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade:
Provided that a trade mark shall not be refused registration by virtue of paragraph (b), (c) or (d) above if, before the date of application for registration, it has in fact acquired a distinctive character as a result of the use made of it."
As the defendants had characterized s.3 (1) (b) as a backstop, the judge focused on s.3 (1) (c) and (d). Referring to para [37] of C-51/10 P Agencja Wydawnicza Technopol v OHIM EU: C:2011:139; [2011] ETMR 34 she remarked that "[t]he underlying interest protected by s.3 (1) (c) TMA is that of ensuring that descriptive signs relating to one or more characteristics of the goods or services in respect of which registration as a mark is sought may be freely used by all traders offering such goods or services." Turning to r s.3 (1) (d) she noted that the provisions of s.3 (1) (d) of the Act overlap with s.3 (1) (c) to a certain extent and that they are directed to preventing the registration of those signs or indications which honest traders customarily use in trade. She added that the principles applicable to s.3 (1) (d) are now settled by a range of cases such as Case C-517/99 Merz & Krell [2001] ECR I-6959 at [21] to [25] and [35] to [41].
Targeting of Websites
The judge directed herself that the Supreme Court in Lifestyle Equities CV v Amazon UK Services [2024] UKSC 8 had recently restated the law on targeting for trade mark infringement purposes. She noted that it had confirmed at [27] that the question of whether an advertisement or offer for sale is targeted at consumers in the UK is to be considered from the perspective of the average consumer. She added at [28] that the question is whether the average consumer would consider the website to be directed at him or her. That will require the judge to carry out a multifactorial assessment of all the circumstances, which include "the appearance of the website, how it responds to the presence of the consumer, whether it is possible actually to buy goods and have them delivered, and how that is done."
Those circumstances may also include a range of other facts and matters such as, but by no means limited to those identified by the Court of Appeal in Merck KGaA v Merck Sharp & Dohme Corpn [2017] EWCA Civ 1834, [2018] ETMR 10] at para [170]. All of those facts and matters may assist the court in assessing the reaction of the average consumer and so answer the question of whether the accused advertisements are targeted at consumers in the UK. The facts and matters in Merck included the appearance and the content of the website, which were said to be of particular significance, including whether it is possible to buy goods or services from the website, the nature and size of the trader's business, the characteristics of the goods or services in issue and the number of visits made to the website by consumers in the UK.
Those circumstances may also include a range of other facts and matters such as, but by no means limited to those identified by the Court of Appeal in Merck KGaA v Merck Sharp & Dohme Corpn [2017] EWCA Civ 1834, [2018] ETMR 10] at para [170]. All of those facts and matters may assist the court in assessing the reaction of the average consumer and so answer the question of whether the accused advertisements are targeted at consumers in the UK. The facts and matters in Merck included the appearance and the content of the website, which were said to be of particular significance, including whether it is possible to buy goods or services from the website, the nature and size of the trader's business, the characteristics of the goods or services in issue and the number of visits made to the website by consumers in the UK.
Joint Tortfeasorhip
She also directed herself that the Supreme Court had clarified the law on joint tortfeasorship in Lifestyle Equities CV and another v Ahmed and another [2024] UKSC 17. It held that for a person to be held jointly liable with a tortfeasor for a tort, he or she must have knowledge of the essential facts that make the acts wrongful, whether or not the primary tort in question (such as trade mark infringement as it was in that case) is a strict liability offence and whether or not the accessory liability arises from procuring a tort or by a common design. As Lord Leggatt explained at [137]:
"Although procuring a tort and assisting another to commit a tort pursuant to a common design are distinct bases for imposing accessory liability, they must operate consistently with each other and such that the law of accessory liability in tort is coherent. Considerations of principle, authority and analogy with principles of accessory liability in other areas of private law all support the conclusion that knowledge of the essential features of the tort is necessary to justify imposing joint liability on someone who has not actually committed the tort. This is so even where, as in the case of infringement of intellectual property rights, the tort does not itself require such knowledge."
Average Consumer
As the question of a mark's inherent distinctiveness has to be considered from the perspective of an average consumer, the court's first task was to identify that person. The parties agreed that he or she would be "anyone who wishes to create an app without coding, whether businesses, other organisations or individuals. Those may be organisations of any size and individuals of any age." The judge accepted the defendants' submission that "there are no special features of the average consumer to weigh in this case, save that the level of attention would be higher than average given that the consumer is selecting a product that will enable them to build something of value."
Issue 15: Are any of the Marks devoid of inherent distinctive character?
Issue 16: Have any of the Marks acquired distinctive character through use?"
Judge Melissa Clarke decided to take the above issues together.
She found that 'Builder' and 'builder' were descriptive terms that had been used widely and interchangeably in the software industry as a tool to enable the creation or development of software, whether used with a further descriptor or not, since at least 2013. She was satisfied that the average consumer, who was deemed to be well-informed reasonably observant and circumspect, would have known that. Such a consumer would immediately perceive the Builder Word Mark as descriptive. As such it was inherently unable to identify the goods and services for which the Builder Word Mark had been registered as originating from the Claimant and so distinguish those goods or services from the goods or services of other undertakings, as at the filing date.
She found that 'Builder' and 'builder' were descriptive terms that had been used widely and interchangeably in the software industry as a tool to enable the creation or development of software, whether used with a further descriptor or not, since at least 2013. She was satisfied that the average consumer, who was deemed to be well-informed reasonably observant and circumspect, would have known that. Such a consumer would immediately perceive the Builder Word Mark as descriptive. As such it was inherently unable to identify the goods and services for which the Builder Word Mark had been registered as originating from the Claimant and so distinguish those goods or services from the goods or services of other undertakings, as at the filing date.
The judge came to much the same conclusion with respect to the other defined marks.
The claimant submitted that the marks had acquired distinctiveness through sales and advertising even if they lacked inherent distinctiveness. Her Honour considered the evidence in para [132]:
"Turning to my overall assessment of the relevant evidence, then, and looking at the categories of evidence set out at [43] of Kit Kat 1 so far as they are relevant:
i) I have no reliable evidence of the UK sales or market share held by goods or services bearing any of the Marks. I do have some evidence about the very sizeable UK market for no-code app development tools from Gartner, however, as previously described.
ii) I have very little reliable evidence of the amount invested by the Claimant in promoting any of the Marks, save that I am satisfied I can rely on the figures provided in respect of the Platinum Jubilee campaign and Rugby League campaign featuring the Builder.ai Figurative Mark in 2022. Those come to around £165,000.
iii) I have limited evidence about how intensive and geographically widespread the use of any of the Marks has been in the UK because the Claimant has put forward so little evidence of metrics relating to the use relied on
iv) I have some evidence of how long-standing the use of the Marks is, inasmuch as the Claimant only started trading in the UK in 2019.
v) I have very little evidence about the proportion of the relevant class of persons who, because of any of the Marks, identify the goods and services as coming from the Claimant, save that I have some evidence that between 2019 and the relevant date around 3800 Google searches on 'builder.ai' have been carried out per year in the UK. That figure has likely risen somewhat in the first two months of 2023. However because that figure has otherwise remained static since 2019, the first year that the Claimant was trading in the UK, it does not provide any significant support for the acquired distinctiveness of the Builder.ai Figurative Mark or the Builder.ai Word Mark, in my judgment.
vi) Of the awards I have been informed about, the only one which I am satisfied on the evidence before me relates to the UK within the relevant period is 'Scale Up of the Year' at the 2022 Europas Hottest Tech Start Up Awards for UK and Europe. I have not been provided with any evidence by the Claimant about how that was promoted or what effect, if any, it had on sales or engagement with consumers."
"Turning to my overall assessment of the relevant evidence, then, and looking at the categories of evidence set out at [43] of Kit Kat 1 so far as they are relevant:
i) I have no reliable evidence of the UK sales or market share held by goods or services bearing any of the Marks. I do have some evidence about the very sizeable UK market for no-code app development tools from Gartner, however, as previously described.
ii) I have very little reliable evidence of the amount invested by the Claimant in promoting any of the Marks, save that I am satisfied I can rely on the figures provided in respect of the Platinum Jubilee campaign and Rugby League campaign featuring the Builder.ai Figurative Mark in 2022. Those come to around £165,000.
iii) I have limited evidence about how intensive and geographically widespread the use of any of the Marks has been in the UK because the Claimant has put forward so little evidence of metrics relating to the use relied on
iv) I have some evidence of how long-standing the use of the Marks is, inasmuch as the Claimant only started trading in the UK in 2019.
v) I have very little evidence about the proportion of the relevant class of persons who, because of any of the Marks, identify the goods and services as coming from the Claimant, save that I have some evidence that between 2019 and the relevant date around 3800 Google searches on 'builder.ai' have been carried out per year in the UK. That figure has likely risen somewhat in the first two months of 2023. However because that figure has otherwise remained static since 2019, the first year that the Claimant was trading in the UK, it does not provide any significant support for the acquired distinctiveness of the Builder.ai Figurative Mark or the Builder.ai Word Mark, in my judgment.
vi) Of the awards I have been informed about, the only one which I am satisfied on the evidence before me relates to the UK within the relevant period is 'Scale Up of the Year' at the 2022 Europas Hottest Tech Start Up Awards for UK and Europe. I have not been provided with any evidence by the Claimant about how that was promoted or what effect, if any, it had on sales or engagement with consumers."
She concluded that none of the marks had acquired distinctiveness. The evidence was simply lacking. The effect of that finding was that all of the marks were invalid for lack of distinctive character pursuant to s.3 (1) (c). The Builder House Mark and Builder Word Mark were also invalid to the same extent pursuant to s.3 (1) (d).
Having found that the marks were not inherently distinctive and in view of the dicta in Chevy that reputation requires a certain degree of knowledge of the earlier mark the judge was not persuaded that the marks or any of them had a reputation with a significant part of the British public or an enhanced distinctive character capable of impacting on the assessment of infringement. That was because she had seen no reliable evidence on market share, very little reliable evidence on the size of investment in the marks in the UK, and insufficient information on the intensity and geographical extent of the use of the marks.
As the judge had found that the word "Builder" was not distinctive, it followed that there could be no family of marks,
Whether there had been any Infringement
As the marks lacked inherent or acquired distinctively invalid and had been partially revoked, the claim for infringement through the use of the word "Builder" in relation to the defendants' products had to fail. The claim in respect of the LinkedIn post failed because it was not targeted at the average consumer in the UK. The judge's reasons were set out as follows in para [139]:
"i) the LinkedIn Post was not hosted on the Appy Pie Website or another website from which it was possible actually to buy goods and have them delivered. It was on D2's LinkedIn page;
ii) there was no clear expression of an intention to solicit custom in the UK of the type the Court of Appeal described at paragraph 170 of Merck, such as including the UK in a list or a map;
iii) I am satisfied that the fact that the LinkedIn Post is in English, without more, would be considered by the average consumer to be insufficient evidence that it was targeted to him in the UK, English being a main language of business in India where D2 is based and also the most widely spoken language in the world;
iv) in my judgment, the average consumer would not consider the fact that one of the seven prices in the LinkedIn Post was in pounds sterling was directed at him in the UK, as the other six of the seven prices were in US dollars; and
v) I am satisfied that such a small percentage of D2's LinkedIn followers are from the UK that the average consumer would consider the LinkedIn Post to be a very poor way to target consumers such as him in the UK. Of the very small numbers who viewed it in the UK, given the Defendants' data showing access from the Claimant, the Defendants and their solicitors, it seems entirely likely that the average consumer would consider that very few or none were genuine consumers unconnected with either party or this litigation."
"i) the LinkedIn Post was not hosted on the Appy Pie Website or another website from which it was possible actually to buy goods and have them delivered. It was on D2's LinkedIn page;
ii) there was no clear expression of an intention to solicit custom in the UK of the type the Court of Appeal described at paragraph 170 of Merck, such as including the UK in a list or a map;
iii) I am satisfied that the fact that the LinkedIn Post is in English, without more, would be considered by the average consumer to be insufficient evidence that it was targeted to him in the UK, English being a main language of business in India where D2 is based and also the most widely spoken language in the world;
iv) in my judgment, the average consumer would not consider the fact that one of the seven prices in the LinkedIn Post was in pounds sterling was directed at him in the UK, as the other six of the seven prices were in US dollars; and
v) I am satisfied that such a small percentage of D2's LinkedIn followers are from the UK that the average consumer would consider the LinkedIn Post to be a very poor way to target consumers such as him in the UK. Of the very small numbers who viewed it in the UK, given the Defendants' data showing access from the Claimant, the Defendants and their solicitors, it seems entirely likely that the average consumer would consider that very few or none were genuine consumers unconnected with either party or this litigation."
Issue 12 - Whether the Defendants have satisfied the Court of a s. 11 (2) (b) Defence
As the court was satisfied that the second defendant's use of the word "Builder" was descriptive, it had a defence under s. 11 (2) (b) of the Act.
Other Issues
In view of the above findings, the judge did not have to consider the remaining issues.
Comment
As is the case with the judgments of this judge, this was closely reasoned and thoroughly documented. There is guidance on identifying the average consumer, determining the existence of a family of marks, acquired and inherent distinctiveness, targeting of websites, absolute grounds for refusal and even accessory liability though it was not a factor of the decision in this case. Anyone wishing to discuss this judgment can call me on 07966 373922 during UK office hours or send me a message through my contact page,
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