In a recent Court of Appeal judgment, overturning the High Court's decision, TVIS Limited, trading as Vetsure, succeeded in a trade mark infringement and passing off action against another pet insurance provider, Petsure.
The judgment sheds light on important issues, including the value of confusion evidence, how two descriptive words can be combined to make a non-descriptive mark, and whether it is possible for a trade mark to have a reputation but no acquired distinctive character.
The decision is also a reminder of the extent to which the Court of Appeal is prepared to make entirely different factual findings to a trial judge, if the door is opened for it to do so in the form of some legal error in the appealed judgment.
Background
The Claimant, Vetsure, has operated in the pet insurance market since 2009. It registered various UK trade marks in 2010, including one for VETSURE covering, amongst other things, "pet insurance" in class 36.
The Defendant companies had operated in the travel insurance industry since 2004. In 2020, they moved into pet insurance under the mark Petsure, registering a UK trade mark for the mark, also covering "pet insurance".
Vetsure issued proceedings in the High Court against Petsure for trade mark infringement and passing off, and to invalidate the PETSURE mark on the basis of its prior rights in a confusingly similar mark, Vetsure.
High Court Decision
The trial judge, Deputy High Court Judge Mr Ian Karet, dismissed all of Vetsure's claims.
He found that there was no likelihood of confusion between the VETSURE and PETSURE marks, and so there was no trade mark infringement or passing off. His reasons, in summary, were that:
- Both marks were descriptive of pet insurance, which limited the ambit of protection for the VETSURE trade mark.
- Despite this, the marks were conceptually different.
- The VETSURE mark, whilst having a reputation (i.e. a substantial number of people connected it with its owner), had not acquired distinctive character.
- While the trial judge considered 41 different instances of alleged confusion, he found that only one of these showed genuine confusion between the two marks; the others were merely "administrative errors" or "mistakes" on the part of the allegedly confused people.
Court of Appeal Decision
The Court of Appeal overturned the High Court decision in its entirety, finding that the trial judge had made a number of errors of principle. These errors of principle opened the door to the Court of Appeal to reconsider the confusion evidence afresh – and reach the opposite conclusion on it to the trial judge.
Conceptual similarity
The trial judge had wrongly found that the VETSURE mark and 'Petsure' sign were conceptually different. Arnold LJ, giving the leading judgment, identified the following errors in the trial judge's approach:
- The assessment of conceptual similarity between the marks had been wrongly conflated with the assessment of the VETSURE mark's distinctive character.
- Whilst the trial judge found that the two marks were conceptually different, he had not articulated what that conceptual difference was.
- On the contrary, Arnold LJ held that there was "considerable conceptual similarity" between the marks, as they would both be understood to describe insurance for pets, including insurance for veterinary services.
- It was wrong to require a finding of conceptual similarity for there to be a likelihood of confusion. While the similarity of the marks is to be assessed visually, aurally and conceptually, it is not necessary for them to be confusingly similar in all three of these respects, i.e., even if the marks were conceptually different (which the Court of Appeal held that they were not), they could still be confusingly similar.
Distinctive character
The Court of Appeal found that the trial judge had erred in the following respects in finding that the VETSURE mark was descriptive and therefore lacked distinctive character:
- He wrongly held that, as the mark comprised two descriptive elements, i.e. "VET" and "SURE", the combination of those marks into "VETSURE" was itself descriptive. In fact, the combined term was an invented "portmanteau" word which, although allusive to pet insurance, did not describe it.
- He failed to make a clear finding on whether the VETSURE mark had inherent (as opposed to acquired) distinctive character. He said it was "descriptive", implying it had no distinctive character, whilst elsewhere saying it "does not have a highly distinctive character", leaving open the possibility that it had some distinctive character. The Court of Appeal held that it had "a low-to-medium level of inherent distinctive character".
- His finding that the VETSURE mark had no acquired distinctive character (i.e. it had not built up distinctive character through use) was incompatible with his finding that it had built up a reputation through its use. Whilst reputation and acquired distinctive character are not the same thing, it was impossible for a mark to have obtained the former without at least some of the latter.
The pet insurance market had many PET- brands, but only one VET- brand and one -SURE brand. The Court of Appeal said this led to the conclusion that the average consumer of pet insurance would not be alert to the difference between VETSURE and PETSURE (something borne out by the evidence of confusion – see below).
Evidence of confusion and administrative errors
On re-examining the confusion evidence of which the trial judge had been largely dismissive, the Court of Appeal decided that it did evidence "relevant confusion", which was probative of a likelihood of confusion. It was wrong of the trial judge to have decided that the volume of confusion instances was too small, particularly given that both brands were relatively small players in the pet insurance market, the PETSURE sign had been used for a little over two years, and Petsure had not searched the records of its claim handlers' for confusion. Arnold LJ adopted the submissions of Vetsure's counsel (Benet Brandreth KC), that:
as … the judge had noted himself…the parties were small players in the market for pet insurance. … that should have indicated something to him, namely that the presence of any cross-confection of this kind was not simply the result of the ubiquity of either player in the market. These were two relatively small ships in a vast ocean, and yet instance after instance of them crashing into each other.
Comment
The Court of Appeal's decision is completely at odds with the first instance judgment. It did not merely overturn that judgment on one point of law but identified numerous errors within it.
The extent to which Arnold LJ was prepared to review all of the confusion evidence considered by the trial judge, and reach an entirely different conclusion on what is a factual assessment (i.e. are people being confused by the PETSURE mark into assuming a connection with VETSURE?), is striking. It is a reminder that, once a key (in the form of a legal error in the first instance judgment) has been found to unlock the door, the Court of Appeal will be prepared to undertake a complete reassessment of the case.
The decision is also something of a shot in the arm for the utility of confusion evidence. There has been a tendency in recent years for judgments in trade mark cases to dismiss confusion evidence, where it has been adduced, as insufficient to show a likelihood of confusion, whilst, in other cases where no confusion evidence at all has been produced, to excuse this on the basis that such evidence is hard to find. Had the first instance judgment stood, claimants in trade mark cases would have had to seriously consider whether they are better off not looking for confusion evidence at all; the Court of Appeal's decision swings the barometer back in favour of it.
Finally, the decision is a reminder that two essentially descriptive words (VET and SURE) can be combined together to form an invented "portmanteau" mark which, while it might be allusive of the goods/services for which it is used, may no longer be purely descriptive.