Trade Mark Infringement and Passing Off

Sky v SkyKick: High Court finds infringement of Sky's mark

In January 2020, the CJEU issued its decision in Sky v SkyKick providing guidance on a number of issues relating to the scope of protection of registered trade marks.

The CJEU's findings included that:

1. It is not possible to challenge a registered EU or national trade mark for lack of clarity or precision. Terms like 'computer software' in a trade mark specification cannot therefore be challenged on this ground.
2. There is no per se rule that a lack of intention to use a mark amounts to bad faith. Bad faith may however be established where there is "objective, relevant and consistent indicia" which tends to show that the trade mark applicant intended, when filing its application, to undermine, in a manner inconsistent with honest practices, third parties' interests or to obtain, without targeting a specific party, an exclusive right for purposes other than those falling within the function of a trade mark. This requires an assessment of the facts in each case, but an applicant will not be acting in bad faith simply because it had no economic activity corresponding to the goods/services applied for when filing the application.
3. Where bad faith is established, it applies only to those goods/services to which the finding attaches, and not all the goods and services of the mark. 

When the case returned to the High Court to apply the CJEU's decision, the Court determined that, whilst certain aspects of Sky's specification should be narrowed down, SkyKick had infringed Sky's trade mark. The case will be heard by the Court of Appeal in May 2021.

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Mishcon de Reya act for Sky in these proceedings

High Court finds trade mark infringement through use of 'Merck'

In a long-running dispute between Merck KGaA (Merck Global) and US companies Merck Sharp & Dohme Corporation and Merck & Co (together Merck US), the High Court decided that various uses of 'Merck' in the UK by Merck US, amounted to trade mark infringement. This followed an earlier finding that Merck US had breached a co-existence agreement entered into between the parties.

The case is a paradigm example of the challenges for co-existence arrangements presented by business restructurings and developing global business models, facilitated by the internet, which may destroy the 'equilibrium' between co-existing parties. Merck US has never sold nor supplied goods or services to customers in the UK under or by reference to the 'Merck' sign (goods and services are sold/supplied in the UK by Merck Sharp & Dohme (MSD) – Merck US does business as MSD outside of the US and Canada). Instead, the complaint focused on Merck US' use of 'Merck' in promotional and informational materials, and in the course of general commercial activities, in the UK.

The Court found a policy by Merck US to bring the 'Merck' sign before the UK market, leading to dilution of the impact of Merck Global's exclusive use of its 'Merck' mark in the UK. This included specific Merck branded websites (in part targeted at the UK), increased promotion of the merck.com domain name in the UK, use of @merck.com email addresses by UK employees, and the use of 'Merck' in social media content. However, the Court also identified a number of uses of 'Merck' that did not infringe as they were use of the entity name, rather than as a trade mark.

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Mobile app branding: the importance of socially distancing yourself from the competition

In one of the first decisions handed down remotely in 2020 (Planetart v Photobox), the High Court provided important guidance on trade mark infringement and passing off in the context of the competitive market of mobile apps. The dispute concerned PlanetArt's FreePrints app trade mark which the Court found was infringed by Photobox's app icon. It is clear from this decision that small differences in appearance between an app icon and a competitor's may be insufficient to prevent infringement. The Court will take into account the "impact as a whole" of the elements of the app icon design to judge whether an infringement has occurred.

However, the decision also demonstrates the challenges of enforcing a descriptive trade mark, with PlanetArt's wider claim for infringement arising from the Defendant's use of the words "Free Prints", and the claim for passing off, both failing.

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High Court finds infringement of EAGLE RARE Bourbon trade mark by AMERICAN EAGLE

The luxury bourbon whiskey market provided the backdrop for this trade mark dispute (Sazerac Brands v Halewood), in which the Defendants' use of 'American Eagle' was found to infringe the Claimants' mark EAGLE RARE. With a particular focus on premium products in a market segment, the judgment provides useful insight into the Court's determination of key issues such as the average consumer and the nature of the relevant market.

In particular, the decision highlights two important elements of the bourbon market: the circumstances in which it is purchased and market trends. The environment in which a purchase is made will affect the degree of attentiveness and therefore the likelihood of confusion between marks. In the bourbon market, purchase in a retail store is likely to be under some time pressure or other constraints, whilst on-licence (pub/bar) purchases may be in noisier environments where the visual appearance of the name is often obscured. Secondly, there is a trend in the bourbon and whisky market to have different expressions of brands under the same core branding (e.g. 'special releases' or 'single cask'), and also to release products with different names that may allude directly/indirectly to a brand, including plays on the brand name. These factors, combined with the distinctive 'Eagle' component of both marks, increased the likelihood of the average consumer believing the goods originated from the same or economically linked undertakings.

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National Governing Body for gymnastics successful in trade mark infringement and passing off claim

In British Amateur Gymnastics Association v UK Gymnastics Limited & ors, the Intellectual Property Enterprise Court (IPEC) found trade mark infringement and passing off in favour of the Claimant, the National Governing Body (NGB) for UK amateur gymnastics. The claim was brought against Defendants offering services to gymnasts, including putting on competitions, under the sign 'UK Gymnastics'. The case involved the following logos, with associated get-up:

The Defendant had claimed that it was an alternative national governing body, though the Court was satisfied that the Claimant was the only NGB for gymnastics in the UK, and the only recognised NGB. Whilst there was little evidence of actual confusion, the Court found a likelihood of confusion as the average consumer – child gymnasts, their parents and spectators at sporting events – who saw the Defendants' word sign and logos would mistakenly take them for that of the only NGB for UK gymnastics, because there was only one such body. As part of the overall assessment, the Court found that the services were identical or highly similar; there was a medium degree of similarity between the Claimant's marks and the Defendants' word sign (and a low degree of similarity for the Defendants' logos); and the Claimant's marks were highly distinctive.

Infringement was also established on the basis of detriment to the distinctive character and reputation of the trade marks, and the taking of unfair advantage, as well as passing off.

High Court finds infringement of Red Bull's trade marks by 'Big Horn' energy drink

In Red Bull v Big Horn, the High Court found in favour of Red Bull in trade mark infringement proceedings against an importer and distributor of energy drinks and bottled water using signs similar to Red Bull's EU trade marks. The relevant logos were as follows:

Claimant's Mark and description	Disputed Big Horn signs
Double Bull
Blue/Silver Parallelogram with Sun Device
Single Bull

The Deputy Judge concluded that Red Bull's marks and the Defendant's signs did have visual and conceptual similarity. Given the global reputation and highly distinctive character of Red Bull's marks, the similarity of signs, and identicality of goods, the signs would cause the average consumer to link them with Red Bull's trade marks. Further, the use of the Defendant's signs took unfair advantage of the distinctive character and reputation of those trade marks and there was no due cause. The Deputy Judge noted that the signs had evidently been designed to enable free-riding on Red Bull's reputation and to benefit from its very considerable marketing efforts.

However, if it had been necessary to decide this point, the Deputy Judge would not have concluded that the signs gave rise to a likelihood of confusion. Even taking into account the likely low level of attention, the average consumer would be aware of the differences between the signs and was not likely to consider – either at the point of initial interest, purchase or post-sale observation - that the Big Horn product was a Red Bull product, or economically linked to it. Instead, the average consumer would perceive the Big Horn product as a cheaper or alternative version.

We discussed the decision in the INTA Bulletin.

No Hugz for you: copycat shapewear jeans infringe various IP rights

The IPEC's judgment in Freddy v Hugz Clothing Ltd & Ors was a rare case running the gamut of trade marks, designs and patent infringement, as well as contractual claims. Even more unusually, it was such a claim in the fashion industry, where disputes often do not reach the Courts as the parties reach an out of court settlement.

The Claimant, Freddy SpA, owns the brand WR.UP, a line of jeans it markets as "body enhancing". The WR.UP jeans incorporate novel silicone inserts around the rear pockets in order to shape the body of the wearer. Following a settlement agreement with the defendants, Hugz Clothing Limited (and others), as a result of Hugz having copied the WR.UP jeans and selling them under its brand name HUGZ, Hugz subsequently launched a second, slightly changed, version of these jeans.

Freddy claimed that this breached the settlement agreement and amounted to patent infringement, UK unregistered design right infringement and passing off. Deputy Judge David Stone found for Freddy in respect of almost every single one of its claims.

The judgment provides useful guidance on a number of issues. In particular, the Court found that post-sale confusion can amount to passing off, which will be very helpful to fashion brands dealing with copycats of distinctive or influential designs, which do not copy a brand name or logo. Post-sale confusion (where a consumer knows they are purchasing an imitation product when they buy the goods, but they do so because they want other people to believe that the product is the original) is well-established in relation to registered trade mark rights. However a positive finding of post-sale confusion in the context of passing off had never been made by the English courts, and earlier case law had suggested that it was insufficient. However, referring to a 1994 New Zealand High Court decision (which found it irrelevant whether confusion relating to Levi's iconic red tab on the rear of its jeans occurred at the point of sale or afterwards), the judge held that HUGZ jeans continued to make misrepresentations to consumers when worn, which caused damage to Freddy.

It is worth noting that the Claimant had very strong evidence as to the get-up of its jeans and how it had educated the public as to that get-up; the Defendant meanwhile did not adduce any evidence and did not appear at the trial. However, the decision demonstrates the value in developing and promoting distinctive branding elements as part of a design, in addition to traditional word marks and logos.

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Can third party trade marks be used within video games?

The extent to which video game makers can use third party brands within the game is a current hot topic. In March 2020, a New York court ruled that the publisher of the hugely successful Call of Duty games had not infringed the HUMVEE trade mark by depicting Humvee military vehicles in the game, on the basis of striking a balance between the monopoly rights of a trade mark owner and First Amendment free speech interests.

Meanwhile, in England, Manchester United has brought trade mark infringement proceedings against the developer and publisher of the Football Manager game for using the football club's name in the game, but also for not using its club crest. This unusual claim is based on the argument that, given the game uses the team name, as well as the real names of its stadium and players, users of the game would expect to also see the official club crest. Accordingly, the failure to include the crest has, Manchester United argues, deprived it of its right to license the trade mark to game developers/publishers.

Read more and see also our feature article in the INTA Bulletin.

Amazon not liable for storage of infringing goods but questions remain over its fulfilment service

Amazon and other online intermediary retailers have long faced criticism for allowing third parties to sell counterfeit or other IP-infringing products on their platforms. In this case, Coty discovered its Davidoff Hot Water fragrance being offered for sale on Amazon by unknown third parties, which infringed Coty's trade mark rights.

Following a reference to the CJEU by the German Court, the CJEU determined that a company will not be liable for trade mark infringement where it stores infringing goods on behalf of a third party seller if it had no knowledge that those goods were infringing and it didn't itself intend to offer for sale those goods. However, the CJEU's decision was based on a narrow set of facts and did not take account of the fact that Amazon's involvement in offering the goods for sale may go beyond simply "warehousing" when operating its "Fulfilment by Amazon" scheme. It was for the German Court to decide whether Amazon's scheme amounts to trade mark infringement, applying the CJEU decision.

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No trade mark infringement where a third party website operator independently reproduces an infringing sign

The CJEU found in mk advokaten GbR v MBK Rechtsanwälte GbR that a trader could not be said to be "using" a sign where a third party, on its own initiative and in its own name, placed that sign on a website after independently reproducing it from an infringing website entry placed by the trader. "Use" required active conduct and direct or indirect control of the act constituting the use.

In German proceedings, the Claimant had sought a fine against the Defendant law firm for breach of a final order prohibiting trade mark infringement through use of the sign "MBK" for legal services. The Defendant had changed its name and arranged for the infringing name to be removed from an online directory. However, several websites carried advertisements for its services under the old infringing name, even though the Defendant had never requested any of them to do so.

The CJEU held that the other websites' use of the sign did not constitute "use" by the Defendant. For it to have amounted to use, the Defendant would have had to ask the website operators (directly or indirectly) to place an advert online on its behalf.

IPEC considers infringement through 'bait and switch' selling online

In Pliteq v iKoustic the IPEC gave some helpful guidance on when bait and switch sales online might amount to trade mark infringement. Bait and switch selling in the context of trade mark infringement is where a Defendant uses the Claimant's mark as a bait to attract the consumer's attention, and then exploits the opportunity to switch that customer's attention to its own product or service. This case highlights that establishing trade mark infringement in such cases is very fact sensitive. Ultimately, the Court made clear that the question is whether the Claimant's mark is used in relation to the sale of its goods or otherwise.

For a number of years the Claimant, Pliteq, which designs and manufactures acoustic damping products had supplied its GENIEMAT acoustic damping products to the Defendant iKkoustic for sale to iKoustic's customers in the UK. iKoustic sold Pliteq's products online on its own website, and in doing so bid on the GENIEMAT marks in Google Ad campaigns. The relationship between the parties broke down, and in the last year of distribution, whilst its stock of Pliteq's products dwindled, iKoustic started selling its own alternative products to existing customers.

Pliteq complained about the use of its GENIEMAT marks to sell iKoustic's alternative products, and argued this was bait and switch selling amounting to trade mark infringement. Passing off was also claimed but not in relation to bait and switch selling. The IPEC gave guidance on when bait and switch selling will or will not amount to trade mark infringement. It also provided helpful clarification on bait and switch selling in respect of Dynamic Google Ads.

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Court of Appeal dismisses Bentley Motors' appeal against trade mark infringement

In Bentley Motors v Bentley 1962, the Court of Appeal dismissed Bentley Motors' appeal against a finding of trade mark infringement relating to its use of the sign BENTLEY, alongside its famous B-in-wings device, in relation to clothing, use which had begun in 1987. The claim was brought by Bentley Clothing, the owner of various trade marks for BENTLEY for clothing. The key points of interest relate to interpretation of certain defences relied upon by Bentley Motors. At trial, it had sought to rely upon the defence of honest concurrent use, but this argument failed because the Court concluded it had adopted 'grandmother's footsteps', consciously developing the use of BENTLEY in relation to clothing and headgear but in incremental stages.

Whilst it was not given permission to appeal on honest concurrent use, Bentley Motors also relied upon a transitional provision in the Trade Marks Act 1994 on the basis that it had sold certain types of clothing before the commencement date of the 1994 Act, and that this use did not infringe Bentley Clothing's relevant trade mark. Whilst the High Court had found that this defence applied in a limited way, the Court of Appeal rejected Bentley Motors' argument that the trial judge had applied it at too granular a level and should have assessed the goods at a higher level of generality.