In Aga v UK Innovations, AGA brought proceedings for trade mark infringement in respect of electronic conversion apparatus to convert a traditional (fossil fuel) AGA cooker to an electronic cooker, known as eControl Systems. In the proceedings, AGA acknowledged that there was a legitimate resale and refurbishment market for AGA cookers, and did not object to the Defendant UK Innovations supplying its 'eControl Systems' to AGA customers. However, AGA alleged that the sale of complete retrofitted AGA cookers infringed its trade mark rights in the name "AGA" as well as other trade marks, including the "badge" AGA logo. AGA also alleged that the control panels for the Defendants' converted cookers (eControl Cookers) infringed AGA's copyright in a design drawing for a control panel for an electronic cooker.
AGA succeeded on one ground of trade mark infringement in relation to the Defendants' marketing of complete converted eControl Cookers, but it was unsuccessful in relation to other trade mark allegations, and in its claim that UK Innovations had infringed copyright in the design document for an oven control panel.
Exhaustion (s12 Trade Marks Act 1994)
Trade marks are "exhausted" in the UK when goods bearing the relevant trade mark are put on the market in the UK or EEA with the consent of the trade mark owner. Once that has occurred, then further use of the trade mark in relation to those goods will not be an infringement of the trade mark, unless there are legitimate reasons for the trade mark owner to oppose further dealings in the goods. Such 'legitimate reasons' could include, for example, where the condition of the goods has been changed or impaired after they have been put on the market (such a change in condition would appear to be evidently the case were a fuel AGA cooker has been converted to an electronic one).
Disputes relating to exhaustion of trade marks tend to arise most often in connection with repackaging of goods (particularly in the pharmaceutical sector), luxury goods which may have limited and exclusive dissemination, and in relation to refillable products (such as gas cylinders).
The Court noted that it must strike a fair balance between protecting the trade mark owner's interests in its trade mark applied to the goods as against the interests of others, such as the original purchaser and others who deal with those goods in the aftermarket.
In conducting this analysis the Court considered various specific acts carried out by the Defendant and whether they gave rise to 'legitimate reasons' for AGA to oppose them:
- Refurbishment of AGA cookers did not in itself create legitimate reasons for objection. The Court apparently avoided getting drawn into the Ship of Theseus (or Trigger's Broom) paradox, commenting that "there may come a point when the extent of the works done will mean that the resulting product is no longer a refurbished or renovated version of the original product but is, instead, a new and different product", but that was not the case here.
- As for the conversion works, these did effect a significant change in the condition of the goods but a change alone was not enough. AGA still needed to show that there were legitimate reasons for it to object.
- AGA argued that the Defendants' e-Control Cookers were of poor quality and risked seriously damaging the image it had created for its mark. However, the evidence before the Court did not establish this.
- Lastly, however, AGA did have legitimate reasons to object in relation to the way in which eControl Cookers were marketed and sold. The Court found that the Defendants' website copy such as "Buy an eControl AGA" and referring to "decades of Aga experience" may cause customers to assume that the eControl Cooker was an AGA product, and this was something to which AGA could legitimately object on the basis of its trade mark rights.
The Court went on to find that the Defendants had infringed AGA's trade marks through its marketing activities because of the risk that customers would assume that AGA and UK Innovations were connected.
Post-sale confusion
The Court also considered whether there could be a risk of post-sale confusion, taking into account additional submissions from the parties after the trial. AGA contended that consumers may perceive eControl Cookers as co-branded both AGA and UK Innovations, on the basis that eControl Cookers were marked with an 'eControl System' badge. The Court considered that such a clear signal of the cooker having been converted was not only reasonable, but it may even be "preferable to draw attention to those changes". The badge therefore did not give rise to legitimate reasons for AGA to object.
Copyright in design drawings (s51 Copyright Designs and Patents Act 1988)
AGA also alleged that UK Innovations had copied the control panel from its electronic cookers and had thereby infringed its copyright in the CAD drawing for the AGA control panel.
The Defendants accepted that they had copied the control panel. The Court also found that the drawing for the panel was an original artistic work protected by copyright. However, it is not an infringement of copyright in a design document to make an article to the design in that document (or to copy an article made to that design), unless the design is for something which would itself be an artistic work (and as such would be protected by copyright as well). For the purposes of this exception to infringement, "design" has the same meaning as it does for as the UK unregistered design right, which protects the shape or configuration of an article, other than surface direction. The purpose and effect of this provision is to limit the role of copyright in relation to protection of industrial designs - the relevant right to protect such designs would instead be the UK unregistered design right but this has a much shorter term of protection than copyright.
However, as the Court noted, there is a potential tension between this aspect of UK copyright law and the decision of the European Court of Justice in Cofemel. Whilst Cofemel related to subsistence of copyright and the originality threshold, rather than infringement, the Court identified that it was essentially addressing the same problem, namely "the unwanted application of copyright protection in the sphere of industrial design", but from a different angle. However, the Court ultimately left open the question of how Cofemel may impact the limitation that making a (non-artistic) article to a design does not infringe copyright in the design document.
Comment
This case was a relatively unusual consideration of exhaustion within a national market, as exhaustion more typically arises in the context of parallel traded goods between different markets. The scope of activities which the Court found did not infringe the trade marks (because those rights were exhausted) – including the refurbishment and conversion of AGA cookers – will likely be welcomed by the business community concerned with up-cycling and re-conditioning of products which have already been put on the market by or with consent of the trade mark owner. Sustainable practices of this kind may be permissible, notwithstanding that they may make a (perhaps inevitable) change to the quality of the goods in the act of refurbishing them. This on its own will not necessarily give rise to a legitimate reason for the trade mark owner to oppose such dealings in the aftermarket, and the evidence will therefore be key.
Meanwhile, the position with copyright remains that the copyright in a design document will not be infringed when a non-artistic article is made to the design but, as the Court identified a potential tension between the Cofemel decision and the relevant UK law, this issue may be considered in more depth in a future judgment.
Finally, it is worth noting also that the Court rejected the claim against one of the directors of the Defendant company as a joint infringer with the Defendant company. Applying the analysis in the Supreme Court's decision in Lifestyle Equities v Ahmed , the Court found that the director did not have the requisite knowledge of the essential facts necessary to establish trade mark infringement, nor of the facts that meant that in relation to the marketing of the eControl Cooker there was no exhaustion defence. However, the case was heard before the Lifestyle Equities decision was delivered and so this will have impacted on the evidence that was before the Court.