Athleta partially successful in trade mark infringement appeal but Sports Group Denmark can continue to use 'Athlecia'

In brief 

• US athleisure brand Athleta has partially succeeded in overturning a High Court decision that had rejected part of its trade mark infringement claim and passing off by the defendant's use of a logo in relation to its Athlecia brand.  
• However, the Court of Appeal rejected Athleta's appeal in relation to the defendant's use of the word 'Athlecia' itself. Whilst the defendant will therefore have to change its use of the logo, it can continue to use the 'Athlecia' brand name. 
• The court's decision is a reminder that, where inherently distinctive marks contain descriptive elements (such as 'ATHLE'), they will have a narrower scope of protection where there is a weak level of distinctiveness, which can prevent a finding of confusion with similar signs. 
• The Court of Appeal also found that a variation in the positioning of word and device elements of the registered mark (in this case placing a roundel above instead of beside text) amounted to use of the registered mark, as the variation did not alter the distinctive character of the mark. 

Background  

US athleisure retailer Athleta, part of the Gap group, had brought trade mark infringement and passing off proceedings against Sports Group Denmark in relation to its use of the sign 'Athlecia' as a word mark and in combination with a logo:  

Our November 2024 article summarises the High Court's decision. In short, the judge held:  

• Athleta's Word Mark and Combination Mark both had distinctive character and were therefore valid. However, both marks were partially revoked for non-use in respect of certain goods and services, leaving bags, clothing and headgear for the Athleta Word Mark; and clothing for the Athleta Combination Mark. 
• Although the ATHLETA Word Mark and the Athlecia Word Sign were highly similar and the goods were identical, there was no likelihood of confusion because ATHLETA had weak distinctive character.  
• The Second Athlecia Combination infringed the Athleta Combination Mark due to a likelihood of confusion. 
• There was no passing off because only the ATHLETA Word Mark had the necessary goodwill and the Athlecia Signs did not amount to a misrepresentation of that mark.  
• As a result, the defendant could continue to use the Athlecia brand name.  

Court of Appeal decision 

Athleta appealed to the Court of Appeal on various grounds. The decision provides useful clarification in particular on the level of distinctiveness given to marks with descriptive elements and when variations of combination marks will amount to genuine use of a registered trade mark.  

Infringement – ATHLETA v ATHLECIA – distinctiveness  

The Court of Appeal clarified that where a trade mark has a descriptive element, even if that trade mark is found to be distinctive, it will have a narrower scope of protection against a mark that also uses that descriptive element.  

The trial judge had found ATHLETA and 'Athlecia' to be highly similar. It was also accepted that the Athlecia Word Sign was being used in respect of identical goods, and the average consumer was said to pay a high level of attention. Despite this, the judge had concluded there was no likelihood of confusion. On appeal, Arnold LJ commented that "at first blush this is a somewhat surprising conclusion". However, the judge had reached this conclusion because ATHLETA was of low distinctiveness: 'ATHLE' (being based on words such as 'athlete' or 'athletic') was an element of the mark and sign which would be understood to be descriptive where used for activewear. The average consumer would therefore pay closer attention to the suffixes, 'TA' and 'CIA'. As these elements were distinguishable and the common element was descriptive, the trial judge had found no likelihood of confusion.  

Athleta argued that the judge had adopted an inconsistent approach to assessing the similarity of the two words: when considering similarity more broadly, the judge focussed on the fact that the words both ended in A and were of a similar length, but when assessing similarity in the context of likelihood of confusion, he found only that the 'ATHLE' element was similar. The Court of Appeal concluded that this was not inconsistent as, in the latter situation, he had focussed on the suffixes of 'TA' and 'CIA' which was not inconsistent with them both ending in 'A'. Secondly, the principle being applied was that the mark was weakly distinctive (which was not challenged) and therefore had a narrower scope of protection. A closer sign may have infringed, e.g. 'Athletia', but the judge's finding that ATHLETA and 'Athlecia' were not sufficiently similar to cause a likelihood of confusion, was not an appealable error.  

Positioning and variant forms 

The trial judge had held that the Second Athlecia Combination was highly similar to the Athleta Combination Mark and concluded it infringed. Meanwhile, the trial judge had found the First Athlecia Combination to be of medium similarity to the Athleta Combination Mark, because its roundel was positioned above the word rather than to the left. This change in positioning was said to make some but not any significant difference in assessing similarity but, when it came to assessing likelihood of confusion, the trial judge said it was significant enough to find the First Athlecia Combination did not infringe. Athleta argued that the judge had made an inconsistent finding when concluding that the position of the roundel did not make a significant difference to the assessment of visual similarity but did when assessing likelihood of confusion. The Court of Appeal agreed and therefore reassessed the issue. 

In doing so, Arnold LJ noted that it was commonplace for trade mark owners to use words and devices in various spatial arrangements and it would be easy for an average consumer to misremember the specific placement of a word and device in a combination trade mark. Accordingly, the court ruled the positioning of the roundel made no material difference to the degree of similarity and therefore the First Athlecia Combination was also of high similarity. The First Athlecia Combination therefore also infringed the Athleta Combination Mark.  

The court clarified that, when considering variant forms, the question is not "whether the difference is noticeable" (as the trial judge had considered), but "does it alter the distinctive character of the trade mark?". Applying this test, the court overturned the judge's conclusion, finding that use of the Athleta Purple Pinwheel could amount to genuine use of Athleta's Combination Mark. This however did not affect the ultimate outcome of the revocation action.  

Passing off – goodwill and use of variant forms and positioning 

Athleta's passing off claim had failed at trial as the court found it only had goodwill in the ATHLETA Word Mark and there was no misrepresentation through use of 'Athlecia'. Had the judge found goodwill to subsist in the Athleta Combination Mark and/or the Athleta Dark Pinwheel, he would have found a misrepresentation by use of the Second Athlecia Combination. Damage was accepted.   

The Court of Appeal agreed that the trial judgment was inconsistent in finding that:  

• Athleta had goodwill in the Athleta Word Mark due to significant sales of Athleta branded clothing in John Lewis;  
• photographs of John Lewis stores showed clothing being sold under various Athleta signs, including the Athleta Dark Pinwheel;  
• the John Lewis sales constituted genuine use of the Athleta Combination Mark (or close variants);  
• but, despite the above, the judge found there was insufficient use of the Athleta Dark Pinwheel to ground any goodwill.  

The court agreed this was an insupportable finding. Photographs clearly showed the Athleta Dark Pinwheel being used on clothing swing tags and there was no reason to doubt this was not consistent across products. This use was clearly denoting trade origin and thereby generating goodwill. The Court of Appeal therefore found passing off in relation to both the First and Second Athlecia Combinations. 

Revocation – targeting  

The trial judge had found no genuine use of the Athleta Combination Mark (which included use of the Athleta Dark Pinwheel) in the UK in respect of bags and headgear because there was very little evidence of use on its website for these products and it was not possible to tell which webpages the annual 100,000 UK visitors looked at. Athleta argued that the judge had failed to take into consideration key factors relating to targeting (drop down menus offering shipping to Europe, option to display sterling, witness evidence stating that Athleta was targeting the UK, international distribution agreements that included the UK) and had in effect applied an illegitimate de minimis rule.  

The Court of Appeal rejected this ground. Whilst the judge did not expressly refer to these targeting factors, he had clearly accepted that the website was to an extent targeting UK/EU customers and was entitled to find there was insufficient evidence to show genuine use. He had not erred in applying a de minimis rule since it was not a situation where he had found some use but that it was not enough; instead, he had found no genuine use at all.  

Practical takeaways 

Variant forms of registered trade marks – Brand owners should take comfort from this decision because it reiterates that, where a combination mark of word and device has been registered, variations in the arrangement could still amount to use of the registered mark so long as they are not so significant as to alter the distinctive character of the registered mark. Similarly, infringers will not be able to use a mere variation in placement of a device element to avoid infringement, where the marks are otherwise similar.  

Beware descriptive elements of distinctive TMs – When considering new brand names, it is important to be aware that descriptive elements will reduce the distinctiveness of a trade mark and therefore narrow the scope of protection when it comes to potential infringers. As always, it is a balancing act between having a helpful signifier of what the brand relates to and keeping it innovative and distinct.