Comic Enterprises Ltd v Twentieth Century Fox Film Corporation  EWCA Civ 41
On 8 February 2016, the Court of Appeal handed down its decision in the on-going dispute between Twentieth Century Fox and a UK comedy club owner, Comic Enterprises, over the name 'glee'.
In finding for the 'David' in this David and Goliath battle, the Court of Appeal dismissed the appeal of Twentieth Century Fox and upheld a decision of the High Court from February 2014 in which the American film studio's use of the title 'glee' was found to infringe Comic's UK trade mark.
Twentieth Century Fox produces the cult musical comedy TV series 'glee'. Since its launch in the UK and US in late 2009, the Fox series has won multiple awards and sparked spin-off DVDs, concert tours, song releases and merchandising.
Comic Enterprises runs comedy and cabaret venues in England under the names 'Glee' and 'The Glee Club'. Since 2001, Comic has owned a registered UK trade mark for a series of two device marks for services in class 41, including live comedy, cabaret and live and recorded music:
In September 2011, Comic issued proceedings against Fox for UK trade mark infringement and passing off.
Finding in favour of Comic, in February 2014 the High Court held that:
- Comic's UK trade mark was validly registered (although it was partially revoked for non-use in class 25 (clothing) and for some of the entertainment services in class 41).
- Fox's use of 'glee' amounted to trade mark infringement:
- under s.10(2) of the Trade Mark Act 1994, as it was use of a confusingly similar sign in the course of trade.
- under s.10(3) of the 1994 Act, as it was use of a similar sign without due cause that was detrimental to the reputation or distinctive character of Comic's trade mark.
Comic's passing off claim failed as the trial judge held that whilst the evidence established confusion, it did not establish an actionable misrepresentation causing damage to Comic.
Fox appealed against the High Court's findings of trade mark infringement and Comic cross-appealed against the passing off decision.
The Court of Appeal rejected all appeals.
s.10(2) and wrong-way round confusion
In re-evaluating the evidence to assess the likelihood of confusion, the Court of Appeal found the issue to be finely balanced until it came to analyse the evidence of actual confusion.
The relevant date for assessing likelihood of confusion was December 2009, being the date of the launch of Fox's 'glee' TV series. However, crucial to the trial judge's finding of a likelihood of confusion was the evidence of consumers who knew of the 'glee' TV series and, on subsequently seeing or hearing of Comic's comedy clubs, believed Comic had some connection with the series. This evidence naturally post-dated December 2009 as it relied on Fox having established a reputation in the mark 'glee' as a consequence of the significant success of the TV series in the UK. The Court of Appeal therefore upheld Comic's claim under s.10(2).
Importantly, and despite Fox's arguments the contrary, the Court of Appeal confirmed that this evidence of 'wrong way round' confusion was admissible and probative of a likelihood of confusion at the relevant date. There was no need for a consumer to be familiar with the registered trade mark first as the relevant question was whether there is a likelihood of confusion in light of the defendant's actual and threatened activities. The infringement analysis involves an element of looking forward and evidence which comes to light after the defendant's first use of the sign in issue was held to assist the court in carrying out that analysis.
s.10(3) and detriment
Comic's claim under s.10(3) was also upheld. Relying on evidence that customers were deterred from attending the comedy clubs because of perceived links to Fox's TV series to show detriment, the trial judge had held that "it is not necessary for a claimant under section 10(3) to produce evidence quantifying a change in economic behaviour. All that is needed is objective evidence that there is or will be such a change".
The Court of Appeal endorsed this approach and found that the evidence established a change in the economic behaviours of consumers, or evidence of a serious likelihood that such a change would occur in the future.
The Court of Appeal held that the launch of Fox's TV series was not a misrepresentation such as to cause significant numbers of consumers to believe that the business behind Comic's comedy clubs was the same as that behind the TV series. The key factor here appears to be that the comedy clubs which were established in 2009 had not been materially affected by the TV series; it was Comic's later club openings in other locations which led to confusion but not an actionable misrepresentation.
WHY IS THIS IMPORTANT?
A further appeal by Fox seems likely. Fox's liability for trade mark infringement would ordinarily have exposed it to a range of onerous remedies including an injunction, delivery up of infringing copies of the TV show (physical and digital) within Fox's control, and damages or an account of profits. However, the parties had reached an interesting trade-off in advance of the appeal (mentioned at paragraph 24 of the Appeal decision without any detail provided) in relation to remedies; Fox, if successful on appeal, would not seek to recover its legal costs from Comic, and Comic would not pursue an injunction or delivery up against Fox if the claim was upheld. Unless successful on a further appeal, Fox remains liable to Comic for an account of profits which, given the revenues generated by the TV show, could be significant.
The admissibility of evidence of 'wrong way round' confusion means that a later sign may become a victim of its own success if it builds up sufficient reputation to cause confusion between it and an earlier - registered but less well known - trade mark. Had Comic issued proceedings against Fox shortly after December 2009, prior to Fox's TV series gaining popularity and before any evidence of 'wrong way round' confusion would have occurred, the outcome of this case may have been different.
This case underlines the power of trade mark registrations and the importance, more than ever, of trade mark clearances in all relevant jurisdictions if businesses wish to steer clear of infringement actions. It also emphasises that the likelihood of 'wrong way round' confusion may increase over time with the growing reputation of the sign but this must be balanced against trade mark owners proactively protecting their trade marks and not acquiescing to infringing use.
A final point of interest which remains to be determined by the Court of Appeal is Fox's additional defence that Comic's trade mark is invalid for being a series mark. To succeed, Fox must establish that s.41 of the 1994 Act which allows series marks to be registered is incompatible with EU law which requires a trade mark to be a single sign capable of being graphically represented. A finding of incompatibility and, consequently, invalidity of series marks will have a significant impact on proprietors of all such trade marks, including Comic.