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This briefing note is only intended as a general statement of the law and no action should be taken in reliance on it without specific legal advice.

Musical Chairs? Not such a good game from the IPEC
 Briefing 
Author
Mary Guinness & Jaimee Bickle
Date
12 August 2015

Musical Chairs? Not such a good game from the IPEC

Two recents decisions of the intellectual property enterprise court (IPEC) may have important consequences for the geographical extent of use that you must be able to show in order to maintain your community trade mark (CTM).

In both cases, the claimants' CTMs were found invalid because they had not been used sufficiently widely in the EU.  The first case primarily concerned the issue of "genuine use", while the second concerned "acquired distinctiveness". 

These cases highlight the precarious position that companies may find themselves in if their CTMs are challenged. Companies must now consider whether they should register national trade marks in key jurisdictions rather than, or in addition to, registering a blanket CTM that may be vulnerable to an invalidity challenge in the High court.

The Sofa Workshop Ltd v Sofaworks Ltd

Two major competitors in the furniture world were caught up in a dispute over the use of the name "Sofaworks". Sofa Workshop, part of the DFS group, owned two CTMs for SOFAWORKSHOP and had brought a claim against a rival (who previously traded as CSL) for its use of "Sofaworks", on the basis of trade mark infringement and passing off.

Genuine use

Sofaworks counterclaimed that the two CTMs were invalid as there had not been genuine use in the Community. Sofa Workshop was able to evidence extensive use of its trade marks in the UK, but could not establish use in any other EU country.  Interpreting the Court of Justice of the European Union decision in OMEL/ONEL the IPEC ruled that use in one territory is not sufficient to prove genuine use throughout the Community.  The IPEC identified only one exception to this rule – where the market for the goods or services for which a CTM has been registered is in fact restricted to the territory of a single Member State, use in only one Member State might satisfy the geographical requirements for genuine use.  Unfortunately for Sofa Workshop, it was unable to take advantage of this exception since the market for sofas and other furniture is not by its nature restricted to a single Member State. 

The court went on to consider the issue of acquired distinctiveness. Due to the unarguably descriptive nature of the trade marks, Sofa Workshop was required to prove that the trade marks had acquired distinctiveness in every territory where English is the official  language (e.g. UK, Ireland and Malta) and countries where English was widely spoken as a second language (e.g. the Scandinavian countries). Since Sofa Workshop could not prove acquired distinctiveness outside the UK, both CTMs also failed on this point (Ford and Junited Autoglas applied). 

Passing off

Lastly, the court considered Sofa Workshop's passing off claim.  In a much needed consolation prize, the IPEC found in favour of Sofa Workshop on the passing off point. The court was satisfied that the claimant's trading name had acquired a secondary meaning for the relevant portion of the UK public and had accumulated considerable goodwill, helped no doubt by the claimant's actual evidence of confusion between the marks.

The Ukulele Orchestra of Great Britain v Clausen and another

Just a few days later, the IPEC was called upon to consider another dispute which turned on the geographical extent of use a mark.  This case was between the Ukulele Orchestra of Great Britain (UOGB) and The United Kingdom Ukulele Orchestra (UKUO), a German limited partnership.  UOGB alleged trade mark infringement and passing off of its CTM for THE UKULELE ORCHESTRA OF GREAT BRITAIN. 

Acquired distinctiveness

The defendant challenged the validity of the CTM on the basis of descriptiveness. In this instance, the IPEC held that "Ukulele Orchestra" was descriptive in all English speaking and German speaking territories (the German for Ukulele Orchestra being Ukulelenorchester).  In addition the court considered that the words 'Ukulele Orchestra of Great Britain' would be well understood in countries in which English was widely spoken.  Ultimately the claimant was required to prove acquired distinctiveness in 12 Community territories. Firstly, the English speaking territories of the UK, Ireland, Malta, Netherlands, Sweden, Denmark, Finland and Cyprus and secondly, as the mark would be understood by the average consumer in Germany, the German speaking territories of Germany, Austria, Luxembourg and Belgium. Needless to say, UOGB was unable to meet this requirement, considering that they had only ever toured and promoted themselves in the UK and Germany.

Passing off

Although the claimant was unable to prove that the trade mark UOGB had acquired distinctiveness in the wider Community, it was able to demonstrate that it owned the necessary goodwill. The use of the name United Kingdom Ukulele Orchestra was a misrepresentation to those in the UK where the terms "Great Britain" and "United Kingdom" are often, albeit erroneously, used interchangeably. So, as with the Sofaworks case, the claim was saved by a successful passing off. 

Comment

These cases demonstrate the importance of strategic filing of new trade mark applications and keeping Community trade mark protection and trade mark use under periodic review to determine whether national protection should be increased.

In particular, the Sofaworks case illustrates the very narrow approach that the IPEC is currently taking to the question of genuine use.  The Court of Justice of the European Union in ONEL/OMEL specifically avoided stating whether use in one country is enough to show genuine use, but the IPEC has now stated unequivocally that it is not.  This approach is not uncontroversial and a Court of Appeal judgment would be very welcome to clarify whether it is the correct one. If a CTM is a unitary mark, why should use in one member state be insufficient?  Unfortunately Sofaworks do not appear to be appealing this decision, stating that it would be easier to change their name than to appeal.  Until there is a ruling from the higher court on this point, companies must consider taking protective measures against the current approach by the courts, which may include filing national applications in key territories.