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Choosing a brand: the importance of considering goodwill and reputation

Posted on 02 September 2019

Choosing a brand: the importance of considering goodwill and reputation

The recent IPEC decision in Claridge's Hotel Limited v Claridge Candles Limited and Anor serves as a reminder that if an earlier trade mark holder has a substantial reputation its rights may extend beyond the goods and services for which its trade mark is registered. Some consideration should be given to this prior to launch, particularly given the risk of personal liability for trade mark infringement for those involved in the business.

Start-up company Claridge Candles has been found liable for trade mark infringement and passing off, alongside its sole director, following a claim for trade mark infringement and passing off by the world-famous London hotel Claridge's. The new business had launched its website just one month prior to the proceedings and had recently printed 28,000 labels displaying the CLARIDGE sign. Claridge's limited its claim for damages to £10,000, but the Defendant will also likely be liable for legal costs.

Despite maintaining that the name of its brand 'Claridge Candles' was chosen as a reference to the director's address (at 'Claridge Court') the Court decided that this use infringed the trade mark CLARIDGE'S and was also passing off.  Claridge's' claim for trade mark infringement relied on its UK trade mark registration for CLARIDGE'S covering various goods and services in classes 3, 5, 16, 35, 43 and 44, but not specifically covering 'candles'.  Interestingly, Claridge Candles was partially successful in challenging the mark for non-use, with the court finding that there had not been genuine use of the mark in respect of many of the goods and services covered by the registration (including toiletries). This serves as a reminder to trade mark owners of the risk of relying on a mark that has been registered for more than five years and not been put to genuine use for all of the goods and services covered by the registration – a loss of protection for goods and services for which the mark has not been used is likely.   

Whilst Claridge's lost trade mark protection in respect of certain goods and services, it succeeded in a claim for trade mark infringement based on its reputation. Claridge's established that its mark enjoyed a substantial reputation in the UK for hotel services (and other services) and had an 'image of luxury, glamour, elegance and exclusivity'. The Court concluded that there would be a link in the mind of consumers between the 'Claridge Court' sign and CLARIDGE'S for the following reasons:

  • they were visually and aurally almost identical, with a high degree of conceptual similarity
  • the goods and services, whilst different, were premium offerings and may appeal to a similar part of the public
  • the strength of the reputation of the CLARIDGE'S mark
  • the inherent distinctiveness of the CLARIDGE's mark  

The Court went on to conclude that the Defendants' use of 'Claridge' would have caused a transfer of image from the CLARIDGE'S mark in the mind of the average consumer, taking advantage of its well-known nature in relation to hotel services, and also its reputation for luxury, glamour, elegance and exclusivity. The Court also found that the passing off claim followed the claim for trade mark infringement.

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