The Court of Appeal has upheld the High Court's finding of infringement on the basis of indirect confusion in respect of the EAGLE RARE trade mark by the use of the sign 'American Eagle'. The ruling highlights the different nature of direct confusion and indirect confusion: whilst there was little likelihood that consumers would mistake 'American Eagle' for 'Eagle Rare' or vice versa (i.e., there was no direct confusion), the Court was entitled to conclude that consumers would believe that 'American Eagle' came from the same, or an economically linked, business as 'Eagle Rare' (indirect confusion). In particular, the Court of Appeal found that the reasons the trial judge gave for concluding that 'American Eagle' would not be mistaken by the average consumer for 'Eagle Rare' did not preclude the possibility that the average consumer would believe that the two brands were somehow related.
Sazerac owns two trade marks for EAGLE RARE and has produced and sold a Kentucky straight bourbon whiskey under the EAGLE RARE mark since 2001. Halewood launched a Tennessee straight bourbon whiskey under the sign 'American Eagle' in 2019 and also sought to register a trade mark for the name in the UK and EU.
Whilst the High Court found that there was a significant (but not overwhelming) similarity between the signs, and the goods were identical, it found that there was no likelihood of direct confusion. However, Halewood had infringed the EAGLE RARE trade marks on the basis of a likelihood of indirect confusion, i.e. that consumers would believe that its American Eagle bourbon was produced by or somehow linked to Sazerac.
We wrote about the High Court decision last year.
Halewood appealed to the Court of Appeal on the basis that the judge had erred in principle in conducting the contextual assessment of the use of the sign complained of, in particular, that the judge had not taken into account the consumer's mindset with regards to the type of brands that may engage in brand extensions. Halewood also challenged the conclusion that there was a likelihood of indirect confusion on a number of grounds.
Arnold LJ rejected Halewood's argument that Fancourt J had erred in respect of the contextual assessment of the use of the sign complained of, i.e., the context in which the alleged infringing sign has been used.
In addition, he concluded that the judge was entitled to take the view that some consumers of bourbon would believe that 'American Eagle' was related to or was a special version of 'Eagle Rare' and this was not due to speculation on the judge's part, even though there was no evidence of actual confusion (which was not surprising given the novelty, low-key launch and limited release of the 'American Eagle' brand).
As Arnold LJ concluded in his judgment "… consumers would not necessarily scrutinise the label to check whether or not there was a link. Trade mark law is all about consumers’ unwitting assumptions, not what they can find out if they think to check".
The decision demonstrates that, whilst a finding of a likelihood of indirect confusion is not a 'consolation prize' for those that cannot establish direct confusion, there will be certain circumstances where the Court will be prepared to find infringement on the basis of a likelihood of indirect confusion. This case is such an example: in particular, it was of particular relevance that it was common and well-known that there are bourbon sub-markets. Producers produce different expressions of brands and release different products with different names, which may allude directly/indirectly to another brand made in the same distillery or group, without necessarily referring to the main brand on the label. The trial Judge was therefore entitled to conclude that once 'American Eagle 4 year old' become established and more widely known than 'Eagle Rare', some consumers would think that 'Eagle Rare' was a special version of 'American Eagle'