Compared to previous years, trade mark law and practice in 2019 focussed to a much lesser extent on questions of infringement and enforcement. Instead, the key cases raised questions relating to clarity and precision of trade mark specifications (and whether this can be a ground of invalidity of a registered mark), and alleged bad faith during the trade mark application process. The decision of the Court of Justice of the European Union (CJEU) in the SkyKick case has provided welcome guidance on these issues. Further guidance can be expected in due course from the EU General Court in relation to so-called ‘ever-greening’ of trade marks, on Hasbro’s appeal from the EUIPO Board of Appeal finding of invalidity against a re-filed MONOPOLY trade mark. Alongside this, there have been a number of decisions confirming once more the difficulties in maintaining protection for non-traditional marks, and some notes of caution in relation to appropriate evidence for brand owners seeking to maintain their registrations against a non-use attack.
Court of Justice decision on trade mark specifications
On 29 January 2020, the CJEU issued its decision in Sky v SkyKick, providing important guidance on the grounds available to an applicant seeking to challenge a trade mark registration, especially where it includes general terms such as “computer software” and “financial services”. In April 2018, Mr Justice Arnold (as he then was) had referred questions to the CJEU on a number of issues, upon which the CJEU has decided as follows:
- It is not possible to challenge a registered EU or national trade mark for lack of clarity or precision. The CJEU held that the grounds for challenging a trade mark registration are exhaustively set out in the EU Trade Mark Regulation (which governs EU trade marks) and the EU Trade Marks Directive (which governs trade mark law at the Member State level), and they do not include “lack of clarity and precision”. Accordingly, it is not open to applicants challenging trade mark registrations to argue that general terms such as “computer software” or “financial services” lack clarity and precision. Rather, such a challenge is the preserve of the relevant trade mark office during the examination of an application. In reaching this conclusion the CJEU expressly rejected the Advocate-General’s suggestion that a trade mark registration covering goods or services which lack clarity and precision can be challenged as being contrary to public policy (contrary to public policy being a ground of invalidity – the relevant provision in the Trade Mark Regulation is Art. 7(1)(f). As the CJEU noted: “…the concept of ‘public policy’…cannot be construed as relating to characteristics concerning the trade mark application itself, such as the clarity and precision of the terms used to designate the goods or services covered by that registration, regardless of the characteristics of the sign for which the registration as a trade mark is sought.”
- The CJEU made clear that there is no per se rule that a lack of intention to use amounts to bad faith. Rather, bad faith may be established only where there is “objective, relevant and consistent indicia” which tends to show that the applicant intended, when filing its application, to undermine, in a manner inconsistent with honest practices, third parties’ interests or to obtain, without targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark. Whilst this will require a consideration of the facts in any given case, the CJEU did confirm that an applicant is not acting in bad faith simply because it had no economic activity corresponding to the goods or services applied for at the time of filing the application.
- Importantly, the CJEU went on to determine (consistent with the express language of the Regulation and the Directive) that where bad faith is established it will apply only to those goods or services to which the finding of bad faith attaches, not all goods and services of the mark.
- The CJEU confirmed that the requirement in the UK that an applicant must declare that it is using or has a bona fide intention to use the applied for mark on the goods and services of the application is not contrary to EU law. However, the CJEU went on to hold that infringement of such a declaration would not, of itself, constitute a ground for invalidity; rather it was a factor the tribunal may take into account when considering whether the applicant acted in bad faith.
The decision of the CJEU will now be applied when the case returns to the High Court.
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No ‘Monopoly’ rights for re-filed trade marks
An EUIPO Board of Appeal decision has the potential to impact the validity of countless EU, and EU national, trade marks, following what we understand to be only its third oral hearing in 23 years underlining the significance of this case. The decision concerns the practice of “re-filing” (or “ever-greening”) a trade mark which is identical to an earlier registration and covers identical goods/services. The Board said that, where there is an intention to circumvent the obligation to prove use of the earlier marks, re-filing improperly and fraudulently extends the five-year grace period and amounts to bad faith. Any such re-filed marks are liable to be revoked in relation to the goods and/or services covered by the earlier marks.
Hasbro has appealed the decision to the EU General Court. It will be interesting to see how the General Court considers the bad faith issues raised in this case in light of the CJEU case law as now established in Koton and SkyKick.
The case concerns an invalidity challenge against Hasbro’s famous MONOPOLY EU trade mark (the “Registration”). Hasbro had opposed a third party application for DRINKOPOLY on the basis of its earlier rights, prompting a cancellation action against the Registration. The Registration is identical to earlier MONOPOLY registrations owned by Hasbro and covers identical goods and services to those earlier marks (although it also covers additional goods and services). It was argued that the Registration had been filed with the dishonest intention of preventing third parties from using or registering similar marks, while avoiding the obligation to provide proof of use in opposition proceedings, and had therefore been filed in bad faith.
The Board of Appeal acknowledged that Hasbro took a number of commercial factors into account when filing a trade mark application, such as new licensing opportunities, the desire to maintain a consistent and up-to-date trade mark portfolio and the need to address any gaps in protection due to new products or services. However, Hasbro also acknowledged that there is a benefit in having “young” trade marks where there is no requirement to prove use, and that this is “a consideration” in its trade mark filing strategy. This acknowledgement, notwithstanding its submission that this is common industry practice, seems to have been fatal to Hasbro’s argument.
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Lessons from Red Bull’s colour combination trade mark
In the final instalment of Red Bull’s long-standing efforts to register its combination of the colours blue and silver as a trade mark for “energy drinks”, the CJEU upheld the General Court’s finding that the trade mark (depicted below) was not valid because it lacks sufficient clarity and precision, dismissing Red Bull’s appeal. Red Bull’s two EU trade mark registrations for its blue and silver colour combination included the descriptions “The ratio of the colours is approximately 50%–50%” and that the colours were to be “applied in equal proportion and juxtaposed” to each other.
The decision confirms a high bar for protection of colour combination marks, which often form an important part of a brand strategy. In particular, brand owners who seek to register a colour combination as a trade mark should ensure any description and representation conveys a predetermined and uniform arrangement to stand a chance at maintaining a validly registered EU trade mark.
When seeking to register a colour combination as a trade mark, it is advisable to refer to the Pantone colour ID and to consider including a description which communicates the clear and precise arrangement of the colours as intended to be used. Creating a description that is sufficiently clear and precise may mean that the colour combination trade mark is narrow in its scope of protection, but this may be preferable to obtaining no protection at all. Whilst a description remains optional, in some cases, omitting a description will not serve to make the arrangement of colours more clear and precise.
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EU General Court finds Rubik’s Cube Shape Trade Mark invalid
In a dispute spanning thirteen years, is this now the final twist for the Rubik’s Cube shape trade mark? In 2016, the CJEU confirmed the approach to take in relation to an objection against registration of a shape mark on the basis that the essential characteristics of the shape are necessary to obtain the technical result of a product. In 2019, the General Court upheld a decision that the Rubik’s Cube trade mark registration (depicted below) is invalid.
The ruling is the latest to illustrate the considerable difficulty in obtaining or maintaining trade mark protection for shape marks, particularly where they have a technical function. However, the arguably inconsistent application of the law makes the position uncertain. For example, whilst Lego’s EUTM for its studded brick fell foul of the technical result exclusion (because the brick achieved the technical result of stacking bricks), its EUTM for its mini figurines (with features which enable interlocking with other Lego products, such as bricks) did not.
In 1996, Seven Towns had applied to register the shape of the Rubik’s Cube as an EUTM for “three dimensional puzzles” in class 28. In 2006, Simba Toys filed an application for a declaration of invalidity against the EUTM on a number of grounds. In particular, it argued that the mark consisted exclusively of the shape of the goods which is necessary to achieve a technical result (contrary to Article 7(1)(e)(ii) of the EU Trade Mark Regulation).
In 2016, the CJEU stated that it is “necessary to take into account the technical function of the actual goods represented by the sign in order to examine the functionality of the essential characteristics”. In particular, when examining functional characteristics, it is necessary to look at the mark as represented graphically, but the analysis can go beyond that to consider circumstances and materials other than the graphical representation of the mark, such as the rotating capability of the Rubik’s Cube puzzle.
The matter returned to the EUIPO Board of Appeal, which found the mark invalid and the General Court has now upheld the finding of invalidity. In particular, it concluded that the objection may apply where the graphical representation does not reveal all of the elements of the shape which are necessary to implement the technical solution, provided that implementation of the technical solution cannot be effective without the essential characteristics which are visible in the representation. Any other finding would mean that the technical result objection could be easily circumvented; as an applicant could simply omit from the graphical representation a characteristic which is necessary to achieve the technical result.
The General Court’s decision reflects a clear policy objective of ensuring that the trade mark system does not grant an indefinite monopoly on technical solutions or functional characteristics of a product. Such innovations should be protected, the policy argument goes, through other IP rights, such as patents or designs, which offer a more limited period of protection.
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When less is not always more: Issues registering and enforcing simple logos
A recent branding trend has seen many companies reverting to simple brand identities. When adopting a more simplistic logo, it is important to bear in mind issues of registrability and enforcement that may be more relevant to such logos. In particular, the simpler a logo is, the greater the risk of it not having the requisite distinctive character to be registered, or of it coming up against third party rights.
Adidas three stripes mark
In June 2019, the EU General Court issued its decision in Adidas AG & Marques (Intervener) v EUIPO concerning Adidas’ figurative mark for “clothing, footwear, headgear”, the description for which is: “The mark consists of three parallel equidistant stripes of equal width applied to the product in whichever direction.”
The decision is part of a long-running dispute between Adidas and Belgian company Shoe Branding Europe BVBA, which owns the Patrick sportswear brand (featuring a two stripe logo). In 2014, Shoe Branding filed an application for a declaration of invalidity of Adidas’ mark on the basis that it was devoid of any distinctive character.
Adidas argued that the mark had acquired distinctive character through use but, despite producing almost 12,000 pages of evidence relating to its use, the General Court agreed with the EUIPO that Adidas had not identified sufficient evidence of use of the mark as registered. Much of Adidas’ evidence showed use of signs which, the EUIPO Board of Appeal had concluded, differed from the mark significantly. For example, this included use where the colour scheme was reversed (i.e. white stripes on a black background) and use of sloping signs. These uses altered the distinctive character of the mark as registered. In particular, the General Court took into account the “extreme simplicity” of Adidas’ mark, stating that, “the simpler the mark, the less likely it is to have a distinctive character and the more likely it is for an alteration to that mark to affect one of its essential characteristics and the perception of that mark by the relevant public”.
Further, Adidas had to show use of the mark throughout the EU to demonstrate acquired distinctiveness. Whilst it had produced 23 market surveys in a number of EU member states, only five of those were relevant, with the other 18 being carried out in relation to signs that were not broadly equivalent to the mark as registered. Whilst the CJEU confirmed in the KitKat case (discussed in our July 2018 edition), that it would be unreasonable to require separate evidence of acquired distinctiveness in each Member State, here the results of the five surveys that were on point could not be extrapolated to all Member States.
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McDonald’s fail to prove ‘genuine use’ of Big Mac trade mark
Many reacted with surprise at the widely reported news that McDonald’s had lost its registered EU trade mark for BIG MAC at the EUIPO following a cancellation action by Irish fast food chain, Supermac’s: Supermac’s (Holdings) Ltd v McDonald’s International Property Company Limited. Supermac’s successfully argued that BIG MAC had not been put to genuine use for all of the relevant goods and services (in classes 29, 30 and 42). The BIG MAC of course is synonymous with McDonald’s and millions are sold every year, including across the EU.
However, the burden of proof was on McDonald’s to prove genuine use of its mark in relation to the relevant goods and services and, in this case, McDonald’s failed to do so, as its evidence did not meet the grade. Evidence of use must show the place, time and extent of the use, and should include independent evidence, not just evidence from the trade mark owner. The decision highlights that, irrespective of how popular a mark may be, a trade mark owner must not assume that genuine use will be established by default, they must prove the genuine use through their evidence.
McDonald’s had registered BIG MAC on 22 December 1998 for a wide range of food items and associated services in classes 29, 30 and 42. In 2017, Supermac’s applied to cancel the mark on the grounds there had not been genuine use for a continuous period of five years since registration.
McDonald’s did submit evidence of use, including witness statements providing sales figures and packaging together with promotional material and website extracts, focussing on the German, French and English markets. However, the EUIPO criticised McDonald’s evidence for the following reasons:
- Affidavits from McDonald’s employees would be given less weight, in the absence of other independent evidence.
- Printouts from websites showing the use of the trade mark BIG MAC was not sufficient if the website did not also show the place, time and extent of use, or if this information was not provided.
- No information was given on how brochures etc were circulated, who they were offered to, and whether they led to any actual/potential purchases.
- Wikipedia evidence on the history of the Big Mac was unreliable as a source of unsupported information.
McDonald’s has subsequently faced another attack from Supermac’s, this time against its EUTM for Mc. In this case McDonald’s was able to show genuine use for some goods including “chicken nuggets”, but the mark was nevertheless revoked for broader food and drink related goods and services.
Brand Extension and Indirect Confusion
When choosing a brand for a new product or business, it is important to take into account the risk of both direct and indirect confusion with earlier trade marks. Indirect confusion tends to arise in three main scenarios:
- Where the two marks share a common element that is so strikingly distinctive that the average consumer would assume that no one other than the original brand owner is using it in a trade mark at all, e.g., “26 RED TESCO”.
- Where the later mark simply adds a non-distinctive element to the earlier mark, e.g., a sub-brand or brand extension e.g., terms such as “LITE”, “EXPRESS”, “WORLDWIDE” and “MINI”.
- Where the earlier mark comprises a number of elements, and a change of one element appears entirely logical and consistent with a brand extension e.g., “FAT FACE” to “BRAT FACE”.
Virgin Enterprises Limited v Virginic, LLC was an example of the second type of indirect confusion. Virginic, a US cosmetics company promoting natural ingredients, applied for VIRGINIC in class 3 relating to cosmetic products. Virgin opposed the application relying on its earlier mark for VIRGIN, in class 3. After the UKIPO rejected Virgin’s opposition, it successfully appealed to the High Court, which identified a material error of principle by the Hearing Officer. Applying the level of confusion assessment afresh, the High Court ruled that indirect confusion was likely to arise, as there was a risk that the average consumer would perceive adding ‘–IC’ made VIRGINIC a ‘newly-minted adjective’ “of or pertaining to VIRGIN”. Accordingly, there was a fairly high degree of conceptual similarity between the trade marks. Further, the average consumer would be likely to think that VIRGINIC was a brand extension of VIRGIN, and therefore indirect confusion was established.
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Online infringement of EUTMs: CJEU confirms jurisdiction
Following an IPEC decision that had the potential to weaken enforcement strategies against online infringements of EUTMs, the CJEU issued a decision in 2019 that reassured brand owners. In AMS Neve v Heritage, the CJEU confirmed that a claim for infringement of an EUTM arising from advertising or the offer of products on a website may be brought in a Member State where the consumers or traders to whom that website is targeted are located. This reverses the finding of the IPEC, which had concluded that the claim for infringement of an EUTM (as opposed to a UK trade mark) had to be brought in the Member State where the defendant committed the alleged wrongful acts, and not where it had an effect.
AMS Neve, an English company making and selling audio equipment, brought infringement (and passing off) proceedings in the IPEC relying upon both UK and EU trade marks. The claim was against Spanish company Heritage, which sells and supplies audio equipment – in Spain and via its website. The Heritage website is written in English, has a ‘where to buy’ section including a UK distributor, and its terms of sale make it clear it will accept orders from EU member states.
The IPEC decided it could hear the UK trade mark infringement and passing off claim, arising out of use of an alleged infringing sign on Heritage’s website, which was arguably targeting the UK. However, it thought it did not have jurisdiction to hear the EUTM infringement claim and said that claim had to be heard in Spain. The Court of Appeal, whilst doubting the correctness of the IPEC’s approach, did recognise it had some support in recent CJEU case law. Accordingly, it referred questions to the CJEU on this point.
Under the EUTM Regulation, the default rule is that a trade mark owner should sue an alleged infringer for EUTM infringement in the EU Member State where that alleged infringer is domiciled (there are then a cascade of provisions that will apply where the defendant is not domiciled in a Member State). However, an EUTM owner can alternatively bring proceedings in the Member State where the act of infringement has been ‘committed or threatened’, in which case any remedies awarded will be limited to acts of infringement occurring in that territory, i.e., there will be no pan-EU relief.
The CJEU concluded that, in the case of website advertising and offers for sale, there will be relevant acts committed in the territory where the consumers or traders who are the target of that advertising or offer for sale are located, regardless of where the defendant or its server is established, or of the location of its products. This involves an assessment based on the content of the website as to whether the advertising and offers for sale target consumers or traders situated in the relevant Member State. The CJEU’s decision will assist rights holders in their enforcement strategies against online infringers, including where those websites are based outside of the EU.
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High Court ruling clarifies the legal position of parallel imports of medical devices
In Dansac and ors v Salts Healthcare Limited and ors, the High Court clarified the law relating to relabelled imported pharmaceutical and medical products following the 2018 ruling of the CJEU in Junek v Rauscher. In particular, the High Court’s decision provides guidance on when a parallel importer will be obliged to give prior written notice of its importation to the trade mark owner (under the criteria known as the ‘Bristol-Myers Squibb (BMS) conditions’ developed in that case by the CJEU). Where the goods are over-stickered, but there is no repackaging, it will only be necessary to notify the trade mark owner where the over-stickered label jeopardises the product’s guarantee of origin. As the judge said, both Junek, and now this decision, have the potential to represent a “major chink in the BMS regime”.
The claim is the latest in a long-running series of disputes relating to parallel imports of ostomy bags and related products. In an earlier dispute between the parties, the Court had found that failure to give notice under the fifth BMS condition meant that the relevant goods were infringing.
The Defendant imported the Claimant’s products from Spain and Italy into the UK market. Before the products entered the UK market, they affixed labels to the outside of the boxes, but did not otherwise open or interfere with the packaging. The Claimants’ case turned on whether over-stickered goods which had not been otherwise interfered with would be subject to the BMS conditions.
Birss J concluded that, if a box has not been opened and, provided an over-stickered label does not risk the guarantee of a product’s origin, the BMS conditions will not apply (and so notice will not be required to the trade mark owner). Accordingly, in over-stickering cases, a trade mark owner will need to show that some risk is posed to the essential function of their mark.
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Jewellery business sued for trade mark infringement: Lessons for luxury brand owners
In a case raising interesting practical points for brand owners, the IPEC ruled that a UK jewellery seller (JSC) was liable for trade mark infringement for selling links for charm bracelets made and sold by Nomination, an Italian jewellery business. JSC’s case was that Nomination had effectively consented to JSC’s use of its trade marks, but this argument was unsuccessful. Whilst the Court agreed that Nomination had, by selling Nomination charm bracelets, thereby consented to the onward sale of links for those bracelets, it also decided that Nomination nonetheless had legitimate reasons to object to JSC’s onward sale of links.
The case focused on JSC’s sale of individual links for Nomination bracelets (although they did not sell Nomination bracelets themselves), which had been sourced from Nomination bracelets sold by authorised retailers in Italy and Germany. JSC sold the Nomination links alongside links for their own Daisy Charm bracelets, in small plastic bags or blister packs.
The Court concluded:
- The sale of Nomination bracelets amounted to consent to the onward sale of individual links. Although Nomination claimed to have told its retailers not to disassemble bracelets and sell individual links, there was no contractual restriction to this effect. Further, when Nomination had discovered retailers selling individual links, it had done nothing to try and stop this.
- However, Nomination had legitimate reasons to object to JSC’s sale of individual links because its bracelets were sold in an “elegantly designed cardboard box”, presented in a “similarly elegant cardboard bag, closed by a ribbon” which would convey an image of luxury to purchasers. JSC, on the other hand, sold Nomination links in plastic bags. There was no question that this did not convey an impression of quality. The Court however rejected Nomination’s other arguments in relation to legitimate reasons including a) that JSC had failed to identify who had repackaged the goods and b) that repackaging the goods had placed the condition of the Nomination links at risk (arguments that are routinely successful in relation to imports of pharmaceuticals).
The case was heard by the Court of Appeal in January 2020, which dismissed the appeal.
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Choosing a brand: the importance of considering goodwill and reputation
The IPEC decision in Claridge’s Hotel Limited v Claridge Candles Limited and anr is 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, and consideration should be given to this prior to launch of a new brand.
Start-up company Claridge Candles was 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. However, Claridge Candles was partially successful in challenging the CLARIDGE’S 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 demonstrates the risk of relying in an infringement action 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.
However, Claridge’s did succeed in its claim for trade mark infringement based on its reputation. It established that its CLARIDGE’S 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, and 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.
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Court rejects passing off claim in purple inhaler case
In a lengthy decision, the High Court concluded that, through the get-up and packaging of its AirFluSal Forspiro inhaler, Sandoz did not pass its product off as being connected in the course of trade with Glaxo and/or as equivalent to Glaxo’s Seretide Accuhaler (a combination of salmeterol and fluticasone for the treatment of asthma and COPD in a dry powder inhaler). Glaxo’s Seretide Accuhaler product, on the market since 1999, is coloured two shades of purple and is sold in packaging featuring a shade of purple. Sandoz’s generic product, launched in November 2015, is largely coloured a shade of purple and is sold in packaging featuring a shade of purple. Both are prescription only medicines (and so promotion to patients is highly restricted), with prescriptions normally being written using the brand name.
The parties agreed that a loose colour convention had developed in the UK in relation to certain types of inhaler (e.g., for blue and ‘autumnal’ colours), thereby promoting familiarity for patients. The evidence from healthcare professionals was that they would not assume that any purple inhaler was Seretide, but would regard the colour purple as denoting the combination of salmeterol and fluticasone. As for patients, the Court concluded that, whilst they would understand the different colours would signify an inhaler containing differing types of medication, most would have little idea as to what the different types of medication were.
Glaxo’s passing off claim had two strands: (1) misrepresentation as to trade origin amongst patients, i.e., that Sandoz’s AirFluSal Forspiro inhaler was connected in the course of trade with Glaxo; and (2) misrepresentation as to equivalence of characteristics amongst healthcare professionals and patients.
The Court noted that it can be very difficult, although not impossible, for a claimant in passing off cases to establish that the shape or colour of a product or of its packaging is distinctive of them. Recognition and association will not be sufficient, in the same way as considered in relation to unconventional trade marks and acquired distinctiveness in Nestlé.
In order to seek to demonstrate goodwill in the colour purple, Glaxo relied upon a number of surveys that it had carried out amongst healthcare professionals - although its claim of passing off as to trade origin was limited to consumers. The Court identified a number of issues with the surveys, which underline the difficulties in producing a survey which complies with the relevant requirements. Further, there was no evidence of actual confusion amongst consumers.
Glaxo also argued that there was an extended form of passing off, as the AirFluSal Forspiro was not equivalent to the Seretide Accuhaler in relation to certain characteristics. Whilst the Court accepted it was less likely that any actual confusion in the minds of patients on these grounds would come to light, it concluded that there was no evidence that - for either healthcare professionals or patients - purple would denote to them an inhaler with the characteristics and delivery mechanism of Seretide Accuhaler.
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No likelihood of confusion between BEAUTY BAY and BEAUTY AND THE BAY
Beauty Bay (owner of UK/EU trade marks for BEAUTY BAY) brought trade mark infringement and passing off proceedings against Benefit, a global player in the beauty space, based in San Francisco. The claim concerned a Benefit Christmas cosmetics gift set launched in 2017 bearing the words: “Beauty and the Bay”. The Court rejected the claim and, whilst the decision contains no “new law”, it shows that the global assessment of trade mark infringement on the basis of a likelihood of confusion is not an exact science or a box ticking exercise. Instead, a holistic approach will be adopted and, sometimes, the results may be surprising.
Beauty Bay Limited is an online retailer of beauty products based in the UK. In Christmas 2017, Benefit had launched a range of gift sets with a San Francisco look and feel to celebrate its heritage. One of the sets was named ‘Beauty and the Bay’, which Benefit said was a play on words of ‘Beauty and the Beast’ and the bay of San Francisco. Beauty Bay claimed trade mark infringement and passing off in relation to its UK/EU trade marks for BEAUTY BAY/BEAUTYBAY.
The judge applied the test for trade mark infringement in the usual way. The goods and services in question were identical and he found that the marks BEAUTY BAY and BEAUTY AND THE BAY were similar to a medium degree visually and conceptually, and to a low degree aurally. The average consumer had an average degree of attention on the basis that the product cost £34.50 and would most likely be bought as gift. However, taking all of these factors into account in the global assessment, the judge found there was no likelihood of confusion. As a result, the trade mark infringement and passing off claims failed.
It is possible that the presence of the Benefit logo on the product packaging contributed to the Court’s overall finding of no likelihood of confusion. However, the judge did state that such use alongside the mark in question was not sufficient as it was much smaller in position and customers are used to seeing house/sub brands and collaborations in relation to beauty products; therefore, it was capable of performing the function of a trade mark and identifying origin of goods. There were also no instances of actual confusion, but the judge confirmed there is no requirement for there to be evidence of actual confusion from actual consumers.
The CBD consumer products boom – the risks considered
CBD (cannabidiol) consumer products are proliferating in a number of UK sectors, including retail, food and beverage, health & beauty, and hospitality. Businesses are actively exploiting the clear CBD opportunity, looking to capture any “first mover” advantage. There are, however, a number of issues to consider for any business planning to enter the CBD market. Manufacturers and sellers of CBD products should exercise caution, as the regulatory position remains unclear. Notwithstanding the popularity of CBD retail products, the legality of some CBD products remains unresolved, however presented.
From an IP perspective, as more businesses enter the CBD market, brand identity plays an ever-increasing role. Trade mark offices around the world all appear to be adapting to the relaxation of existing cannabis regulations, and permitting applications for CBD related goods and services, provided certain criteria are met.
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From east to west: Changes to trade mark regimes across the world
Changes to trade mark regimes in China and Canada came into effect in 2019, bringing good news for global brand owners. Developments in China will help with the enforcement of existing rights, while changes in Canada should streamline the trade mark application process.
China
China has long been a challenging jurisdiction for brand owners, particularly in facing bad faith applications, and infringing products. However, revisions to the law indicate a more optimistic future. In addition to a new e-commerce law requiring e-commerce platform operators to deal with IP rights infringements, an amendment to intellectual property laws, which came into force on 1 November 2019, deals with a number of issues, including bad faith applications. In particular, a trade mark application will be considered to have been filed in bad faith if it was made without an intention to use the mark.
The amended law also increases the maximum amount for statutory damages (which apply where the loss/profit is difficult to determine) from RMB 3 million to RMB 5 million, and the penalty for malicious trade mark infringement from three times the actual loss suffered by the earlier rights owner to five times this amount or the profits of the infringer.
Canada
Until recently, Canada was something of an outlier in relation to trade mark application procedure. However, on 17 June 2019, Canada acceded to a number of international treaties and made significant reform to its trade mark laws.
Joining the Madrid Protocol means that trade mark protection can be sought in Canada by making a single application (for a single fee) at WIPO for an International Registration. Canada can now be designated under such an application alongside any of the other 121 countries covered by the Protocol. Notably Brazil also joined the Madrid Protocol last year, with the system coming into force for Brazil on 2 October 2019.
Canada also joined the NICE Classification System, which requires applicants to classify the goods and services covered by their trade mark application. This change introduces a pay-per-class fee model.
Rules in respect of registering non-traditional trade marks such as colours, tastes, sounds, moving images and holograms have been clarified and align the Canadian regime with the EU’s approach. In addition, a number of important procedural changes to the application process have also been introduced.
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Project Zero: Amazon’s fight against counterfeiters
In 2019 Amazon launched ‘Project Zero’ in a bid to show the market that it is taking serious measures against counterfeiters.
This initiative appears to be in response to both: (i) negative press regarding the amount of counterfeit goods that can be purchased on e-commerce platforms and their response time in dealing with issues when flagged; and (ii) the lack of interest of luxury brands, and in some cases their explicit refusal, in having their products listed on Amazon. For example, in Coty (discussed in our December 2017 edition), the CJEU ruled that a supplier of luxury goods could prevent its authorised distributors from selling those luxury goods via third-party platforms such as Amazon. It appears that Amazon is trying to appeal to these luxury brands (who are generally the most counterfeited) by promising to deliver on active counterfeit monitoring and empowerment to brand owners.
Project Zero has three prongs of attack:
- Automated Protection Measures
Amazon says that its “machine learning expertise” scans listings and proactively removes suspected counterfeits, using data provided by brand owners.
- Self-service by brand owners
Brand owners who sign up to Project Zero will be given administrative privileges on Amazon which will allow them to instantaneously take down listings which they believe to be counterfeit.
- Serialisation of products
Amazon offers an optional ‘pay per product’ service (approximately $0.01 - $0.05 per unit based on volume) to scan and confirm the authenticity of a brand’s products when they are sold on Amazon.
The project was extended to the EU in August 2019. Currently, whilst free to join, Project Zero is ‘invite only’ and there is a waiting list - perhaps to try and entice the more luxury brands to join this ‘exclusive club’.