In brief
- Post-sale confusion in trade mark infringement cases has been endorsed for the first time by the UK's highest court.
- This means that a claim can be won on the basis of confusion on the part of people who do not buy the goods bearing the infringing mark, but who, for example, merely see them being worn by others.
- In setting a relatively low bar for the nature of post-sale confusion – for example, it can be caused by only seeing the allegedly infringing sign from a particular angle – the Supreme Court may have also re-opened the door to "initial interest" (i.e. pre-sale) confusion.
- However, the bar has been raised for appellate courts to overturn a trial judge's factual findings – such as on the similarity of two marks and the likelihood of confusion between them.
Background
The UK's Supreme Court has handed down its decision in the trade mark infringement claim brought by Iconix, owner of the Umbro sports brand, against Dream Pairs, a Chinese producer of football apparel.
Umbro's logo, used widely across football apparel, but particularly on the side of football boots, is the "double diamond". It is registered as a UK trade mark, in the form in the two images shown on the left below. Dream Pairs uses the "DP" logo, which is also applied to the side of football boots, which it had (more recently) registered as a trade mark in the form shown on the right below.
High Court decision
Umbro alleged that the DP logo infringed its double diamond trade marks. At trial, Mr Justice Miles held that there was no likelihood of confusion between the two marks, when used for football boots, finding that there was “at most a very low degree of similarity” between them. Umbro's claim therefore failed.
Court of Appeal decision
The Court of Appeal overturned the judgment. The key bases for doing so were that the High Court Judge:
- reached an "irrational" conclusion (the necessary threshold to overturn a finding of fact, such as whether two marks are similar) that there was a very low degree of similarity between the DP logo and Umbro's trade marks;
- erred in principle by relying largely on a side-by-side comparison of the marks (as shown above), rather than considering them as affixed to footwear (as shown below);
- erred in principle by failing to appreciate that, in the post-sale context, people would see the DP logo from an angle, and in particular from head-height looking down (i.e. when someone observed Dream Pairs boots being worn by another), rather than side-on.
The Court of Appeal's findings on post-sale confusion were of particular interest. There was no question of actual confusion at the point of sale, owing to the fact that Dream Pairs boots were sold under a very different brand name to Umbro and largely through a dedicated Amazon webpage which bore no reference to Umbro. The evidence of a likelihood of confusion was all post-sale (when the boots were being worn), and the potentially "confused" people were not purchasers of the goods, but instead third parties who saw them being worn by the owner.
Supreme Court
The Supreme Court was asked to consider, for the first time, the issue of post-sale confusion (something which had been endorsed on several occasions by the Court of Appeal and the Court of Justice of the EU). It confirmed the Court of Appeal's approach, stating that the "global assessment" undertaken to determine whether there is a likelihood of confusion should include "realistic and representative" viewing angles of the DP logo as it appeared in use on goods. So, marks that might not be sufficiently similar on a side-by-side comparison can cross the "confusingly similar" threshold when in use on goods or services.
The Supreme Court rejected Dream Pairs' submission that confusion, in the post-sale context, must be of the sort that would jeopardise a trade mark's essential function as a guarantee of origin of the goods, at the point of the goods' subsequent sale (i.e. second-hand) or "in a subsequent transactional context". So, it is enough to show a risk of confusion on the part of third parties, who only see the goods being worn/used by someone else, even though they do not go on to make any purchase as a result of their confusion.
However, the Supreme Court nonetheless found ultimately in Dream Pairs' favour, on the basis that the Court of Appeal had been wrong to rule that the trial judge's conclusion, that the Umbro double diamond and DP logo were only faintly similar, was "irrational". A finding of irrationality is effectively saying that no reasonable judge could have reached this conclusion. The Supreme Court held that the judge had not only compared the signs side-by-side, but had also considered, and rejected, Umbro's submissions on the effect on the signs when viewed, in the post-sale context, from different angles.
Key takeaways
Given the Supreme Court's strong rebuke to the Court of Appeal for too readily interfering with the trial judge's assessment of similarity, we can expect appellate courts to be more reluctant in future to overturn a judge's findings on whether marks are sufficiently similar, or create a likelihood of confusion. In recent years, the Court of Appeal has shown itself willing to do this, so long as a "hook" could be found, in the form of some error of principle from the trial judge. Now, however, it will be even more crucial to win on these issues at first instance.
While this was an infringement case, the findings on post-sale confusion are also highly relevant to trade mark oppositions and invalidity actions. These tend to involve a side-by-side comparison of the two signs (existing registration versus mark applied for), with little regard to real-world use. Now, however, it is clear from the Supreme Court's judgment that not only real-world use, but also post-sale confusion, can be taken into account.
The Supreme Court's findings on post-sale confusion may re-open the door to claims based on "initial interest" confusion, i.e. confusion that arises before making a purchase (such as when first picking goods off a shelf in a shop), but which is dispelled before the point of purchase. Initial interest confusion had been firmly ruled out by the Court of Appeal over a decade ago in litigation between Interflora and Marks & Spencer. While the Supreme Court's judgment did not directly refer to initial interest confusion, if someone casually observing the goods being worn by a third party can have suffered the relevant type of confusion – despite not in any way acting on that confusion – so too, potentially, could a shopper who is confused into picking up the goods by the defendant's sign, promptly realises their mistake, but then decides to buy them anyway.