Trade mark infringement based on initial interest confusion in the UK

08 July 2011

Audrey Horton

Och-Ziff Management Europe Ltd & Anr v OCH Capital LLP & Ots (2010)

English High Court (Arnold J)

Och-Ziff succeeded in its claims against OCH Capital for passing off and trade mark infringement under Article 9(1)(b).  Its claims under Articles 9(1)(a) and Articles 9(1)(c) failed, as did OCH Capital’s counterclaim that the marks were invalid. 

Och-Ziff, an asset management group, was the proprietor of the Community trade marks, OCH-ZIF and OCH registered in Classes 9, 16 and 36, inter alia for financial services. Och-Ziff contended that OCH Capital, an investment management business established by Mr Ochocki, had infringed its marks by using six different signs featuring the letters “och” and also that this constituted passing off.  OCH Capital contended that the name OCH Capital was intended to be, and was, vocalised as “Oh-See-Aitch Capital” whereas Och-Ziff was pronounced “Ock-Ziff”.

OCH Capital counterclaimed that the OCH mark was invalid on the basis that Och-Ziff had acted in bad faith for the purposes of Article 52(1)(b).  The application had been made after Och-Ziff became aware of OCH Capital and to assist in its planned action against OCH Capital; but the defendant accepted that this did not in itself constitute bad faith.  The allegation of bad faith arose from the fact that Och-Ziff would have appreciated that the registration would cover both the name “Och” and the three letters “OCH” when used as an acronym.  The Court held that the fact that OCH has a potential dual significance did not make it illegitimate for Och-Ziff to seek to register it as a trade mark.  Och-Ziff had a perfectly legitimate interest in seeking to monopolise the use of OCH in relation to financial services.

Article 9(1)(a)
The Court held that purely internal use of a trade mark by its proprietor was not “genuine use” of that mark.  Considering in particular the Court of Justice’s judgment in Google France SARL v Louis Vuitton Malletier SA (C-236/08 – C-238/08), the Court held that OCH Capital’s use of the sign “OCH” in internal emails did not constitute “use” of the sign within the meaning of Article 9(1)(a) and even if it did, the use was not in any case use “in the course of trade” because the use was “as a private matter”.

The five remaining signs complained of used the word “capital” in conjunction with the letters “och”.  The Court held that OCH was highly distinctive and that CAPITAL was descriptive, or at least non-distinctive. However, the addition of CAPITAL to OCH was not so insignificant as to go unnoticed by the relevant average consumer and so the signs were not identical to the OCH mark.  There was therefore no infringement under Article 9(1)(a). 

Article 9(1)(b)
It was common ground that OCH Capital had used the signs in relation to services identical to some of those for which the OCH mark was registered.  The Court noted that in considering OCH Capital’s use of the sign, the Court must confine itself to consideration of the actual context and circumstances of such use and should not consider other possible types of use.  On this basis, the Court concluded that there had been only “initial interest confusion” (which he defined as confusion on the part of the public as to the trade origin of the goods or services arising from use of the sign prior to the point of purchase and, in particular, confusion arising from the use in advertising and promotional services).  The Judge held that “initial interest confusion” was actionable under Article 9(1)(b); the confusion did not have to take place at the point of sale.  He came to this finding both on a point of principle as well as on the authorities, in particular BP Amoco v John Kelly (2002), Whirlpool v Kenwood (2008) and a number of CJEU cases, most recently Case C-558/08, Portakabin v Primakabin.  Although there would be no diversion of sales in such circumstances, there were at least two other ways in which the trade mark proprietor might be damaged: firstly, a confusing advertisement may affect the reputation of the goods or services for which the mark was registered; and secondly, the confusion could be liable to erode the distinctiveness of the mark.
Given the distinctiveness of the OCH mark for financial services, the identity of the services and the non-distinctiveness of the word CAPITAL, the Court held that there was a manifest likelihood of confusion.  In relation to the OCH-ZIFF mark, the Court held that the defendant did not avoid a likelihood of confusion because of the inclusion of the suffix “ZIFF”; OCH retained an independent, distinctive role in both the mark and in the signs. 

OCH Capital’s “own-name” defence under Article 12(a) failed because OCH Capital’s use of the signs was not in accordance with honest, commercial practices since, for example, Mr Ochocki admitted that he has been vaguely aware of Och-Ziff before he set up OCH Capital and although Mr Ochocki was often called Mr Och because people had difficulty pronouncing his name, “OCH” was neither Mr Ochocki’s actual name nor an acronym of it.

Article 9(1)(c)
Although it was unnecessary for the Judge to rule on Article 9(1)(c), he nevertheless considered the claim on the assumption that there had been no likelihood of confusion and thus no Article 9(1)(b) infringement.  The Judge held that marks had the requisite reputation, that use of the signs gave rise to a link with the trade mark in the mind of the relevant consumer and that Och-Ziff’s best case on damage was to allege blurring.  However, since both the “OCH” and “ZIFF” elements of the mark were distinctive, a reduction in the distinctiveness of OCH would not affect the distinctiveness of ZIFF and it could not therefore be assumed that the distinctiveness of the combination would be reduced.  Thus, there was no Article 9(1)(c) infringement.

Passing Off
It was clear that Och-Ziff had a substantial reputation and goodwill in the name “Och-Ziff”.   The Court held that OCH Capital’s use of the signs complained of gave rise to a misrepresentation for similar reasons to those given in relation to the Article 9(1)(b) case, including initial interest confusion.  In relation to damage, the Court held that a misrepresentation leading to the belief that the defendant’s business was associated with the claimant’s was damaging to the claimant’s goodwill.  Further, if there was a misrepresentation which eroded the distinctiveness of the indication in question, then that was also damage for the purposes of a claim in passing off.  Both of these types of damage were found to be likely in the present case and accordingly the claim for passing off succeeded.