Reported Trade Mark and Passing Off Cases for May 2002

28 May 2002

Katharine Stephens


Trade Marks

Decisions/opinions of the ECJ are available at http://curia.eu.int/en/jurisp/index.htm.
Court decisions marked with an asterisk are available on the Court Service website www.courtservice.gov.uk/judgments/judg_home.htm.

Parallel imports

Boehringer Ingelheim KG & ots v. Swingward Ltd & ots; Merck, Sharp & Dohme GmbH v. Paranova Pharmazeutika Handels GmbH*  (ECJ; C-143/00 and C-443/99; 23.4.02)

These two cases relate to the repackaging of authentic drugs and their importation into the UK and Austria respectively.  The manner of repackaging varied.  Some of the products had been overstickered by the defendants, some had been reboxed sometimes using the registered trade mark for the product on the outside of the box and sometimes not.  The claimants in both cases claimed that these activities infringed their trade marks.  There was no question that the quality of the goods had been affected by what the defendants had done.  

Laddie J. had referred cases C-143/00 from the UK.  At first instance ([2000] FSR 529), he held that the defendants had not harmed or put at risk the specific subject matter of the trade mark rights.  Therefore, since reboxing was necessary to overcome the resistance of the market to overstickered products, what the defendants had done was necessary to secure the free movement of goods.  The reference was made because (i) there appeared to be a conflict between the various ECJ cases on the repackaging of products (in particular between the Hoffmann La Roche case [1978] ECR 1139 and the Bristol Myers Squibb case [1996] ECR I-3457) and (ii) Laddie J. considered that the requirement of advanced notice of repackaging to be intellectually unsound. The court in the Austrian case C-443/99 also queried the apparent inconsistencies in the ECJ case law.

The first issue which the ECJ considered was the specific subject matter of the trade mark and, in particular, whether it was possible to take the view that repackaging is prejudicial to the specific subject matter of the trade mark and could be opposed per se.  The Court, following its case law, held that it was not possible to take this view. Instead, a trade mark proprietor can rely upon his rights to prevent repackaging by a parallel importer unless, by exercising those rights, he contributes to the artificial partitioning of the market.  If the repackaging is necessary to enable the product to be marketed in the state of import and it is done in such a way that it respects the trade mark proprietor’s rights, to oppose the parallel importation of that repackaged product will lead to artificial partitioning of the market and will thus be a restriction on trade.

The Court then considered in what circumstances repackaging would be considered necessary to enable the product to be placed on the market in the state of importation. There was a distinction between repackaging which was necessary to comply with national rules and repackaging solely to give the parallel importer a commercial advantage.  The proprietor could not object to the former, but could object to the latter.  In this case, the parallel importer argued that repackaging was necessary because of consumer resistance to relabelling.  The ECJ pointed out that consumer resistance did not always constitute an impediment to effective market access.  However, where there was strong resistance by a substantial proportion of consumers, that should be held to be a hindrance to effective market access.  What was necessary was an objective test and one which the national courts had to ultimately decide.

Finally, the Court held that reasonable advanced notice of the repackaging had to be given by the parallel importer to enable the proprietor to react to the intended packaging.  In each case it was up to the national court to decide whether the notice period was sufficient.  However, the Court indicated that where notice was given, together with a sample of the intended packaging, 15 working days would appear reasonable.

Aventis Pharma Deutschland GmbH v. Kohlpharma GmbH & anr*  (Opinion of A.G. Jacobs for the ECJ; C-443/00; 7.3.02)

Aventis is the manufacturer of an insulin product (Insuman Comb 25 100 IU/ml suspension for injection).  It holds, pursuant to Regulation (EEC) No 2309/93 laying down Community procedures for the authorisation and supervision of medicinal products for human and veterinary use and establishing the EMEA, separate central marketing authorisations for (1) packages containing 10 x 3ml cartridges and (2) packages containing 5 x 3ml cartridges.  Aventis markets its product in Germany in packages of 10 and in France in packages of 5.  The defendants import the product from France, repackaging it for the German market into packages of 10.  Aventis objected, stating that all that the defendant should do was double up the packs of 5, overstickering as necessary.

The Landgericht, Köln referred two questions to the ECJ.  In the first, it essentially asked whether, where a medicinal product is the subject of two separate central marketing authorisations as described above, it was permissible for that product to be marketed in a double pack consisting of two packages of five units.  A.G. Jacobs was of the opinion that, because of the terms of the marketing authorisation, the product could not be lawfully marketed in a bundle of two packages of 5 units. In its second question, the Landgerict sought guidance on the meaning of the word “necessary”.  A. G. Jacobs gave the same opinion as he had done in C-143/00 and C-443/99 (see ECJ decision in those cases, above).

Passing Off

Premier Luggage and Bags Ltd v. The Premier Company (UK) Ltd  (Chadwick, Evans, Henry L.JJ.; 26.3.02)

The Court of Appeal allowed the appeal by the defendant against the finding of passing off and, in part, against the finding of trade mark infringement ([2000] ETMR 49). In passing off, the relevant question was not whether there was a risk of confusion because the defendant’s name was similar to the claimant’s; the relevant question was whether the defendant’s use of his name in connection with his goods or his business would be taken as a representation that his goods or business were, or had some connection with, the goods or business of the claimant, giving rise to harm, or the risk of harm, to the goodwill and reputation which the claimant was entitled to protect.  The judge referred to “considerable” evidence of confusion.  However, to the Court of Appeal, it was apparent that those telephoned by the defendant’s sales staff and told they were from “Premier”, “Premier Luggage” or “Premier Luggage Company” had not been misled into business with the defendant believing it to be the claimant. In relation to the one customer who, on the judge’s finding, was misled into believing that the products were that of the claimant by the swing tags on the defendant’s products which bore the logo “pcl” and the name “The Premier Company (UK) Limited”, the Court of Appeal held that the judge had not asked himself the relevant question. Therefore, and since the Court of Appeal was in as good a position as the judge to form an opinion as to whether the swing tag was likely to mislead or not, the Court of Appeal reversed the finding of the judge.

The claimant had registered PREMIER for luggage and the like.  The Court of Appeal upheld the judge’s finding that oral use of the word “Premier” by the defendant’s salesforce was an infringement under section 10(1).  However, oral use of “Premier Luggage” and “Premier Luggage Company” was not an infringement under section 10(2)(b) – the test was different to that for passing off, but the Court’s findings in relation to the latter were relevant. In relation to the swing tags, because there was no passing off, the own name defence succeeded.  Finally, the Court of Appeal upheld the finding that the mark was validly registered; it was capable of being a trade mark under section 3(1)(a) and, under sections 3(1)(b) and 3(1)(c), it had acquired distinctive character. The judge had applied the correct test when he considered whether the evidence established that the average consumer (including both trade purchasers and members of the public) would appreciate that PREMIER was not used in a laudatory sense but as distinctive branding of the products.

Edmund Irvine & anr v. Talksport Ltd* (Laddie J.; 13.3.02)

In 1999, Talksport, which ran Talk Radio, a commercial radio station, decided to generate interest in its change of direction away from news and towards sport by sending promotional material to a number of persons responsible for placing advertisements.  One promotion included a flyer featuring a photograph of Eddie Irvine on the front holding a radio with “talk radio … we’ve got it covered” printed underneath.  The photograph had been doctored – Mr Irvine had been holding a mobile ‘phone when photographed.  The promotion was timed to coincide with the FIA Grand Prix World Championship.  Mr Irvine had not given permission to Talksport to use the photograph.

The first question Laddie J. had to decide was whether such a case of false endorsement fell within the law of passing off.  The most recent endorsement case in England was McCulloch v. May (1947) 5 PRC 58 in which the court found against the plaintiff because there was no common field of activity. Laddie J. held that the narrow line taken in that case no longer applied such that nothing would prevent an action for passing off succeeding in a false endorsement case.  However, to succeed, the claimant would need to prove that, at the time of the acts complained of, he had a significant reputation and, secondly, that the actions of the defendant gave rise to a false message which would be understood by a not insignificant section of his market that his goods had been endorsed, recommended or approved of by the claimant.

Mr Irvine was successful in proving both points.  In 1999, he was possibly at the peak of his career, was extremely “hot property” in the field of motor racing and was well known by name and appearance to a significant part of the public.  The flyer gave the impression that Mr Irvine endorsed the product.  The intention of the defendant was also relevant – a point on which there was no evidence.  However, Laddie J. concluded that there must have been an intention to convey to the audience that Mr Irvine endorsed and listened to Talk Radio.

Kevin Floyd Sutherland & ors v. V2 Music & ors  (Laddie J.; 22.1.02)

The claimants were members of a band called Liberty whose heyday had been in the mid-1990 when, although they had no recording contract and were not nationally recognised, it was likely that they had a reputation amongst that section of the public that liked funk music.  The defendants were members of a band, also called Liberty, who had been the runners up in the contest, Popstars.  The main issue in this action was whether the claimant’s reputation was sufficient to found a passing off action.  The defendants submitted that since the claimants were no longer functioning, they had nothing to lose by reason of the defendants’ activities.  Laddie J. rejected this submission on the law (see for example Ad-Lib v. Granville [1972] RPC 673 where residual goodwill had been protected).  He also rejected it on facts.  Although this case was very close to the borderline, the claimants were able to show that they had sufficient reputation; even if it did not sparkle as brightly as in the 1990, it still glowed.  Laddie J., therefore, granted the injunction to prevent the defendants from using the name Liberty.

Robert Smith & ors v. Beds Direct Nationwide Ltd (Neuberger J.; 14.12.01)

The claimants had used the name “BEDS DIRECT from Sleepers” in Southeast Wales since at least 1993.  The words “from Sleepers” were given much less prominence.  The defendant’s business had started in Swindon, but in 1999, it had opened a store in Cardiff called BEDS DIRECT.  The claimants succeeded in their claim to passing off.  They were able to show that, in the limited geographical area of South Wales, they had the requisite reputation in the name BEDS DIRECT.  The judge also held that there was sufficient confusion to establish passing off, in particular, there was one instance were a customer bought a bed from the defendant believing it to be the claimant to whom he had been directed.  The defendant unsuccessfully relied upon the relative descriptive nature of the mark to defeat the claim.  The judge accepted that BEDS DIRECT was more descriptive than some marks, but was of the opinion that it was not wholly descriptive.  Indeed, it was less descriptive than “Office Cleaning Services” (Office Cleaning Services v. Westminster Window and General Cleaners (1946) 63 RPC 39).  Finally, the fact that the claimant’s reputation was limited geographically did not defeat their claim, but meant that the injunction would only apply to a limited area.

Radio Taxicabs (London) Ltd  (t/a Radio Taxis) v. Owner Drivers Radio Taxi Services Ltd (t/a Dial-a-Cab) (J Randall Q.C.; 12.10.01)

The claimant accepted that its trading name, Radio Taxis, was generic and had not acquired a secondary meaning.  Rather, its case was that the defendant’s behaviour in registering the domain name radiotaxis.com and creating an automatic link from the web address www.radiotaxis.com  to its own website pages amounted to passing off. The judge held that the defendant did not intend to use the domain name to pass itself off as, or being connected with, the claimant or to divert its business.  The defendant, instead, intend to promote its services as a supplier of radio taxis, particularly internationally. The domain name was not, therefore, being used as an instrument of fraud (BT v. One in a Million [1999] FSR 1 CA).  Furthermore, there was no passing off. Although the claimant was able to show that it was most commonly known as Radio Taxis, it had failed to put in evidence as to how it was perceived by the public and consequently failed to discharge the burden upon it to show the requisite reputation. Taking into consideration the generic nature of Radio Taxis, the fact that there had been no confusion for the two years radiotaxis.com had been registered and the judge’s findings on motive, there was also no misrepresentation either.