Reported Trade Mark and Copyright Cases for September 2003

17 September 2003

Katharine Stephens

Trade Marks

Delivery Up and Destruction

Miller Brewing Co v. Rhui Enterprises Ltd & Anr (Neuberger J.; [2003] EWHC 1606 (Ch); 23.5.03)

The claimant was the proprietor of a number of UK and Community trade marks consisting of or including the word MILLER in respect, inter alia, of beer. It had licensed a third party to brew and bottle Miller Genuine Draft beer in Jordan and to distribute the bottled beer in the Middle East. This party, at least on one occasion, produced beer of an inferior quality. This “lousy” beer found its way to Mersey Docks, Liverpool, en route to Belfast. The claimant applied for and obtained an injunction restraining the defendants from dealing in the “lousy” beer. This subsequent application dealt with a number of issues of which only one is reported here. The claimant wanted delivery up and destruction of the beer. The defendants contended that an application under section 19 (disposal) could only be made once an application under section 16 (delivery up) had been made, determined and executed. The judge held that an application under both sections could be made in one application, although he accepted that this strained the meaning of section 19(1) somewhat. His opinion was reinforced by commercial common sense. It would not be sensible to require a claimant to make two applications to court, firstly, for the delivery up of the goods pursuant to section 16 and then a second application for destruction or forfeiture. 

Indication of Geographical Origin

Gerolsteiner Brunnen GmbH & Co. v Putsch GmbH(A.G. Opinion; Case C-100/02; 10.7.03) (decision not in English)

The Claimant, Gerolsteiner Brunnen GmbH & Co. markets mineral water and refreshing drinks in Germany under the GERRY mark which it owns. It started proceedings for trade mark infringement against Putsch GmbH. Putsch mineral water and refreshing drinks carry labels that include the terms “KERRY SPRING” to indicate that the water used for making these refreshing drinks originates in County Kerry in Ireland.

The Bundesgerichtshof in Germany referred to the ECJ the questions:

Is Article 6(1)(b) of the Trade Marks Directive applicable where a third party uses geographical indications in the manner of a trade mark? and

If Article 6(1)(b) is so applicable, is the use of such indications in the manner of a trade mark a factor to be taken into account in examining whether such use conforms to honest practices in industrial and commercial matters?

In respect of the first question A.G. Stix-Hackl established that the central issue was whether limitation on the rights of the trade mark proprietor in Article 6(1)(b) is applicable equally when the use in question is exclusively a descriptive use or does it also apply when the use of that sign serves to distinguish the goods or services of competitors.

The A.G. elaborated on the Windsurfing, (C-108/97 and C-109/97), BMW, Hölterhoff (C-2/00) andArsenal (C-206/01) cases. The Arsenal decision made it clear that a proprietor cannot prohibit the use of an identical sign for identical products if such usage does not prejudice the proprietor’s interest as owner of the mark and does not prejudice the function of the trade mark as indicator of origin. Accordingly, in the A.G.’s Opinion, the legality of usage of a sign for purposes other than for distinguishing the goods and services of one enterprise from another cannot be drawn from Article 6; such usage does not fall within the protection of Article 5. In other words, the applicability of Article 6 cannot depend on whether the use of the sign is use in the manner of a trade mark.

Disregarding the relevance of the Windsurfing decision in this case, the A.G. maintained that what the Court stated in that case was that when a geographical name is registered as a trade mark, third parties may not use it as a trade mark but they may use it in a descriptive manner only.

The A.G. pointed out that Article 6 is directed principally at reconciling the fundamental interests of protecting the rights of a trade mark and the rights to the free circulation of goods and free presentation of services on the common market. 

In respect of the second question, the A.G. concluded that from the wording of Article 6 and its proviso, it follows that not all usages in the manner of a mark are permitted. In its BMW judgment the Court has defined this as an obligation of fairness towards the legitimate interests of trade mark owners. According to the A.G., whether a use conforms to honest practices in industrial and commercial matters depends on two elements, namely whether there exists a risk of confusion between the competing marks and the manner in which the latter sign is used.

Accordingly, one must consider in each case the actual circumstances as well as the interests of the parties. The A.G. concluded there is a strong connection between the manner in which a sign is used and the aim of such use. If there is reason to suspect that an indication of the source of mineral water is used to attribute or associate such products to a specific enterprise and not simply to indicate the geographical provenance of the mineral water, then such usage is not purely descriptive but also use as a mark. Hence when assessing whether a particular usage is in accord with honest practices in the sense of Article 6(1)(b), one must take into account the manner in which an indication is used, including for example the degree of similarity of the indication with the registered trade mark, the intensity of utilisation of the indication and the perception of the public of the utilised indication as a trade mark.

Similarity – Risk of Confusion

Jose Alejandro SL v Office for the Harmonisation of the Internal Market(CFI; T-129/01; 3.7.03)

The applicant applied to register the mark BUDMEN as a community trade in respect of orthopaedic footwear (Class 10), stationery and packaging materials (Class 16) and clothing, footwear and headgear (Class 25). An opposition was filed against all the goods covered by the application on the basis of earlier national trade marks for BUD registered in Denmark, the UK and Ireland.

The Opposition Division partially upheld the opposition and refused registration for the goods in Class 25. On appeal the First Board of Appeal dismissed the appeal against the Opposition Division's decision on the basis that there is a likelihood of confusion in the mind of the public owning to the fact that the goods designated by the mark claimed and the earlier registered marks were identical and the fact that the conflicting signs BUD and BUDMEN were visually, phonetically and conceptually similar. 

This decision was further appealed to the CFI. The Court held that according to case law, the likelihood of confusion on the part of the public must be assessed globally taking into account all factors relevant to the circumstances of the case. The perception of the marks in the mind of the average consumer of the goods or services in question also plays a decisive role in the global assessment of the likelihood of confusion. In the present case the products in question are general consumer goods, therefore the relevant public was the average consumer in Denmark, Ireland and UK. The CFI also noted that that the first syllable of the CTM application was identical to the only syllable of the earlier registration and that the only difference was the CTM application second syllable MEN. Important was also the fact that the earlier national marks were included in its entirety in the CTM application. In respect of the suffix MEN, the Court held that it must be viewed as an ancillary element to the first and dominant element (BUD). Furthermore, the term MEN is likely to carry a suggestive or even descriptive connotation for the relevant public that the clothing, footwear and headgear covered by the mark are intended for male customers.

It also noted that it is common in the clothing sector for the same mark to be configured in various different ways according to the type of product which it designates. It is also common for a single clothing manufacturer to use sub brands to distinguish its various lines (women's, men's and youth). In such circumstances it is conceivable that the relevant public may regard the clothing designated by the conflicting marks as belonging to two distinct ranges of products but coming from the same undertaking.

Finally, the fact that the CTM application was registered in Spain despite an opposition by the opponent on this proceeding was not relevant to this proceeding as the relevant territories in this case were Denmark, Ireland and UK.

Furthermore, the fact that there were other Community and international trade mark registrations containing the mark BUD in respect of Class 25 was irrelevant for the purposes of examining the likelihood of confusion between the conflicting marks in this case.

Design Right

Lambretta Clothing Co Ltd v. Teddy Smith (UK) Ltd & Anr(Etherton J.; [2003] EWHC 1204 (Ch); 23.5.03)

Lambretta claimed relief for infringement of design right in the design of a track top and copyright in two documents incorporating drawings and specifications for the track top. The judge held that design right did not exist in the track top and, under section 51 of the CDPA, it was not an infringement of copyright in the documents to copy the track top. Had it not been for section 51, however, he would have held on the evidence that the first defendant, but not the second defendant, had indirectly copied a substantial part of those documents.

Design right did not subsist in the shape of the track top, which was perfectly standard, nor in the logos and stripes on the sleeves which constituted surface decoration. However, Lambretta submitted that design right subsisted in the arrangement of the colour ways on the track top, being an aspect of the configuration of the article. The judge held that the meaning of “configuration” refers to the relative arrangement of three-dimensional elements. Therefore, design could not subsist in two dimensional elements such as the colour finish. This was consistent with the use of the word in the Registered Designs Act 1949.

Under section 51, the judge accepted the defendants’ submission that the words should be given their common meaning. Thus, the drawings recording the shape and configuration of the Lambretta track top were “design documents” recording a design for something other than an artistic work or typeface, namely a track top. It followed that it was not an infringement of copyright in those documents to copy the Lambretta track top. Lambretta submitted that, insofar as the design documents recorded matters excluded from design right, such as surface decoration or as in this case, colour ways, those continued to enjoy copyright protection in the same manner as they had done before the commencement of the 1988 Act. The judge did not accept this submission. It was not the intention of Parliament to protect designs by either design right or by copyright, the two being mutually exclusive. Section 51 dealt solely with the application of copyright where a three-dimensional article was involved. Further, section 51 was directed to the infringement of copyright in the entire design document which had to be regarded as a whole and not in parts. Lambretta’s submissions would appear to undermine that established principal by notionally dividing the design document into parts. In this case, trying to divorce the colour ways from the shape of the track top would give rise to an impossible legal task. It followed that Lambretta had no basis for alleging infringement of copyright in their drawings.

Copyright and Confidential Information

X Ltd v. Nowachi & Nowachi (t/a Lynton Porcelain Co. (Mr C. Floyd QC; [2003] EWHC 1928 (Ch); 1.8.03)

A preliminary issue arose of which only part is reported here. The deputy judge held that an equitable duty of confidence applied to the following: the names of customers and end-users (whether identified on the porcelain manufactured by the defendant for the claimant or not); whether the customer was new or existing in combination with the identity of the customer; the fact that the claimant contracted out to the defendant (since both parties portrayed themselves to customers as a single entity); and samples and products for specific orders. The defendant argued in relation to the first category that such information had ceased to be protected under the springboard principle (i.e. an injunction of a perpetual nature should not be granted because the information was in the public domain and had only gained the necessary quality of confidence because it had been gathered together as a package and communicated in confidence). The deputy judge held that there was no question of confidence in the information having expired under the springboard principle because it was not accessible to the public at all.

The deputy judge also held that copyright existed in a modified crest forming part of the back stamp which was applied to the underside of the porcelain. Sufficient original skill and artistic labour had gone into simplifying and modifying the crest in order for it to be suitable for reproduction as a back stamp. Further, copyright of an extremely limited scope existed in the layout of the back stamp (which comprised the crest and the following words “specially made for [ ] by [the claimant] finest bone china made in England”). The layout involved a choice of a number of different fonts and their use in combination with the crest. The composition went further into the field of graphic design than mere typographical arrangement and therefore copyright existed in the work as a whole. However, it gave no rights to the words or phrases themselves.

Commissioning Copyright Works

Gabrin v. Universal Music Operations Ltd & Anr (Patten J.; [2003] EWHC 1335 (Ch); 17.6.03)

Mr Gabrin claimed infringement of copyright in a photograph of the singer of Elvis Costello which he had taken in 1977. He also claimed infringement of copyright in a silk-screen print of the singer based on the same photograph. In 1999, the first defendant used the screen print on the front of a booklet accompanying a CD album entitled “The Very Best of Elvis Costello”. The case based on the photograph was successful. The case based on the screen print failed because title had not passed to Mr Gabrin.

The case was governed by the Copyright Act 1956. The judge was satisfied that Mr Gabrin was the owner of the copyright in the photograph, unless the photograph had been commissioned, in which case the commissioner was entitled to the copyright under section 4(3). The defendants’ case was that Mr Gabrin was paid a fee of £50 for the photo shoot to cover his time, effort and expenses and, regardless of whether any of the photographs came to be used, this was a commission within the meaning of section 4(3). The judge accepted that, in one sense, the photo shoot was commissioned. However, section 4(3) only applied if the paying party commissioned the taking of the photographs and had agreed to pay or paid for the photographs in advance. None of the evidence in this case indicated that there was any agreement to pay for the photographs as such. The fee offered to Mr Gabrin for the shoot was either reimbursement for his expenses or, at most, that plus a small additional amount. Furthermore, the people at Elvis Costello’s then record company, Stiff Records, had not agreed to buy, nor thought they were buying, the photographs. The process of selection by which Stiff Records selected the photographs it wanted to use was quite inconsistent with that. (If Stiff Records wanted to use a photograph on a record sleeve, it had agreed to pay an additional price, for which it also acquired the copyright.) The judge went on to hold that, even were he wrong in relation to whether the shoot amounted to a commission, he was satisfied that it was agreed between Stiff Records and Mr Gabrin that Mr Gabrin would retain copyright in the photographs he took which were not purchased for use on record sleeves. Since the photograph in issue was not one of these, it followed that Mr Gabrin had at all material times remained the owner of the copyright in the photograph. 

Licence of Copyright Work

Confetti Records & Ots v. Warner Music UK Ltd (t/a East West Records)(Lewison J.; [2003] EWCH 1274 (Ch); 23.5.03)

Confetti is a small record label and the owners of a track called “Burnin”. The defendant accepted that it copied “Burnin” by incorporating it into a track on a album entitled “Crisp Biscuit” mixed by the Heartless Crew. It also accepted that “Burnin” was not used in its original form. Lewison J. held that the defendant was contractually entitled to use the track. 

The principal defence was that the defendant was licensed to produce “Burnin” by signing a deal memo which amounted to a binding contract. This deal memo was headed “Subject to Contract”. The judge held that the circumstances in this case did not displace the normal meaning which prevented an agreement so headed from becoming a binding contract. Furthermore, the phrase “Subject to Contract” did not have a special meaning within the music business differing to its conventional meaning. No contract was created by the signature of the deal memo.

However, in the alternative, the defendant submitted that when Confetti sent the track “Burnin” and the accompanying invoice, that constituted an offer which it, the defendant, accepted by its conduct in making use of the track i.e. this was a unilateral contract in the sense that the offer could be accepted by conduct which did not have to be communicated to the offeror. The judge accepted this submission. The invoice described the services for which it was raised in the past tense: ““Burnin” … Licensed to “Crisp Biscuit”. Granted for three years non-exclusive”.  Further, Confetti knew that in order to achieve the release date, the defendant would have to start recording and mixing of the album shortly after receipt of the track and invoice. Since clearance was such a key question in the industry, once the defendant had received clearance, it would be the expectation of the parties that the defendant would proceed to use the track on the album. Although Confetti had tried to revoke the offer, the album was by then mixed and it was too late.

In the alternative, the judge held that the sending of the track, as a cleared track, together with the invoice carried with it a bare licence to reproduce. Although such a licence was, in principal, revocable, once the defendant had changed its position detrimentally in reliance upon the licence, it could no longer be revoked i.e. the claimant was estopped from denying the existence of the licence. Thus, by the time that Confetti made it clear that they did not want the track included on the album, it was too late to resile from the representations that they had made. 

Finally, the case to derogatory treatment of the track failed. First, it was said that the treatment was derogatory because all coherence of the original work had been lost as a result of the overlay of the track with a rap. Second, it was said that the words of the rap “String dem up one by one”was an invitation to lynching. It was by no means clear that the words on the rap were in fact“String dem up” but even if they bore the meaning that the claimants attributed to it, the judge did not infer any prejudice from the words. The fundamental weakness in this part of the case was that the judge had no evidence about the original composer’s honour or reputation. The composer had not made any complaint himself and, in the absence of a complaint, the judge did not consider that he should infer prejudice on his behalf.

Damages for Breach of Settlement Agreement

Experience Hendrix LLC v. PPX Enterprises Inc* (Peter Gibson & Maurice L.JJ., Hooper J.; [2003] EWCA Civ 323; [2003] E.M.L.R. 515; 20.3.02)

As this case has now been reported, only a brief summary is given. The judge at first instance held that the defendant was in breach of a settlement agreement by issuing recordings which were not on a list of licensed recordings contained in the agreement. An injunction was granted, but the claim to an account of profits and damages was dismissed. The Court of Appeal upheld the decision in relation to the account of profits – this was not an exceptional case justifying such an award – but overturned the decision on damages. The intention of the settlement agreement was clear. The non-licensed recordings were not intended to be issued to the public. The claimant was entitled to such sum as might reasonably have been demanded as a quid pro quo for agreeing to allow the defendant to enter into agreements to issue copies to the public. The royalty rate should be considerably in excess (perhaps double) of the rate payable under the settlement agreement for the licensed recordings. 

Reporters’ note: Websites at which those decisions marked with an asterisk can be found are as follows:

Writtren by Katharine Stephens and Cristina Garrigues.