This month we report on trade mark renewal during oppositions in Anheuser-Busch Inc. v OHIM; Budějovický Budvar, which concerned an application for registration of 'Budweiser'. We look at Specsavers International Healthcare Ltd & ots v Asda Stores Ltd*, in which Specsavers did not succeed in its case of trade mark infringement and passing off against Asda, and we review Dyson Ltd v Vax Ltd in which Arnold J looked at what should be taken into account when considering the degree of freedom available to a designer.
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Trade mark renewal during oppositions
Anheuser-Busch Inc. v OHIM; Budějovický Budvar, národní podnik (CJ (Fourth Chamber); C-214/09; 29.07.10)
The CJ dismissed Anheuser-Busch’s appeal from the GC’s decision to uphold Budvar’s opposition (Case T-191/07, reported in the CIPA Journal, April 2009).
Anheuser-Busch applied for registration of BUDWEISER in Class 32 for beer, ale, porter, malted alcoholic and non-alcoholic beverages (the “Mark”). Budvar brought opposition proceedings based, inter alia, on three international marks set out below:
(the “Word Mark”) (the “First Figurative Mark”) (the “Second Figurative Mark”)
The Opposition Division initially upheld the opposition based on a likelihood of confusion under Article 8(1) between the Mark and the First Figurative Mark in Austria and France. The BoA reversed this decision, holding that the First Figurative Mark was not an ‘earlier mark’ as it had only been protected in those countries after the application for the Mark was filed. By a second decision, the Opposition Division once again upheld Budvar’s opposition but on the basis of a likelihood of confusion between the Mark and the Second Figurative Mark in Germany, Austria, Benelux, France and Italy. Having found that there was insufficient evidence of genuine use of the Word Mark, the Opposition Division limited its examination to the Second Figurative Mark. The BoA dismissed Anheuser-Busch’s appeal from this decision, but held, contrary to the findings of the Opposition Division, that proof of genuine use of the Word Mark had been established and the opposition could be upheld on the basis of the Word Mark. Anheuser-Busch appealed further to the GC on the grounds of late filing of a certificate of renewal by Budvar and insufficiency of the evidence of use filed by Budvar. The GC dismissed this appeal and Anheuser-Busch appealed to the CJ which also dismissed the appeal.
The Word Mark had become due for renewal after Budvar’s opposition had been filed. However, Budvar had only filed the certificate of renewal after the period for filing evidence to support the opposition under Article 42(3) had ended. Anheuser-Busch submitted that this was a breach of Article 42(3) in conjunction with Rules 16(1), (3) and 20(2) of Commission Regulation (EC) 2868/95 on the filing of evidence. The CJ disagreed, holding that those provisions contained nothing to suggest that an opponent should automatically provide, within the time period fixed by OHIM for evidence supporting an opposition, evidence of renewal of an earlier mark where the renewal occurs after notice of opposition had been filed. Although Rule 19(2) and (4) had subsequently come into force and required opponents to submit evidence of renewal within the specific time period set out under Article 42(3), those rules post dated the filing of Budvar’s opposition and could not be applied retrospectively.
Secondly, Anheuser-Busch submitted that the BoA should have exercised its discretion under Article 74(2) to disregard the evidence of renewal on the grounds of late filing. However the CJ disagreed, holding that as Budvar had been under no obligation to file the certificate of renewal within a particular time period, the discretion under Article 74(2) did not apply.
Finally, the CJ dismissed as inadmissible Anheuser-Busch’s submission regarding lack of evidence of genuine use of the Word Mark. Anheuser-Busch’s submission that the documents relied on were evidence of use of the First Figurative Mark rather than the Word Mark had not been raised before the GC and could not therefore be put for the first time before the CJ. Further, the submission could not be considered as a mere expansion of the pleading before the GC as there was insufficient connection between it and the question of whether there had been genuine use of the Word Mark and the two arguments served different purposes.
Evidence of “living dangerously” in trade mark infringement cases
Specsavers International Healthcare Ltd & ots v Asda Stores Ltd* (Mann J;  EWHC 2035 (Ch); 30.07.10)
With the exception of one instance of infringement under Article 9(1)(c) of the Trade Marks Regulation, Specsavers did not succeed in its case of trade mark infringement and passing off against Asda.
The action related to Specsavers’ word mark SPECSAVERS and the two logo marks:
A CTM similar to the mark on the above right but without the word Specsavers across it was revoked for non-use under Article 50(1)(a). It had never been used in the business as a logo by itself and adding the word Specsavers altered the distinctive character of the mark under Article 15(2)(a).
Specsavers complained about use of the following sign:
Mann J held that there was no infringement under Articles 9(1)(b) and (c).
Mann J found that a survey conducted by Specsavers did not assist its case. A court approved question was asked: “If I wanted to buy a pair of glasses made by Specsavers, do you know where is the nearest place I could get them?” Of those interviewed, 6% (15 people) identified Asda. The judge was critical of this question as it did not answer the question as to why the 15 thought the nearest Specsavers glasses were to be purchased at Asda. Further, Specsavers did not back up the survey with expert evidence.
Asda also put in evidence from a witness collection exercise. Specsavers objected to it on the basis that it was a survey which was not covered by a prior order. Although the judge held that it was a survey, he used his discretion to allow it to stand as evidence, only to find that it did not help much. It proved that 11 members of the public were not confused, but it did not prove how representative they were as they had been picked on the basis that they would give evidence.
There was also the evidence of “living dangerously”. Justification for considering the material came from the judgment of Robert Walker J in United Biscuits v Asda  RPC 513 in which he said that the court was not bound to disregard material which showed that the defendant had taken “a conscious decision to live dangerously”. Mann J held that there was a limited place for such evidence in support of a case for confusion. If there was clear evidence that an infringer adopted a sign because he thought it was likely to lead to some beneficial confusion with another mark, then that would be admissible, but not conclusive, in relation to the question of actual confusion. Such evidence would be as admissible as the evidence of a third party who was said to have been confused, but potentially of greater strength because it was likely to be an assessment by someone who had some expertise in the trade and who knew the market. However, the judge noted that he had to keep his eye firmly on the real question, which was whether, objectively speaking, confusion was sufficiently likely.
Mann J concluded on the evidence that Asda’s plan was to have a logo that at least had resonances to Specsavers’ logo. Its design team started from Specsavers’ logo and moved to what their lawyers told them was a safe distance. It was therefore in the bracket of “living dangerously” cases and provided support for the confusion case.
Mann J noted that, although Specsavers’ logo had always been used in the same green colour, its marks were not limited in colour. He therefore agreed with Asda’s submission that Specsavers were not able to enhance their case of infringement by requiring a comparison between the mark with a specific colour and the sign. Either both should be drained of colour or both be considered in the same colour.
Under Article 9(1)(b), Mann J held that there was a degree of similarity in that both logos comprised ovals with text inside, but that the degree was significantly lessened by the fact that the Specsavers’ ovals overlapped in a very characteristic fashion and Asda’s only touched. The ovals did not dominate so as to subordinate the wording in the marks/sign as a matter of overall appearance. That being the case, the Asda wording introduced a very significant difference between the sign and the marks which resulted in a very different overall impression being given.
The conclusion was reinforced by the context in which the sign was mostly used i.e. in the optical section of Asda stores and online. If the circumspect consumer was in an Asda store already, he would hardly make an association with Specsavers by virtue of two ovals with Asda written in one of them. A similar argument applied to the online use. By the time that a consumer encountered the logo online, he or she would have already entered an Asda site.
This conclusion did not differ in relation to the one instance where the colours were reversed i.e. white writing across green ovals. Again, the real difference related to the wording. Asda had its own reputation and the reasonably circumspect consumer would not think that the cards inviting people for eye tests came from Specsavers.
The “living dangerously” evidence did not change his view. It did not amount to evidence of an intention to confuse. Even if it was evidence of an intention to be close but not so close as to infringe, which was obviously a dangerous tactic, it was still evidence of an intention not to confuse because confusion would be dangerous.
The same conclusion and reasoning applied to the case on likelihood of association.
Under Article 9(1)(c), if it were not for the living dangerously evidence, the judge would not have found a link at all between the marks and sign. As stated above, he held that Asda’s design team thought there were resonances between the sign and the mark. The resonances were capable of amounting to “bringing to mind” the marks and therefore the necessary link was established. However, it was very weak and too slight to be unfair, notwithstanding that it might be thought to have been intended. There was no question of detriment arising.
Specsavers also claimed infringement by Asda’s use of two strap lines: “Be a real spec saver at Asda”; and “Spec savings at ASDA”.
The judge held that Asda could not avoid the words “spec saver” being the sign which had to be compared to the word mark, SPECSAVERS, because they occurred in a sentence. Their impact in the sentence gave them an additional life in comparison to the rest of the sentence and gave them the quality of a mark.
Under Article 9(1)(b), the judge held that “spec saver” and SPECSAVERS were closely similar; the notion of parody, which Asda wanted, would not work otherwise. However, context was everything and, in context, the “looking back” at the registered mark in the strap line did not generate confusion. Further, there was no evidence that Asda intended its advertising to cause confusion; it was a contrast or comparison which was intended.
One witness who testified for Specsavers believed that there was an economic association between Specsavers and Asda. However, the judge considered that her view was not that of the notional consumer. Instead it was a somewhat forced, perhaps over-intellectualised, view. The notional consumer would have expected a clearer rendition of the Specsavers mark in order for the the commercial connection to arise in their mind. Thus, there was no infringement of Article 9(1)(b) in relation to the first strap line. The attack in relation to the second strap line and the words “spec savings” was considerably weaker and failed.
Under Article 9(1)(c) and in relation to the recent case of Whirlpool v Kenwood  RPC 2, Mann J noted that the CA seemed to state that an advantage is rendered unfair if it is intended. The CA also left open the possibility that an unintended advantage may have a sufficient quality of unfairness about it to qualify. Here, there was a sufficient link between the sign “spec saver” and the mark SPECSAVERS, the use of the former giving Asda an advantage in that it acted as a reference point for its intended message i.e. you will get a better deal at Asda than at Specsavers. In so doing, it was clearly referencing people’s knowledge of Specsavers and its reputation for value. It also acted in a broader way to bring Specsavers to mind as a brand. Such use was intentional and took unfair advantage within Article 9(1)(c). The judge preferred the metaphor of “standing on shoulders” rather than “riding on coat-tails”, but the point remained. Asda did not escape infringement because its underlying theme was competitive advertising; here there was not a straight, verifiable objectively stated comparison but rather an intentional reference to Specsavers’ reputation by using its mark. Although the first strapline infringed because it took unfair advantage , its use was not detrimental to the repute of Specsavers’ mark.
The case in relation to the second strapline failed. A link existed, but it was much weaker than in relation to the first strapline. Further, it did not use the concept of Specsavers as a value provider so as to give it a leg up, as the first strapline did.
Finally, the passing off case failed. The judge held that since none of the signs individually gave rise to confusion, they did not give rise to a misrepresentation even when considering the cumulative effect of the signs, including colour, in store where they would make the maximum impact. In summary, the signs carried too much Asda branding.
Honda Motor Co. Ltd & Anr v David Silver Spares Ltd (“DSS”) (Mr G Leggart QC sitting as a Deputy Judge of the Chancery Division;  EWHC 1973 (Ch); 28.07.10)
In this parallel imports case, Mr Leggart QC dismissed DSS’s application to strike out Honda’s claim for trade mark infringement or, in the alternative, its application for summary judgment.
Honda owns various UK and Community trade marks for HONDA registered, inter alia, for motorcycle parts. DSS is the leading UK supplier of spare parts for Honda motorcycles. Honda claimed that DSS had infringed its trade marks by dealing in Honda motorcycle parts which, although genuine, had not been put on the market in the EEA by Honda or with its consent. DSS’s strike out application was made on the basis that Honda’s claim was entirely speculative and lacking in the necessary particularity.
The application raised two issues. First, as to who bore the burden of pleading and proving whether Honda’s trade mark rights had been exhausted, Mr Leggart QC held that it was sufficient for Honda to assert on reasonable grounds that DSS had used its trade marks within the EEA in relation to goods for which the marks were registered and that Honda had not consented to such use. It was then for DSS to make good a defence of exhaustion by pleading and proving that the requirements of Article 7(1) were met. The exception to this general pleading rule in Case C-44/00, Van Doren v Lifestyle Sports, did not apply since there was no proof that there existed a real risk of partitioning national markets, nor was the point pleaded in DSS’s defence. Honda had reasonable grounds for claiming that DSS was dealing in Honda motorcycle parts in the UK without Honda’s consent and this was sufficient to defeat DSS’s application.
Second, Mr Leggart QC found that although Honda’s Particulars of Claim might be cast in wider terms than was strictly justified, they were nevertheless sufficient to enable DSS to know the case that it had to meet. Rather than pointing to specific acts of infringement, such as a trap purchase, Honda had relied on “examples” of DSS’s infringing acts e.g. importing into the EU and offering for sale all the spare parts listed in DSS’s 2008 price guide and on its website and all the “vast stocks” of parts referred to in a DSS advert. There was no requirement in a parallel import case that the claimant point to a specific trap purchase in its Particulars of Claim.
Oracle America, Inc (formerly Sun Microsystems, Inc) v M-Tech Data Ltd & Anr* (Lord Neuberger MR, Arden & Tomlinson LLJ);  EWCA Civ 997; 24.08.10)
The Court of Appeal gave permission to appeal and upheld M-Tech’s appeal from the decision of Kitchin J to grant summary judgment ( EWHC 2992 (Pat), reported in the CIPA Journal, December 2009).
Oracle (formerly Sun) brought trade mark infringement proceedings against M-Tech for the importation into the UK from the USA of 64 disk drives. The trade marks were not exhausted as the goods had originally been put on the market in China, Chile and the USA. It had to be assumed that M-Tech would be able to prove the following pleaded facts as this was an application for summary judgment:
(i) There is a large independent market in Oracle’s second-hand computer hardware. Trade is global and the hardware is often traded several times. As a result, the location of the hardware or of the dealer is often not a guide to whether the hardware was first placed on the market in the EEA with the consent of the trade mark proprietor.
(ii) Oracle does not publish any information which would enable independent resellers to identify where a particular item was first put on the market. Oracle has deliberately adopted a policy of not publishing its database in order to make trade in genuine EEA-first marketed goods as difficult as possible. It aggressively pursues independent resellers for trade mark infringement if they have offered for sale any Oracle hardware which was first marketed outside the EEA. These practices deter the import of Oracle hardware by independent dealers, whether or not they were first put on the market in the EEA.
(iii) Oracle has made it a term of its agreements with distributors and resellers of its products that they must buy Oracle new and second hand equipment from within its supply network unless a particular item cannot be supplied from that network. In recent years, as a result of Oracle’s policy, trade in the independent network has largely disappeared.
The enforcement of Oracle’s rights as described in (ii) was the basis of M-Tech’s defence under Articles 28 and 30 EC Treaty (now Articles 34 and 36 of the Treaty on the Functioning of the European Union; freedom of movement of goods between member states) as it was said to effect the attainment of a single market in hardware first marketed by Oracle. Point (iii) above was the basis for M-Tech’s defence under Article 81 EC (now Article 101 TFEU; prohibiting agreements restricting competition within the EU).
Kitchin J held that M-Tech’s defences under Articles 28 and 30 involved reading a further exception to Article 5 into Article 7 of the Trade Mark Directive (TMD), that is, a proprietor could not bring infringement proceedings where it had adopted practices which might affect the free movement of goods within the EU. This was inconsistent with the right to control the first marketing within the EEA of goods bearing the mark. He also held that there was insufficient nexus between Oracle’s breach of Article 81 EC and the enforcement of its trade mark rights (Oracle had accepted for the purposes of the application that its agreements with its distributors in the EEA were contrary to Article 81).
The CA, Lady Arden giving the judgment of the court, held that there was a real prospect of establishing that Articles 5 and 7 should be interpreted by reference to Articles 28 and 30 EC and that a breach of Article 28 may well be established on the facts set out above which could not be justified under either Article 7 TMD or Article 30 EC.
In support of this, the CA noted that authorities such as Zino Davidoff Cases C-414 to 416/99 and Silhouette v Hartlauer Case 355/96 which set out the principle that Articles 5 and 7 represent a complete harmonisation on trade mark infringement, should arguably be restricted to the facts in those cases. Those cases did not deal with the facts set out at (ii) above. Further, the repackaging cases (which did not state that freedom of movement should only apply in the circumstance of such cases) and Van Doren v Lifestyle Sports, Case C-44/00, invoked Articles 28 and 30 EC.
As it was to some extent merely another way of putting the same point, the CA held that it was arguable that the rights conferred by Articles 5 and 7 were not immune from the doctrine of abuse of rights, as explained in Case C-255/02, Halifax v HMRC.
On the Article 81 issue, the CA held that it was arguable that Oracle’s agreements with distributors and resellers formed part of an overall scheme for excluding secondary traders from the market. Therefore, a sufficient connection might exist.
The CA, in referring the case back to the High Court, made it clear that the trial judge should consider making a reference to the CJ if M-Tech’s allegations were established at trial.
Test for infringement of a registered design
Dyson Ltd v Vax Ltd* (Arnold J;  EWHC 1923 (Pat); 29.07.10)
Dyson did not succeed in its UK registered design infringement action against Vax for importing and marketing its Mach Zen vacuum cleaner, despite persuading Arnold J that Dyson’s registered design should be entitled to a broad scope of protection due to the differences between the registered design and the prior art.
Dyson’s registered design was for a cylinder (rather than upright) vacuum cleaner based on Dyson’s two-stage cyclone dust-separation technology:
Vax’s Mach Zen cleaner was also a cylinder cleaner based on similar technology:
Arnold J held that although there were similarities between the registered design and the Mach Zen, the Mach Zen nevertheless produced a different overall impression on the informed user taking into account the restricted design freedom available to the designer due to the technical features of the Dyson design.
Dyson pointed to a number of similarities between its registered design and the Mach Zen, including: the inclined and transparent bin, the widely spaced large rear wheels with prominent wheel arches containing buttons, the sweeping and curved forward wheel arches and the long sweeping handle above the bin. Although Arnold J rejected Vax’s submission that the transparent bin should not be considered as part of the design because it was solely dictated by its technical function of viewing the contents of the bin, he held that the similarity was not, in any event, of great significance. Arnold J concluded the same in respect of the other features identified as similar, for example, noting that the large widely spaced wheels assisted in the stability of the device, but as the large wheels differed significantly in their look what similarity existed was not of great significance.
In forming his conclusions, Arnold J reviewed the case law on Article 7(1) of the Designs Directive (and also Article 8(1) of the Community Designs Regulation), which excludes from protection “features of appearance… which are solely dictated by technical function”. He noted that the CA in Landor & Hawa International v Azure  EWCA Civ 1285 had adopted the so-called “multiplicity-of-forms theory”, which only excludes from protection features which have no design freedom, i.e. there is only one form the feature may take due to its technical function. However, he also noted that the OHIM’s BoA in Case R 690/2007-3, Linder Recyclingtech v Franssons Verkstader had rejected this approach in favour of a less narrow exclusion where protection would be denied if the features of a product, or part of a product, were chosen exclusively for the purpose of designing a product that performs its function, i.e. if anything other than purely functional considerations would have been relevant when a specific feature was chosen then it would not be excluded. Arnold J favoured and adopted the latter approach.
Arnold J also looked at what should be taken into account when considering the degree of freedom available to a designer. He accepted Vax’s submissions that design freedom may be constrained by: (i) the technical function of the product or an element thereof; (ii) the need to incorporate features common to such products; and/or (iii) economic considerations (e.g. the need for inexpensive items). However, Arnold J held that constraints due to existing intellectual property rights need not be considered in this case as Vax had not adduced evidence of any such rights. Arnold J also accepted that evidence of design freedom could come from designs produced after the date of the registered design. However, the comparison of the overall impression of the allegedly infringing design with the overall impression of the registered design should be undertaken as at the date of the registered design not at the date of the alleged infringement.
Discontinuance of Threats Proceedings
Hoist UK Ltd v Reid Lifting Ltd* (Mr Roger Wyand QC, sitting as a Deputy Judge of the Chancery Division;  EWHC 1922 (Ch), 28.07.10)
Roger Wyand QC dismissed Hoist’s application for an order under CPR 38.6 that Reid be liable for the costs of its discontinued threats action.
Hoist had developed a gantry (the “Product”) which was exclusively distributed by Pfaff-Silberblau (“PS”). Reid became aware of the Product through a PS catalogue and wrote to PS stating that the Product infringed Reid’s intellectual property rights. PS removed the Product from sale and informed Hoist about Reid’s claims. Reid subsequently wrote to Hoist asserting design right infringement and Hoist issued groundless threats proceedings under Section 253 CDPA 1988. By its defence and counterclaim, Reid alleged unregistered design right infringement in features of the gantry and copyright infringement in the drawing of the Product in the PS brochure. Hoist then served a Notice of Discontinuance pursuant to CPR 38 on the basis that circumstances had changed since it had commenced proceedings such that there was no longer an operative threat. Hoist relied on a letter from Reid to PS in which Reid assured PS that it had no intention of initiating proceedings against PS. PS, however, continued not to sell the Product.
Mr Wyand QC held that the purpose of Hoist’s threats action, which had been to enable it to sell the Product, had not been satisfied. This purpose would only be satisfied if Hoist succeeded in its threats action or took a licence under the unregistered design rights being asserted by Reid. It had chosen to do neither, thus the threat remained operative.
As regards Hoist’s application for an order under CPR 38.6 that Reid pay the costs of the discontinued action, Mr Wyand QC held that in order to succeed, Reid must establish that there was some reason why the normal rule that the discontinuing party pays the costs of the discontinued action should not be followed. Taking into account that he did not believe Hoist’s contention that there had been a relevant change in circumstances between commencement of the action and service of the Notice of Discontinuance, Mr Wyand QC could not see any reason to depart from the usual costs order. Thus, Hoist was not awarded its costs.
Katharine Stephens, Zoe Fuller and Gina Brueton
Reporters’ note: We are grateful to our colleagues at Bird & Bird LLP for their assistance with the preparation of this report: Adrian Howes and Nick Boydell.
The reported cases marked * can be found at http://www.bailii.org/databases.html#ew and the CJ’s decision can be found at http://curia.europa.eu/jcms/jcms/j_6/home.