"Baby-dry" applied by English High Court
UK "Beer" Trade Marks Potentially Vulnerable to Partial Revocation for Non-use
In a recent decision, the High Court in England has considered and applied - for the first time - the European Court of Justice (ECJ) ruling on "distinctive character" in the BABY-DRY case (Procter & Gamble Co v. OHIM (BABY-DRY), 20 September 2001).
The decision has also re-opened the debate as to the extent to which a trade mark registration may be restricted to particular goods/services on the basis of non-use. Should the Court restrict the registration to precisely the goods in respect of which use is shown (in this case, bitter beer), or should it allow the registration to cover a wider class encompassing such goods (in this case, beer)?
The Claimant, Mr West, is the owner of a number of off-licence supermarkets in and around Calais. He sought revocation of the UK registered trade mark, "E.S.B.". The E.S.B. mark belongs to the Defendant brewer, Fuller Smith & Turner Plc ("Fullers"). It is registered in respect of "Beers included in Class 32" as of April 1988. The revocation action was commenced by Mr West following Fullers successful opposition, based on its rights in the E.S.B. mark, to Mr West's UK trade mark application for "ESP EASTENDERS STRONG PILS" in respect of lager and pilsners in Class 32.
Mr West argued, among other things, that the E.S.B. registration had not been registered validly at April l988 because it described a particular category of beer, Extra Special Bitter, and was devoid of any distinctive character (s.3(1)(b), Trade Marks Act (TMA) 1994), consisted exclusively of signs or indications which may serve to designate the kind or quality of the goods (s.3(1)(c), TMA 1994) or which had become customary in the current language and practices of the trade (s.3(1)(d) TMA 1994). In the alternative, Mr West argued that the E.S.B. mark should be limited to bitter as opposed to extending to cover all beers (including pilsners). In the further alternative, Mr West claimed that Fullers should accept a geographical limitation to those parts of the country in which the E.S.B. mark had acquired distinctiveness. This further alternative was rejected by the Court on the basis that there is no statutory power to revoke a mark for part of the United Kingdom. In any event, the Court observed that the E.S.B. mark had achieved national recognition through the repeated winning of CAMRA (The Campaign for Real Ale) awards.
Distinctive Character in April 1988
As the UK Trade Marks Act 1994 was intended to give effect to the European Trade Mark Directive (Council Directive 89/104 of December 1988 to approximate the trade mark laws of member states of the EEC), the Court sought guidance on interpretation from the decisions of the ECJ on the corresponding provisions of the Directive and of the identically worded Community Trade Mark Regulation (Regulation 40/94).
The most recent guidance from the ECJ was the BABY-DRY decision of September 2001.
In BABY-DRY, the ECJ overturned the earlier decision of the Court of First Instance, finding that the word combination BABY-DRY was not solely descriptive but had distinctive character. The syntactically unusual juxtaposition of the two words BABY and DRY was not a familiar expression in the English language, either for designating babies' nappies or for describing their essential characteristics.
The ECJ had considered Article 7(1) of the Regulation (equivalent to s.3(1) TMA 1994) together with Article 12 of the Regulation (equivalent to s.11(2) TMA 1994 - defence for third parties using, in accordance with honest practices, indications concerning the kind, quality, quantity etc of the goods or service). It concluded that the purpose of the prohibition of purely descriptive signs as trade marks was to prevent registration of signs which "because they are not different from the usual way of designating the relevant goods or services or their characteristics, could not fulfil the function of identifying the undertaking that markets them and are thus devoid of the distinctive character needed for that function".
The English Court observed that the reasoning of the ECJ, based on the Article 12/Section 11 defence, represented a departure from the previous English law of trade marks. It observed, for instance, that in AD2000 ( RPC 168 at 176) the Appointed Person had, in referring to the s.11 defence, stated that "the first line of protection is to refuse registration of signs which are excluded from registration by the provisions of section 3". The approach for registrability under the 1994 Act was considered to be the same as under the old Act and the Appointed Person had approved the rationale that "the privilege of a monopoly should not be conferred where it might require honest men to look for a defence".
The difference in approach had been noted by the Advocate General in BABY-DRY ( ETMR 75). He had concluded that Article 7(1)(c) should be interpreted "as intended not to prevent any monopolising of ordinary descriptive terms but rather to avoid the registration of descriptive brand names for which no protection could be available".
In addition to BABY-DRY, the English Court considered the Court of First Instance decision in DOUBLEMINT (Wm Wrigley Co. v. OHIM "DOUBLEMINT"  ETMR 623) overturning the Board of Appeal's refusal under Article 7(1)(c) of the Regulation to register "DOUBLEMINT" for chewing gum. The term DOUBLEMINT did not "enable the public immediately and without further reflection to detect the description of a characteristic of the goods in question" - for example, what was single mint: did double mean twice as strong or two types of mint?
From the BABY-DRY and DOUBLEMINT authorities the Court discerned four principles:
"(i) Sections 3(1)(b)(c) and (d) are not designed to exclude from registration marks which merely possess an indirect descriptive connotation: the words "devoid of any" in subsection (b) and "exclusively" in (c) and (d) are to be given effect to;
the fact that some mental activity is necessary in order to discern a reference to the quality of a characteristic of the goods may assist in its registrability;
uncertainty as to the precise nature of the reference to the quality or character of the goods will also assist;
marks which can only refer directly to the quality or character of the goods: (BITTER for beer would be an example) must be refused registration. This is because such a mark does not "differ from the usual way of designating the goods or their characteristics" and because it may "serve in normal usage from a consumer's point of view to designate either directly or by reference to one of their essential characteristics" the relevant goods".
Applying these principles to the E.S.B. registration, the Court agreed that the mark E.S.B. is prima facie distinctive in the sense that the mark itself has distinctive characteristics - "The consumer has to work out what the letters stand for. He or she may come up with no explanation for the letters, or surmise that it stands for any of Extra/Extremely/Strong/Special/Beer/Brew/Bitter". On that basis, the Court held that the mark would only fall foul of s.3(1)(b) (and, in the circumstances, ss3(1)(c) and (d)) if the evidence established that the average consumer in April 1988 knew that the letters were exclusively an indication of the kind or quality of the goods, or were in common parlance.
The Court accepted that Fullers had used the E.S.B. mark extensively and that, although the use was normally in combination with the house mark, "Fullers", and the words "Extra Special Bitter", the consumer would have had no difficulty in discerning that E.S.B. was used as a trade mark.
Mr West led evidence on the use by brewers of Extra Special Bitter and E.S.B. prior to 1988 and expert evidence to seek to establish that E.S.B. had an exclusively descriptive meaning in that it described a particular category of beer. The Court held, however, that Mr West had failed to establish that the E.S.B. mark was devoid of distinctive character.
Non-Use Except on Bitter
The Court accepted that, "On one view, it can be said that as the mark has been used for beer, one should not look further" (see Premier Brands UK Ltd v. Typhoon Europe Ltd  FSR 767). However, the Court preferred the view that on this occasion it was necessary to dig deeper than the registration wording. The starting point should be the list of articles for which the proprietor (Fullers) had in fact used the mark (see MINERVA TM  FSR 734, Decon Laboratories v. Fred Baker Scientific  RPC 17 and DaimlerChrysler AG v. David Alavi  RPC 813).
The Court observed that, under the 1938 Act, the specification of goods for a mark could cover "goods of the same description" as those for which it had been used by the proprietor. The rationale for this approach was that the specification of goods acted as an absolute limitation on infringement allegations.
Under the new trade mark law, however, infringement allegations can extend beyond the registered specification of goods to similar goods (s.10(2)) and even, in the case of "famous" marks, to non-similar goods (s.10(3)). In the absence of authoritative guidance as to the extent to which a specification of goods may extend beyond the particular goods for which a mark has been used, the Court applied the guidelines set out by Mr Justice Jacob in MINERVA. Did the specification include "commercially quite different sorts of articles" to those in respect of which use was established? Was "non-use in respect of a significant sub-set" established?
Applying these guidelines, the Court concluded that lager and bitter are two commercially quite different types of beer. "Beer drinkers in the main drink lager or bitter, not both". The evidence of "repertoire drinking" (the practice of drinking different alcoholic drinks on different occasions) did not alter the Court's conclusion. The Court concluded that "bitter" is only one of a number of significant sub-sets of the class of articles represented by "beer". Non-use had been established in relation to all the other sub-sets and the Court therefore limited the registration to cover only bitter.
The E.S.B. decision demonstrates the willingness of the English Courts to depart from previous English law and move towards a harmonised European interpretation of provisions which derive from the European Trade Mark Directive. The four principles set out by the Court based on the BABY-DRY and DOUBLEMINT decisions should assist practitioners in assessing the "distinctive character" of trade marks.
The decision to limit the specification of goods from "beers" to "bitter" raises difficult issues. As a result of the decision, a significant number of registered trade marks in the alcoholic drinks and other industries could now be liable to partial revocation for non-use. If the decision stands, registrations which cover "beers" could be liable to revocation except in relation to the "significant sub-set" which encompasses the particular beer in respect of which the mark is used. Broader registrations covering "alcoholic beverages (except beers)" in Class 33 could also be liable to similar limitation.
The decision is being appealed by both parties.
Also published in WIPR in March 2002.
Anna Duffus is a solicitor in the Intellectual Property department of Bird & Bird, who acted for Fuller Smith & Turner plc.