The Court of Appeal has considered infringement and revocation of the ASSOS Community trade mark (CTM) and the ASOS UK trade mark, and the own name defence.
A trade mark owner has the right to prevent unauthorised third parties from using, in the course of trade, any sign:
- Where, because of its similarity to the trade mark, and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion or association on the part of the public (section 10(2)(b), Trade Marks Act 1994 (TMA)).
- Which is identical with, or similar to, the trade mark, which has a reputation in the UK, and where the use of the sign is without due cause and takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark (section 10(3), TMA).
Similar provisions are set out in Articles 9(1)(b) and (c) of the CTM Regulation (207/2009/EC).
A trade mark proprietor cannot rely on the registered mark to prevent the use by a third party of their own name or address, provided that they use it in accordance with honest practices in industrial or commercial matters (the own name defence) (section 11(2)(a), TMA; Article 12(a), CTM Regulation). The own name defence has been held to apply also to the use by a company of its own name (Scandecor Developments v Scandecor Marketing  UKHL 21).
A trade mark owner’s rights will be revoked if, within a continuous period of five years, the trade mark has not been put to genuine use in the Community or UK in connection with the goods or services in respect of which it is registered (Article 51(1)(a), CTM Regulation; section 46, TMA).
Since the 1970s, M operated an international cycling clothing business in Switzerland. In 2006, based on a 2005 Swiss priority application, M registered ASSOS as a CTM for goods in classes including classes 3, 12 and 25, which covered "clothing, footwear and headgear".
Since about 2005, A operated a global online fashion retail company under the brand "Asos"; its former name was "As Seen On Screen". In 2012, A registered ASOS as a UK trade mark.
In 2011, M sued A for trade mark infringement and passing off.
The High Court held that A’s use of the "Asos" name did not amount to passing off or trade mark infringement as there was no risk of confusion under Article 9(1)(b) in relation to the type of goods sold by M and no detriment to the reputation of M’s ASSOS mark under Article 9(1)(c).
In 2013, the High Court restricted the CTM’s class 25 specification to "track-suits, t-shirts, polo shirts, caps, jackets and shorts", which were the specific items on which the CTM had been used, and "specialist clothing for racing cyclists".
In 2014, the High Court held that A’s ASOS trade mark was valid but ordered that specialist cycling-related goods and services in classes 3, 25 and 35 should be removed from the CTM registration.
In 2014, the EU General Court held that there was a likelihood of confusion between a proposed CTM for ASOS and M’s ASSOS CTM under Article 8(1)(b) of the CTM. A appealed.
The European Court of Justice dismissed the appeal.
Both parties appealed to the Court of Appeal in respect of the three High Court decisions.
The court held that the ASSOS CTM had been infringed, but that the own name defence applied. It also partially upheld the High Court’s decision to restrict the specification of the CTM.
The use of the brand "ASOS" by A created a likelihood of confusion and damaged the distinctive character of the ASSOS registered trade mark. The High Court had wrongly considered the likelihood of confusion with respect to the actual use made of the trade mark by M, and not with the notional and fair use of the mark across the breadth of the specification (even once partially revoked). The key question was whether there was a likelihood of confusion having regard to a notional use of the ASSOS mark on the various items of clothing in ordinary retail outlets and on the internet. The consumer would sometimes be dealing with more expensive items but on other occasions with cheaper items, such as t-shirts. He had to rely upon the imperfect picture of the mark that he had in his mind and had to consider the context in which the ASOS goods were in fact sold. Neither mark had a conceptual meaning to the average consumer: "Asos" was not recognised as an acronym for "As Seen On Screen". The marks were also visually and aurally very similar. Taking into account all the above factors there was a likelihood of confusion.
There was no significant actual confusion, as the parties had been trading clothes through different outlets (one sold in cycling shops, the other sold through an online website), but this did not affect the finding of likelihood of confusion.
Damage to distinctive character was also found. The ability of the mark ASSOS to identify at least some of the goods for which it is registered as being the goods of Assos had in some circumstances amounting to a normal and fair use of that mark been weakened.
The court was divided on the question of the extent to which the trade mark specification should be revoked. The majority held that the High Court had applied the principles properly and was entitled to find that the use that had been made of the ASSOS CTM in relation to track-suits, t-shirts, polo shirts, caps, jackets and shorts was specific and did not justify a specification extending to all casual wear. However, it was held that the registration should be widened to cover specialist clothing for amateur as well as racing cyclists.
The court was also divided on the application of the own name defence. The majority held that A could rely on the own name defence to trade mark infringement. Overall, A had fulfilled its duty to act fairly in relation to M’s legitimate interests and had not conducted its business so as unfairly to compete with M. It was relevant that:
- Both parties had adopted their names independently. A had not intended to confuse the public or trade off the goodwill associated with M’s business. The name "asos" had been adopted innocently by A as it was an acronym of its previous name "As Seen On Screen".
- Although A had not conducted a trade mark search, if it had done so it would only have shown that M was a business focused on specialist cycling wear.
- There was no significant evidence of actual confusion.
- A had not taken any steps towards M’s business model and, instead, had, by the trial, taken steps to make sure that it did not sell cycling inspired fashion wear.
The dissenting opinion held that the own name defence should not be available to A as it had not conducted reasonable checks regarding the existence of trade marks similar to ASOS on identical or similar goods or services. This type of check would be expected under honest practices. A had also expanded its business, including across Europe, and had not taken steps to avoid a likelihood of confusion after becoming aware of the existence of M’s CTM. In addition, A had bid for the "assos" keyword after becoming aware of the CTM; adopted the lower case "asos" sign, which was closer to M’s lower case CTM; used "asos" on its own-brand goods and failed for a long time to eliminate cycle-related references to its own-brand clothing.
M intends to seek leave to appeal to the Supreme Court on the application of the own name defence. The length of this decision and the fact that it includes a detailed dissenting opinion reflects the complex issues involved. The decision demonstrates that the failure to conduct any trade mark searches before starting use and investing in a brand may lead to costly and time-consuming litigation. When adopting the brand, A had done a Google search for "asos" but had not conducted any trade mark searches.
Trade mark law reforms adopted by the European Commission, which are currently being considered by the Council of the EU, are likely to provide that the own name defence only applies to natural persons, not companies or trading names. It follows that A would not be able to rely on the own name defence under the proposed new regime.
Case: Maier and another v ASOS Plc and another  EWCA Civ 220.
First published in the April 2015 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.