Trade marks: wrong-way round confusion and passing off

Summary
The Court of Appeal has held that a figurative trade mark incorporating the words “the glee CLUB” was infringed by the US “glee” television series and dismissed a cross-appeal for passing off.

Background
A registered trade mark owner has the right to prevent unauthorised third parties from using, in the course of trade, an:

• Identical or similar sign for identical or similar goods or services to those for which the mark is registered, where there exists a likelihood of confusion or association on the part of the public (section 10(2)(b), Trade Marks Act) (TMA) (section 10(2)).
• Identical or similar sign to the registered mark where the trade mark 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) (section 10(3)).

The elements of the tort of passing off are:

• Goodwill or reputation attached to the relevant goods or services.
• A misrepresentation by the defendant to the public, leading or likely to lead the public to believe that its goods or services are those of the claimant.
• Resulting damage to the claimant (Reckitt & Coleman Products Ltd v Borden Inc [1990] RPC 341).

Facts
C operated live stand-up comedy and live music in the UK.

In 1999, C registered a series of two UK figurative trade marks, which incorporated the words “the glee CLUB” (the mark).

F produced a US television series entitled “glee” first broadcast in the UK in 2009. The series was very successful in the UK, songs performed in the programmes were sold in the UK and there were two world concert tours.

C began trade mark infringement proceedings against F and also alleged passing off. The High Court held that C’s mark was infringed by F‘s television series under sections 10(2) and 10(3), but dismissed C’s claim for passing off. F appealed and C cross-appealed.

The High Court awarded C an injunction, publicity order, option between damages and an account of profits, interim payment and delivery up of infringing copies of the show (www.practicallaw.com/7-589-4067). F appealed and C cross-appealed.

Decision
The court dismissed the appeal and the cross-appeal. It held that F had infringed the mark but was not guilty of passing off.

The High Court had failed:

• To analyse the cause of the confusion of the witnesses, particularly whether it arose because of the similarity of the sign to the mark and the similarity of the services covered by the mark and those for which the sign had been used.
• To consider the lack of “similarity of services”.
• To refer to the significance of the context in which the sign was used.

In light of these errors, the court had to review the evidence of confusion again and decide for itself the issue of infringement under section 10(2). It found that much of the evidence supported C’s case, and showed that the similarity between the mark and the sign and the similarity between the services provided had led a significant number of people to believe that the two businesses were connected.

Most of C’s witnesses on the issue of confusion were people who knew of the television series and, on seeing or hearing of C’s business, believed it to be in some way connected with the series, so that they were aware of the F’s sign first and C‘s mark second (wrong-way round confusion). The correct question, however, was whether there was a risk that the average consumer might think that the services came from the same or connected undertakings. The order in which a consumer came across the mark and the sign was not significant. Evidence of wrong-way round confusion was not inadmissible, but must be assessed carefully along with all the other evidence in the context of the particular case. As the analysis of infringement involved an element of looking forward, the question was whether there was a likelihood of confusion in light of F’s actual and threatened activities. Evidence of confusion after the television series launched could assist in answering that question.

Here, the issue was finely balanced and so evidence of actual confusion was potentially very persuasive. Overall, the evidence supported a finding of a likelihood of confusion.

On section 10(3) infringement, if there was a likelihood of confusion, average consumers believed or were likely to believe that the services came from the same undertaking, so a link was established. On detriment, the evidence showed that actual and potential consumers were connecting the F’s business with that of C. The scale of F’s use of “glee” was enough to have a serious impact on C’s business and its ability to use the mark for the purposes of identifying and promoting its venues as its own. The evidence showed that the mark was suffering detriment because it was being swamped by F’s use of its sign. There was evidence of a change in economic behaviour of average consumers or evidence of a serious likelihood that this change would occur in the future.

On the question of due cause, while F had adopted the name “glee” in good faith and the television series was a creative work, F could have used an alternative name. The services were similar to a material degree, and there remained the likelihood of confusion, and detriment to the mark.

On passing off, although C had goodwill not just in the mark but also in the word “glee”, and the use of the sign had caused confusion, this did not mean that F was guilty of any actionable misrepresentation. C had presented evidence of an instance where someone familiar with C’s clubs had been confused into thinking there might be a connection with the television show, but this was not enough to establish passing off.

Comment
This decision confirms the potential relevance of wrong-way round confusion evidence in trade mark cases, while at the same time pointing out that it was simply part of, and should not detract from, the overall assessment of whether the evidence shows confusion. One of the objections that F raised to wrong-way round confusion was that it meant that a sign that did not infringe when it was first used in a territory might be found to infringe later, once consumers had become familiar with it. Although it was objectionable for a claimant to be able to rely on the defendant’s growing reputation to support a case that would have failed at the date of the defendant’s launch, this was a matter to be taken into account in assessing the value of evidence of actual confusion, not a reason to exclude it altogether.

The finding in relation to passing off also demonstrates the different wider scope of potential protection afforded by a registered as opposed to an unregistered trade mark.

Case: Comic Enterprises Ltd v Twentieth Century Fox Film Corporation [2016] EWCA Civ 41.

First published in the April 2016 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.