Trade mark infringement: tarnishment and dilution

The Intellectual Property Enterprise Court has held that UK and EU trade marks for ZUMA were infringed by the use of the domain name dineinwithzuma.com, and a figurative device containing that phrase on a website.

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 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), Trade Marks Act 1994 (TMA) (section 10(3)); Article 9(2)(c), EU Trade Mark Regulation (207/2009/EC)) (2009 Regulation) (Article 9)(2)(c)).

A trade mark owner 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), 2009 Regulation).

Facts

A ran a series of well-known restaurants under its registered UK and EU trade marks ZUMA for the provision of food and drink. V, the sole director and shareholder of Z, was the registrant of the domain name www.dineinwithzuma.com under which a website selling pet food was operated. On the website and on product packaging, Z used the names ZUMA and DINE IN WITH ZUMA and a device featuring V’s pet dog, Zuma.

A opposed Z’s application to register DINE IN WITH ZUMA as a UK trade mark.

A also brought trade mark infringement proceedings against Z under section 10(3) of the TMA and Article 9(2)(c) of the EU Trade Mark Regulation. Z raised the own name defence, and counterclaimed for a declaration pursuant to section 21 of the TMA that groundless threats of trade mark infringement proceedings had been made against them, seeking damages for commercial loss. A accepted that its letters before action had contained actionable threats, but claimed the defence of justification.

V argued that she had not yet accepted any orders from her website and had not therefore used it to trade. She also disputed that the word ZUMA was being used as a sign in relation to goods or services on the website: she said that it was only used to refer to her dog as part of the narrative.

Decision

The court held that Z had infringed A's UK and EU marks through its use of ZUMA, DINE IN WITH ZUMA and the domain name.

The relevant market for the purposes of assessing whether the Zuma restaurant had sufficient reputation to fulfil the requirements of section 10(3) of the TMA and Article 9(2)(c) was the market for high quality, high-end restaurants in London. Evidence of the high number of pre-booked reservations made at Zuma over the years, including many from customers located in the EU, indicated that it had a significant reputation in the UK and the EU. This conclusion was supported by significant evidence of press coverage, awards and celebrity visits.

The court rejected V's argument that she had not used her website to trade. The site was ready to take orders and it was therefore advertising, offering and exposing goods for sale, all capable of being infringing acts. V’s evidence was that she fully intended to develop and use her brand. All the signs complained of had been used in a commercial context with a view to future economic advantage.

The court rejected V's argument about her dog because the fact that Zuma was a real dog was not explained on the site. The domain name matched the signs that were used to market goods on the website, and this was sufficient to establish a link between them. However, the court accepted that the company name had not been used in relation to goods or services, but merely as a company name, and that use of the word ZUMA within the company name did not amount to infringement.

The pet food signs were all identical with or similar to the ZUMA mark, as the word "zuma" was the distinctive and dominant element in all of them, particularly in the light of the strong reputation of the ZUMA registered marks.

If the average consumer who knew of Zuma restaurant were to see the signs that were being used for the pet food, they would be likely to make a link in their mind between them and the registered mark ZUMA. A significant proportion of the general public was aware of the restaurant mark, and many also owned dogs. The fact that V planned an upmarket brand that could be stocked in high-end supermarkets made it all the more likely that there would be an association with Zuma restaurant, which was also upmarket. The use of the words "dine in" in the banner device also increased the likelihood of a link, as did the dressing of the dog in a bow tie and the use of culinary terms for dog meals.

The ZUMA mark was tarnished because pet food was incompatible with food for humans and was likely to raise unpleasant associations. The effect was increased by the high-end nature of Zuma restaurant. V’s planned use of her device and brand names to build a nationwide pet food business raised a serious likelihood of an adverse effect on the economic behaviour of the average consumer who knew of the ZUMA registered marks, so that it would cause them to be diluted.

V and Z could not succeed with the own name defence on the basis that V’s dog was called Zuma. The dog was not a natural person or a company. The defence also failed in relation to the UK mark, because "Zuma" was not actually the company's name.

V and Z succeeded in their threats claims solely in relation to use of the company name, but the court refused to award any damages as there was no evidence that commercial loss had arisen from the threats.

Comment

This decision is an interesting example of infringement of a mark with a reputation, with an unusual set of facts. Although pet food and restaurant services do not appear at first to be connected, the strength of the restaurant mark's reputation led to a presumption that there would be many dog-owners who had heard of the restaurant and who would think of it when they saw the "Dine with Zuma" branding. Although they would not necessarily have assumed a commercial link between the two businesses, the mere association in their minds between Zuma restaurant and dog food was considered sufficiently adverse in nature as to be likely to dilute and tarnish the restaurant's reputation.

Case: Azumi Ltd v Zuma's Choice Pet Products Ltd and others [2017] EWHC 609 (IPEC). 

First published in the May 2017 issue of PLC Magazine and reproduced with the kind permission of the publishers.  Subscription enquiries 020 7202 1200.