Trade marks and passing off: co-existence and own name defence

08 February 2017

Audrey Horton

The High Court has held that trade mark infringement and passing off were established as a result of likelihood of confusion including "wrong way round" confusion, and that the own name defence was not available for past acts of infringement but was available for the future.

Background

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).

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), EU Trade Mark Regulation (207/2009/EC)).

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 EU or UK in connection with the goods or services in respect of which it is registered (section 46, TMA; Article 51(1)(a),EU  Trade Mark Regulation (207/2009/EC)).

Facts

P owned a luxury spa business in Huddersfield under the name Titanic Spa and S operated a well-known hotel under the name Titanic Hotel Liverpool.

P owned a UK-registered trade mark for "Titanic Spa" and sued S for trade mark infringement and passing off in the Intellectual Property Enterprise Court. S originally used the name "T-Spa" to refer to a spa in its hotel but rebranded to the "Spa" and then to "Maya Blue Spa". P continued to complain about the use of "Titanic" in the hotel name.

P applied for revocation for non-use S’s trade mark for "Titanic Quarter". The Intellectual Property Office (IPO) allowed P’s application. S appealed.

S sued P for infringement of two word and figurative marks for "Titanic Quarter" through P’s use of the name "Titanic Spa". All proceedings were heard together in the High Court.

Decision

The court held that further evidence of use of "Titanic Quarter" should be admitted.

P’s "Titanic Spa" mark had been infringed by S. There was visual and aural similarity between the mark and sign as both contained the word "Titanic", although this was not the dominant element. There was also conceptual similarity, with consumers being aware that it was common for hotels to have spas. As a result of use the Titanic Spa mark had enhanced distinctive character. The services being compared were identical or highly similar. Instances of actual confusion had also occurred, mostly "wrong way round" confusion, where members of the public considered that the Titanic Spa in Huddersfield had some connection with the Titanic Hotel Liverpool. Since the rebranding of the spa at the Titanic Hotel, instances of confusion had however decreased substantially.

S could not rely on the own name defence for past acts of infringement but the steps taken to distinguish the hotel from P’s business would avoid a likelihood of further confusion and could be used a defence in the future, provided that S undertook to place a prominent notice on its website making it clear it had no connection with P’s business and stopped all use of the word spa in connection with its hotel. These measures, along with the steps already taken, would mean the reasonably circumspect average consumer would not be confused. It would not affect P’s ability to use its brand to attract and retain customers, nor the further legitimate expansion of its business. It would be fair competition in accordance with honest commercial practices. 

The passing off claim against S similarly succeeded in relation to past acts but failed for the future.

Due to lack of conceptual similarity and no enhanced distinctive character of the "Titanic Quarter" marks there was no likelihood of confusion between the "Titanic Quarter" marks and the "Titanic Spa" mark and therefore no trade mark infringement by P. S’s challenge to the validity of the "Titanic Spa" marks in the light of its "Titanic Quarter" registrations also failed.

S was granted a declaration that it was entitled to use "Titanic Quarter" for hotels. This would serve a useful purpose and would provide all parties with commercial certainty. For example, S might wish to extend the Titanic Quarter brand to other parts of the UK and license associated companies for those purposes.

Comment

This is an interesting application in a factually complex scenario of trade mark and passing off laws to a situation where parties have co-existed for several years. As a result of steps taken to distinguish the businesses from each other taken by the parties, as well as those specified by the court, the parties were both able to continue their long-established and valuable businesses.

The court had to consider many different issues, including ruling on whether a declaration of trade mark use was appropriate. Established legal principles were applied to the facts in a clear and pragmatic way, taking into account the commercial realities of the situation.

Case: Property Renaissance Ltd T/A Titanic Spa v Stanley Dock Hotel Ltd T/A Titanic Hotel Liverpool and others [2016] EWHC 3103 (Ch).

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

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