Trade marks: infringement of figurative mark through unfair advantage

By Audrey Horton

04-2020

The High Court has held that figurative trade marks registered for non-alcoholic drinks were infringed by the taking of an unfair advantage by the application of similar figurative signs to energy drink products that had been imported into, and sold in, the UK.

Summary

The High Court has held that figurative trade marks registered for non-alcoholic drinks were infringed by the taking of an unfair advantage by the application of similar figurative signs to energy drink products that had been imported into, and sold in, the UK.

Background

A registered trade mark owner of an EU trade mark (EUTM) 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 EUTM is registered, where there exists a likelihood of confusion or association on the part of the public (Article 9(2)(b), EUTM Regulation (2017/1001)) (Article 9(2)(b)).
  • Identical or similar sign to the EUTM where the EUTM has a reputation in the EU, 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 EUTM (Article 9(2)(c), EUTM Regulation) (Article 9(2)(c)).

A defendant is liable as a joint tortfeasor if they have acted in a way that assisted the commission of the tort by the primary tortfeasor, and they did so pursuant to a common design to do or assist with the acts that constituted the tort (Fish & Fish Ltd v Sea Shepherd UK [2015] UKSC 10). 

Facts

R was the manufacturer and distributor of a well-known energy drink, "Red Bull", for which it held three registered EU trade marks. R's marks contained two silhouetted bulls charging at each other in front of a circle, a blue and silver parallelogram with a yellow circle in the middle, and a single charging bull.

A Bulgarian company, V, manufactured energy drinks bearing the name "Big Horn", and B imported and sold them in the UK. E was a director and shareholder of B. B's signs contained two charging rams in front of a circle and above a yellow mountain, a silver cross against a blue background and a single charging ram.

R obtained judgment against V for trade mark infringement.

R then sued B for trade mark infringement claiming that B's signs were likely to give rise to a risk of confusion under Article 9(2)(b) and took unfair advantage of the distinctive character or reputation of R's marks under Article 9(2)(c).

Decision

The court found B liable for infringement of R's trade marks under Article 9(2)(c), but not under Article 9(2)(b).

In considering whether the use of a disputed sign gave rise to a link between the sign and the relevant trade mark in the mind of the average consumer, and whether the use of a sign took unfair advantage of the distinctive character or reputation of the mark, it was necessary to make a global assessment having regard to all the circumstances of the case. The relevant factors included the strength of the mark's reputation, the degree of its distinctive character, the degree of similarity between the marks, and the nature and degree of proximity of the goods or services concerned. The more immediately and strongly the mark was brought to mind by the sign, the greater the likelihood that the use of the sign was taking, or would take, unfair advantage of the distinctive character or reputation of the mark. 

R's trade marks had for many years been well known within the EU. There was both visual and conceptual similarity between the B double ram sign and the R double bull mark for the purposes of Article 9(2)(c). There was also visual and conceptual similarity between B's blue and silver geometric device, and R's blue and silver parallelogram device. The B single ram sign was both visually and conceptually similar to the R single bull mark. They were likely to cause the average customer to link those signs with R's marks and were taking unfair advantage of the distinctive character and reputation of R's marks.

In considering whether a link could be established such that use would give an unfair advantage to B, the court took into account a number of factors, including that the R trade marks had a global reputation and were highly distinctive; the B signs were being used for the same products as R, namely energy drinks and water; and were being sold in the same retail outlets as R drinks, in cans of identical size and shape. B's social media advertising also included numerous pictures of B cans placed directly next to R products in retail outlets. B's signs were therefore designed so as to enable B to free-ride on R's reputation and to benefit from R's marketing efforts to create a particular image with its trade marks.

There was no infringement under Article 9(2)(b) as the level of similarity between the marks was not such as to cause the average consumer to believe that B's products were economically linked to R's products. Even with a low degree of attention for low-cost products, an average consumer was likely to be well aware of the differences between the signs and was not likely to consider B's product to be R's product, whether at the point of initial interest (initial interest confusion), at the point of buying the product, or observing the product post-sale (post-sale confusion).

It was more likely that the average consumer would perceive B's products as cheaper or alternative versions of R's products, stimulating sales of the former in a way that would not have occurred had the B signs not evoked so directly the visual and conceptual forms of the R trade marks. The issue was therefore free-riding, bringing the infringement within the scope of Article 9(2)(c), rather than actual confusion between the signs within the meaning of Article 9(2)(b).

E was liable with B as a joint tortfeasor. The fact that E was a director of B did not exclude liability, nor did it establish that the conditions for joint liability were met. Whether the test was met was a fact-sensitive assessment. E had set up B as a vehicle for the importation and marketing of the energy drinks produced by V and was directly responsible for B's activities, including its social media accounts on which the products were advertised. The fact that V had produced the disputed signs did not enable E to avoid liability in circumstances where he had not only assisted with, but entirely controlled, B's actions.

Comment

R has previously had difficulties protecting and enforcing its trade marks, both in relation to the registration and maintenance of its marks, and in its opposition of similar marks for which registration has been sought. Here, however, R successfully capitalised on its strength as a very well-known brand, by establishing infringement against a cheaper look-alike product which was taking unfair advantage of its figurative marks, in circumstances where there was no actual confusion between the products.

Case: Red Bull GmbH v Big Horn UK Ltd and others [2020] EWHC 124 (Ch).

First published in the April 2020 issue of PLC Magazine and reproduced with the kind permission of the publishers.  Subscription enquiries 020 7202 1200.