In 2007, the engineering company applied to register a trade mark for OMEGA in the UK in classes 9 and 14 on the trade marks register. Class 14 of the register covered several things including watches. It was the application in that class that the watch company officially opposed with the trade marks registry. Whilst the parties were battling it out on that front, the manufacturing company applied to the High Court for summary judgment against the watch company’s breach of contract for opposing the trade mark application.

The High Court agreed with the manufacturing company. The court said that the words in the original agreement were sufficiently clear and it did not matter which classes on the register the use or application were in – classes on the register were purely for the registry’s administration purposes. It was the specification for which the goods to be used that mattered. The High Court added that someone who had consented to another’s use of the trade mark in a particular way could not later oppose that use or registration, unless they agreed something different.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: ‘This case shows that courts will enforce trade mark co-existence agreements between businesses that have overlapping brands. Parties should also ensure that the agreements are not specific to any particular class of goods or services but are described in terms of the goods or services themselves. They should also seek to ensure the agreements are future proofed, where possible, because co-existence agreements entered into a long time ago can have an impact many years down the line, as the watch company found out to its cost here.’

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, told the Trusted Reviews web site at www.trustedreviews.com the following:

‘If music is shared without the copyright owner’s permission, the copyright owner has the right to ask people who have distributed or obtained the music without their authorisation for money to cover their losses, costs and expenses. Even if the copyright owner is mistaken about some of the alleged infringement activity, there is nothing to stop them sending the letters. Copyright is different from some other intellectual property in this regard, such as trade marks and patents, where people have to take greater care before making claims.

‘Equally, there is nothing to stop anyone receiving these letters from simply ignoring them. It is up to them what they decide to do, as few, if any, of these sorts of actions have actually reached the courts to date. However, if their case does get to court, any person found to have done wrong may have to pay more, which is why some people simply pay up to take away the worry.

‘As frightening as it may be to receive these letters, especially for people who have done nothing wrong, they do not simply have to pay up. It is for the person making the claim to be able to prove what has happened. A recipient of the letter could deny it and question the evidence alleging the infringement. If the case is contested, recipients of the letter may wonder how likely it would be that the person sending them the letter would be prepared to obtain sufficient evidence and attend a trial, considering the relatively small sums involved in fighting each contested case. To be able to feel confident of winning their case, the claimant would either want to be in possession of a written admission of wrongdoing or the hard drive of the computer. 

‘The implementation of the recently passed Digital Economy Act could make the position more concerning for households. The Act allows for the Government to introduce new laws that would put the onus on people with an Internet connection if it can be shown that copyright infringement had occurred through that connection, regardless of who actually did the infringement. This could affect people sharing a home or people whose Internet connections have been used by cybercriminals. Those new laws have not been introduced yet and would have to undergo Parliamentary scrutiny first, but there could well be pressure to do so if the music industry continues to suffer lost revenues as a result of continued peer-to-peer file-sharing.’

To go to the Trusted Reviews article, click here: http://www.trustedreviews.com/multimedia/news/2010/07/19/Ministry-of-Sound-Gets-Legal-on-Downloaders/p1

In this particular case, Portakabin made and supplied mobile buildings. It owned a registered trade mark for ‘PORTAKABIN’, Primakabin sold and leased new and second-hand mobile buildings, some of which were owned by itself and others by other suppliers such as Portakabin. Primakabin sponsored ‘Portakabin’, as well as similarly spelt words such as ‘portocabin’, with Google so that Primakabin would appear prominently in response to a search engine query for those terms. Its advert was headed ‘used portakabins’. Portakabin objected and claimed that this was an infringement of its registered trade mark rights. The case worked its way through the Dutch courts, which made a reference to the ECJ to rule.

The ECJ stated that use of a third party trade mark as a keyword would infringe that trade mark unless the advert made it clear that the advertised goods or services do not come from the trade mark owner or licensee. Where this was not clear, European Union trade mark law would not normally provide a defence on the grounds of a mere description of the goods. Trade mark owners can stop unauthorised use of their marks as keywords if the advertising does not enable average Internet users or only with difficulty to ascertain whether or not the advertised goods or services originate from the trade mark owner.

The ECJ also said that legitimate resellers should have special protection. They could not be prohibited from reselling second-hand goods of the relevant trade mark owner, alongside other goods, unless the sale of those other goods risked seriously damaging the image of the proprietor’s trade mark.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: ‘This judgment reinforces the recent Louis Vuitton ruling, which can be found here: http://www.mablaw.com/2010/03/european-court-of-justice-gives-eagerly-awaited-ruling-in-google-keyword-search-terms-trade-mark-cases-google-v-louis-vuitton/. Keyword advertisers are treading on thin ice if they sponsor another trade mark to generate search results for their websites, unless they can show that users are not confused as to the commercial connection. Meanwhile, this latest case also enables legitimate use of trade marks by resellers.’

In this case, looking at things in the eyes of a reasonable businessman of BB who received the letter with knowledge of the relevant background, the High Court said that the letter in itself was enough to be construed as a threat. However, that must be examined in the overall context. The letter was part of a negotiating process and was also asserting a strong starting negotiation process in response to BB’s letter. Sending the letter in the terms done by BB in that context was therefore not unlawful in this situation.

This case surrounds an action brought by L’Oréal for trade mark infringement against Bellure. Bellure sold look-alike/smell-alike perfumes – perfumes that looked and smelt like some of L’Oréal’s established fine fragrance brands. This case was not about the fact that the perfumes smelt similar but about the get-up of the infringing articles and use of the brand names in comparison lists. The High Court had ruled in favour of L’Oréal. The defendants appealed, and the Court of Appeal referred questions to the European Court of Justice to answer so as to interpret EU trade mark law.

The ECJ came down in L’Oréal’s favour, particularly that the general get-up took unfair advantage of the more famous brands and free-rode on the coat-tails of that brand. The ECJ also said that using comparison lists could amount to trade mark infringement. Comparative advertising may be trade mark use, but could not be stopped by a trade mark owner if it satisfied the list of conditions in Article 3a(1) of the Comparative Advertising Directive. However, that list included not taking unfair advantage of the reputation of a trade mark, and not presenting goods or services as imitations of goods or services bearing a protected trade mark. The ECJ said that the Directive prevented an advertiser from stating or suggesting in comparative advertising that the product or service was an imitation or replica of something with a well-known mark. That would take unfair advantage of the reputation of that mark. The ECJ said use of a competitor’s trade mark in comparative advertising was allowed where the comparison objectively highlighted differences and did not give rise to unfair competition. Unfair competition arose because the imitator was effectively free-riding on the coat-tails of the more famous brand and benefiting from its reputation, despite no one actually being confused.

The Court of Appeal has applied that decision in its own judgment. It had no option but to rule that Bellure had infringed L’Oréal’s trade marks because it had used the brand names in respect of identical types of goods in advertising and, on the ECJ’s analysis, that was trade mark (rather than purely descriptive) use which could not be justified under comparative advertising law, even though there was no question of customers being confused. Lord Justice Jacob criticised this. He said that the comparison lists merely gave consumers buying perfumes at the lower end of the market an opportunity and informed choice as to which perfumes smelt a bit like the much more expensive branded products. Referring to someone else’s trade mark in that way when no one was confused and simply telling the truth that a product was a much cheaper imitation was a positive thing, he thought. He felt that trade mark law now effectively stopped people from telling the truth about comparing someone’s products with those of their competitors in a non-confusing way, and this could have a chilling effect on being able to compete.

Asda has been able to legitimately buy goods from the EU for sale elsewhere in the EU, but as Tesco found out when it lost its battle to stock Levi jeans in 2002 it is an unlawful use of trade marks to buy goods from outside the EU for sale in the EU unless the brand owner has agreed to this.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘Umbro could be in trouble if they are found to be abusing a dominant position in the market by refusing to supply customers and this keeps the price artificially high for consumers. However, it may be that Asda has sold the shirts at low or negative profit in order to prove a point and make a case, and that Umbro is merely making a reasonable level of profit.’

This case contrasts with different results in a similar recent case brought against eBay in France by Louis Vuitton. That case is reported here: http://www.mablaw.com/2009/12/ebay-louis-vuitton/. eBay has also had mixed success in other cases brought against it around Europe by the luxury brands. In a case brought by L’Oréal last year in the High Court, eBay was able to show that it was not responsible for counterfeit products sold by its users; but the Court went on to refer questions to the European Court of Justice to rule on whether use of L’Oréal’s brand in sponsored links to direct users to listings for infringing goods on its site constituted trade mark infringement and, if so, whether eBay had a defence under the E-Commerce Directive for acting as a mere host without actual knowledge of the infringing activity. We await that decision from the European Court.

In this subsequent case, Die BergSpechte Outdoor Reisen und Alpinschule Edi Koblmueller (BergSpechte) owned a trade mark for travel arrangements. A competitor called trekking.at Reisen used particular marks that Bergspechte considered to be too similar to its own registered trade marks to generate paid-for ads using Google’s AdWords service. The case proceeded through the Austrian courts and the matter was referred to the ECJ to rule.

The ECJ has ruled that the EU’s Trade Marks Directive enables a registered trade mark owner to prohibit an advertiser from advertising, based on a keyword identical with or similar to the trade mark through an Internet referencing service (eg Google), goods or services identical with those for which the mark is registered, such that the advertising does not enable an average Internet user without difficulty from ascertaining whether the goods or services originate from the trade mark owner or an entity economically connected with it or instead by a third party. The selection of the keyword by the advertiser was use in the course of trade and in relation to its own goods or services, even where the mark did not appear in the advert itself. It is for the national court to decide whether the signs are sufficiently similar and also whether the average Internet user could ascertain that the advertiser is not connected to the trade mark owner.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘In other words, there is no advance from the Google / Louis Vuitton ruling. We don’t know how the national courts are going to interpret these rulings. Things are still unclear.’

The case arose from luxury goods supplier Louis Vuitton’s concerns over use of its trade marks on Google’s AdWords system by two competitors who were trying to sell competing products and by a third person who supplied counterfeit Louis Vuitton goods. The cases proceeded initially through the French courts and then ended up at the European Court of Justice. The ruling was keenly awaited because of its impact on the ability to protect your own brand and use others using the growing advertising medium that is Google. The ECJ ruled as follows:

• A trade mark owner could prohibit a third party from advertising a keyword identical to its registered trade mark where the advert does not enable a normally informed and reasonably attentive Internet user without any difficulty to ascertain whether the goods or services referred to in the advert originate from the trade mark owner or whether the parties are somehow economically connected. It is for the national courts to decide on each case whether a trade mark’s distinguishing function is affected.
• An Internet referencing service provider (such as Google) which stores a keyword identical to the trade mark and displays adverts based on that does not itself infringe the registered trade mark owner’s trade mark rights.  
• Google also has protection against someone else’s acts in misusing trade mark rights because it is a mere host of the information within the meaning of the E-Commerce Directive and did not play an active role as to give it knowledge over the data stored. The mere fact that Google’s service was subject to payment, Google set the payment terms and it provided general information to advertisers did not prevent Google from being exempt. It would lose that protection, though, if it did not act expeditiously in removing access to the data involved with the third party’s misuse of trade marks.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘This was a long-awaited ruling. Unfortunately, though, the result is not particular clear. Brand owners will be pleased that the ECJ agrees with protecting their brands; Google will be pleased that it is not responsible for third parties who pay Google money to advertise using competitors’ trade marks; and people will be pleased that they can use another party’s brand to advertise on the Internet as long as users are not left in any doubt as to the fact that the parties are not economically linked.

‘On the other hand: brand owners will be disappointed that competitors may be able to free ride on the back of their brand and push up the price that they have to pay Google; competitors will not be clear as to where the boundaries are for using someone else’s brand in search terms; and Google will be left unclear as to whether it needs to take down someone’s use of a keyword upon being told to do so by the brand owner (and failure to take down when it should have done could leave Google without a defence to being an innocent host).

‘The result is therefore somewhat confusing. Who has won and who has lost? It would have been more useful to have had some more guidance such as a clear statement as to whether use of the trade mark term in the result was ok or not. Instead, we will need to await further court rulings to clarify the position which goes to the heart of doing business online. This was a good opportunity for the ECJ to give clarity in an important commercial area, and they failed to do so.’

In the High Court action, the Court threw out the defendant’s argument that it was simply using its ‘own name’. Although there was an ‘own name’ defence that could apply to companies as well as to individuals, the defendant did not use its full company name (apart from the ‘Ltd’ bit) as it was required to do to take advantage of this defence but it instead used a much shorter version of its name. In any event, the Court said that its use had not been ‘in accordance with honest practices in industrial and commercial matters’ as it should have known of the existing registered trade mark when starting up.

On appeal, the Court of Appeal has agreed with the High Court ruling, but not with all of its findings. The Court of Appeal said that a company could claim that its trading name benefited from the ‘own name’ defence. Whether it was the company name or trading name, though, the position had to be that the use was in accordance with honest practices. The right to use one’s own name was not an absolute right. Much depended on the trading name adopted and in what circumstances it had been adopted. In this particular case, the use of the same name as the already established brand did not amount to honest practices as the infringer did not already have concurrent rights in the name, so the ‘own name’ defence was thrown out.

In addition, the ASA objected to the fact that the survey had asked people to give the products a mark out of 10 and although Hovis’s average was higher it was not necessarily chosen preferred by more people.

Consequently, the ad breached the CAP Code. The CAP Code is a code of practice governing the content of adverts and marketing communications, and it is administered by the ASA. Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space.

The High Court refused to grant A’s injunction application. A had been aware since 2008 of B’s potentially conflicting similar service but had done nothing to stop it for a while. It was totally unjustified and unreasonable to delay in issuing legal proceedings. The Court dismissed A’s argument that it was appropriate to wait to issue proceedings until the extent of the confusion became clear. The Court said an injunction would severely affect B’s business as it would have to immediately change its name and lose advertising revenue, which may prove unnecessary if B won at the main court action. If A had acted more quickly, the Court may have granted the application but the delay was fatal to its request for an injunction.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.Upload-IT.com, comments: ‘People often delay in taking legal action because they don’t want to incur the expense. However, as this case shows, if you delay in exercising your rights, you may lose out on stopping someone. It’s always best to speak to a lawyer at the earliest opportunity so you can at least weigh up the options and don’t lose your rights for failure to act.’

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of www.upload-IT.com, comments: ‘Cases like this bring to the fore how important it is to obtain domain names relating to your brand before cybersquatters do. Although there are useful procedures to obtain the transfer of domain names quickly as happened here, cybersquatters can do untold damage to your brand before you obtain the transfer. They may persuade you to pay significant sums of money for what should really be your brand, just for you to avoid the uncertainty of going to an arbitration service where you may not win, and to enable you to obtain a transfer quickly. In the meantime, to keep the pressure on you and to increase the price you may be willing to pay, they may link from sites containing the domain names to your competitors or to porn sites. Far better to have a brand protection strategy and register in advance all common spellings and mis-spellings of your brand and across all top-level domains such as ‘.com’, ‘eu’, ‘.biz’ and ‘.uk’. But as IHG saw here, there may be a huge number of possible domain names that may be based on your brand, so the task of definitively registering everything relevant may not be easy.’

Mascha’s application for revocation was granted. There was no evidence that Carlyle had conducted any marketing or advertising of the hotel and its facilities in the UK with the registered trade mark. It was therefore not necessary to go on to consider whether advertising and marketing were sufficient in themselves to amount to genuine use of the trade mark in the UK for services provided in another territory. The registered owner had failed to show genuine use of the mark in the UK, so the registration was revoked.

In this case, Sun accused M-Tech of buying Sun’s products from China, Chile and the US and selling them in the UK without Sun’s consent. It therefore sought summary judgment against M-Tech. M-Tech raised a number of arguments.

The High Court dismissed M-Tech’s arguments and sided with Sun, awarding it summary judgment. It said M-Tech’s arguments had no real prospect of succeeding at a full trial. The judge was satisfied that the goods were first put on the market outside of the EEA and M-Tech had not produced any evidence to support its suggestion that they had been subsequently imported into the EEA with Sun’s consent.

M-Tech also raised another interesting legal argument, which was dismissed by the judge. It claimed that Sun’s distribution agreements which protected its trade mark rights infringed EU competition law and were therefore prohibited as they carved up the market. Sun was prepared to accept that its agreements may have infringed EU competition law, but argued that there was no connection between any such breach and its ability to enforce its trade mark rights. The judge was willing to accept Sun’s argument that the disappearance of any sort of secondary reseller market for Sun’s equipment was not because of its network of illegal agreements. Therefore, in the judge’s view, there was no real prospects of success between M-Tech’s argument that Sun should not be able to enforce its trade mark rights on EU competition law grounds.