UK COURT DIARY

Still the Same? How the English Courts are Assessing Identity of Marks Following LTJ Diffusion

In the wake of the ECJ’s groundbreaking decision in LTJ Diffusion SA v Sadas Vertbaudet SA (Case C-291/00) in March 2003, the English courts are beginning to cast some welcome light on the meaning of a ruling that has been notoriously resistant to interpretation, and on its practical impact in determining whether trade marks are identical.

In LTJ, the ECJ held that in order to be identical to an earlier mark, a later mark must reproduce, without any modification or addition, all the elements constituting the earlier mark or, viewed as a whole, contain differences so insignificant that they may go unnoticed by an average consumer, taking into account that the average consumer does not necessarily compare marks side by side and may remember them only imperfectly. Thus identity can mean strict identity, or it can mean something less. How much less, however, was unclear.

Whether marks are identical or merely similar can be of crucial importance in an infringement action. Where marks are only similar, a claimant in an infringement action must show a likelihood of confusion in order to succeed. Where there is identity of marks and goods or services, however, a finding of infringement is automatic. The claimant need prove nothing else. The difference this makes to costs and the availability of swift remedies is manifest and sufficiently critical to warrant explanation by the courts of just what “identical” means.

 

Reed Executive plc v. Reed Business Information Ltd.

The Court of Appeal recently examined this issue in Reed Executive plc & Another v Reed Business Information Ltd. & Others (3 March 2004).

The claimant, an employment agency, had sued the defendant, a magazine publisher, over the defendant’s advertisement of job vacancies in print and on the Internet. The defendant’s advertisements had been offered under marks incorporating REED, which the claimant argued amounted to use of identical marks for the “employment agency services” for which the claimant’s REED mark was registered. The infringement claim was brought under Section 10 (1) (a) of the Trade Marks Act 1994, which does not require a likelihood of confusion provided there is identity of both marks and services.

Ultimately, the court found that the publisher’s activities were not “employment agency services.” Whether logos incorporating REED ELSEVIER and REED BUSINESS INFORMATION were identical to REED or merely similar was therefore no longer pivotal, since infringement under S. 10 (1) (a) could not be made out absent identity of services. Nevertheless, the court considered the question of identity of marks.

In his judgment for the Court, Jacob LJ regarded the ECJ’s ruling in LTJ as “opaque.” Allowing for imperfect recollection by the average consumer was, in his view, a concept more appropriate to considering whether there was a likelihood of confusion, rather than identity of marks. Nevertheless, the judge observed that the ECJ had moved beyond the rigid English view of identity by recognising that an addition can in some cases take marks beyond identity, and cause them to be merely similar. This was clearly relevant in a case involving a later mark that took the whole of an earlier mark, but incorporated distinctive or non-distinctive additions.

Ultimately, the Court held that the ECJ had not intended to blur the edges of the identity concept a great deal. Given the availability of infringement remedies where marks and goods or services are merely similar and a likelihood of confusion exists, there was no practical need for an identity concept wide enough to catch all uses of very similar marks. Moreover, a finding of infringement under S. 10 (1) (a), which required identity of marks and goods or services, presumed a likelihood of confusion. Such a presumption also supported the idea that the concept of identity could not be far extended, since the greater the differences between marks, the less safely confusion could be presumed.

In assessing whether marks are legally identical under the LTJ test, the Court of Appeal in Reed held that the practical exercise must begin with the identification of the defendant’s sign. This might be straightforward in some cases, as with the defendant’s REED ELSEVIER mark. As that mark included a distinctive addition to REED, the mark to be compared with REED was REED ELSEVIER. It was, however, more challenging to identify the defendant’s mark where descriptive or semi-descriptive words were added. Thus, with the defendant’s mark REED BUSINESS INFORMATION it was arguable that BUSINESS INFORMATION should not be regarded as part of the mark because it was descriptive. Ultimately, however, these words were taken into account because they were not wholly and specifically descriptive, but only descriptive in a general way.

The nature of the marks, too, had to be considered. A device mark or other mark presented in a stylised manner will have a visual impact, and an identical word should not be regarded as an identical mark if the visual stylisation is different. The fact that marks are visually different but phonetically the same does not affect the question of identity. “You can only have ‘identity,’ intoned the judge, “if there is both aural and visual identity.”

In this case, REED was a common surname and the Court held that the average consumer would recognise additional words as differentiating the defendant from all others using the common surname REED. The marks to be compared were not, therefore, REED and REED, but REED and REED ELSEVIER and REED BUSINESS INFORMATION. In so finding, the Court held that the marks were not identical.

 

IBM v. Web-Sphere

The Court of Appeal’s guidance was considered and applied two weeks later in the High Court by Lewison J. in International Business Machines Corp. and Another v. Web-Sphere Ltd. & Others (17 March 2004).

In this case, IBM owned a registered CTM for WebSphere for, inter alia, computer software and communications services. It had launched an enhanced web server under the brand name WebSphere in 1998, and by 2003 had built up a global business under it worth more than U.S. $71 million. The defendant provided Internet-related computer services and changed its name to Web-Sphere Ltd. in June 1999. The defendant aggressively leafleted IBM’s customers claiming that IBM’s trademark rights were invalid and that Web-Sphere Ltd. could provide a comparable web server. IBM sued successfully for trademark infringement; a claim for trade libel failed on the narrow ground that the defendant had acted without malice.

In the trial of the infringement action, IBM argued that Web-Sphere and WebSphere were identical marks. As the services offered by Web-Sphere Ltd. were identical to those for which IBM’s mark was protected, this argument, if accepted, would have led to an automatic finding of infringement unless Web-Sphere Ltd. could make out a defence. Web-Sphere Ltd. argued against identity, contending that the presence of the hyphen was likely to be noticed by the average consumer of computer-related goods and services, since they were likely to think in terms of Internet addresses and would pay particular attention to the presence or absence of a hyphen in a brand name.

The judge held that the marks were identical. Although he recognised that the hyphen would be noticed in a side-by-side comparison, he considered it unlikely to be recollected by the average, notional consumer who remembers marks only imperfectly. Moreover, the defendant’s own evidence included advertising in which the hyphen had been omitted by mistake. Indeed, IBM’s own evidence showed occasional mistaken use of a hyphen in its mark. This difference was therefore inconsequential and not likely to be noticed by the average consumer.

 

Compass Publishing BV v. Compass Logistics Ltd.

In a further case last March dealing with the same issue, Laddie J. in the High Court found that the trademarks COMPASS and COMPASS LOGISTICS were not identical, in Compass Publishing BV v. Compass Logistics Ltd. (24 March 2004).

The claimant was an international business consultancy and owner of registered trademarks for COMPASS obtained in 1988 and 1996 in respect of inter alia business consultancy services.

The defendant changed its name to Compass Logistics International Ltd. in May 1995, and in May 2000 to Compass Logistics Ltd. It traded in management consultancy services relating to logistics under the names COMPASS LOGISTICS and occasionally simply COMPASS, and had an annual turnover of just under £1 million. The claimant sued for trademark infringement in respect of this use.

Although the defendant only used COMPASS on its own occasionally and without any regular plan or pattern, the judge held nonetheless that the use was not de minimis such that it should not be considered. As LOGISTICS alluded to the work undertaken by the company, the most important part of the defendant’s name was the word COMPASS and the use of COMPASS on its own was therefore regarded as deliberate. Subject to any defence or invalidity, there would be an automatic finding of infringement.

The court went on to consider whether the use of COMPASS LOGISTICS was also use of an identical mark. The claimant argued that the marks were identical, because LOGISTICS was descriptive of the defendant’s activities and added nothing of significance to the sign. It cited the judgment of Pumfrey J. in Decon Laboratories v Fred Baker Scientific ([2001] RPC 293), in which the judge had held that use of a mark as a prefix accompanied by a descriptive suffix was use of an identical mark.

Laddie J. found that Decon no longer represented the law following the ECJ’s decision in LTJ. Moreover, “there is nothing in LTJ or Reed to suggest that noticeable differences should be ignored because they have only limited trade mark significance. To avoid infringement, the addition must not only be more than insignificant but it must have trade mark impact…COMPASS LOGISTICS is the name of the Defendant and is used, and would be perceived, as its trade mark.” Applying LTJ, he found that COMPASS LOGISTICS nevertheless differed from COMPASS in ways that would be noticed by the average consumer, and was not therefore identical to COMPASS.

It followed that the infringement claim under S. 10 (1) (a) TMA 1994 failed.

 

 

Comment

 

It is difficult to follow some of the reasoning in Reed and Compass, which appeared to base findings of non-identity partially on an assumption that the words BUSINESS INFORMATION and LOGISTICS were merely allusive of the defendants’ activities, rather than wholly and specifically descriptive of them.

Even if BUSINESS INFORMATION and LOGISTICS are general, they are still unarguably descriptive. The fact that they describe broad fields does not detract from their descriptive capacity. The average consumer is unlikely to place much if any weight on them as indicators of origin, and where they follow a claimant’s distinctive marks, the public is likely to assume that the general descriptors merely denote a branch of the claimant’s business, given the identity of the distinctive elements REED and COMPASS.

In spite of the courts’ remarks, identifying the difference between PALMOLIVE and PALMOLIVE SOAP, as opposed to COMPASS and COMPASS LOGISTICS, is difficult. Where a defendant adopts a claimant’s identical mark and merely adds a descriptor, assessing where the line is to be drawn between identity and mere similarity of marks is likely to prove extremely challenging.

It is clear, however, that in assessing identity of marks the perception of the average consumer is supreme. Even if an element is highly allusive and has no trade mark character on its own, nevertheless if it is included in a mark in a manner that suggests that it is part of the mark, it may be regarded as such. In those cases, an automatic finding of infringement based on identity of marks and goods or services may not be available, and a claimant will have to prove a likelihood of confusion.