• COURT DIARY

    Counterfeiters Say Uh-Oh

    Since its earliest days of television broadcasting, the BBC has shown entertaining and educational programmes aimed at young, pre-school children. The writer only has to cast his mind back to Bill & Ben (The Flowerpot Men), Andy Pandy and The Woodentops to be overcome by a feeling of nostalgia and a longing for simpler and less demanding times.

    The latest example of this genre is The Teletubbies, a programme featuring four brightly coloured characters who live in a fantasy world known (appropriately) as Teletubbyland. The four Teletubbies are called Tinky Winky, Dipsy, Laa Laa and Po. Tinky Winky is purple and the largest, gentlest Teletubby. He is also known to carry a magic bag. Dipsy is green, wears a very stylish hat and sings a somewhat repetitive song “Bup-a-tum, bup-a-tum, bup-a-tum”. Laa-Laa is yellow and the silliest Teletubby. She sings an even more repetitive song “Laa-laa-li-laa-laa-li-laa-li-laa”. Last, but by no means least, there is Po, who is red and the smallest Teletubby. She tends to spend much of her time zooming around the hills of Teletubbyland on her scooter. All four Teletubbies regularly greet the rest of the world with the salutation “Eh-Oh”.

    Since its first airing on the BBC in March 1997, The Teletubbies has become a hugely popular programme both in the UK and elsewhere. Its profile was raised considerably when Tinky Winky, the “handbag” carrying, purple Teletubby was accused in the US of being gay.

    Of course, where there is a successful TV programme, there will now also be a related merchandising campaign. The Teletubbies are no exception. Dolls in the likeness of the four characters have proved to be extremely popular children’s toys. Clothing bearing likenesses of The Teletubbies as well as the word Teletubbies have been equally popular.

    Where there are popular consumer products, counterfeit versions of those products will also be available, even in the quiet English coastal region of Torbay, it seems. Which brings us to Mr Satnam Singh, a market trader operating in the Torbay area. In November 1997, when there was apparently a widely publicised shortage of Teletubbies merchandise, Mr Singh obtained T-shirts and tracksuits bearing the word Teletubbies from an unauthorised source. The source had given Mr Singh assurances to the effect that the merchandise

    • Was not counterfeit, and

    • Did not infringe any registered trade mark.

     

    Mr Singh had also made independent enquiries, as to the status of the word Teletubbies as a registered trade mark, in a publication known as the Drapers Record but had been unable to glean any relevant information from that (no doubt) esteemed publication. He was therefore unaware of the registered status of Teletubbies as a trade mark.

    On this basis, Mr Singh began to sell the Teletubbies merchandise in the Torbay area. It will probably not come as a surprise to learn that the assurances given by the unauthorised source turned out to be worthless. The clothing was counterfeit and was identified as such by Torbay Council. The Council therefore brought charges against Mr Singh before Torbay Justices under Section 92(1)(b) of the Trade Marks Act 1994. The relevant part of Section 92 is in the following terms,

    92(1) A person commits an offence who with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor...

    a. applies to goods or their packaging a sign identical to, or likely to be mistaken for, a registered trade mark, or

    b. sells or lets for hire, offers or exposes for sale or hire or distributes goods which bear, or the packaging of which bears, such a sign,...

    This is a criminal provision and offenders can, in principle, be imprisoned if found guilty.

    Before the Torbay Justices, Mr Singh relied on the defence offered by Section 92(5) of the 1994 Act. This states that

    “It is a defence for a person charged with an offence under this section to show that he believed on reasonable grounds that the use of the sign in the manner in which it was used, or was to be used, was not an infringement of the registered trade mark”.

    Given the enquiries made by the defendant and the fact that he was unaware of the registered trade mark protecting Teletubbies, the Justices acquitted Mr Singh. Torbay Council appealed to the English High Court (Torbay Council v Satnam Singh). In a significant judgement, the Court granted the appeal. They made the following important rulings,

    • It was not necessary, in order to succeed under Section 92(1), for a trade mark owner to prove either the defendant’s knowledge of or his intent to infringe a registered trade mark.

    • Section 92(5) presupposes an awareness by the defendant of the existence of the registration against which he can match his manner of use of the otherwise offending sign.

    • The question that should be addressed by a Tribunal considering an action brought under Section 92(1) is “Did the defendant have a reasonable belief that his manner of use (emphasis added) of the sign did not infringe a registered trade mark that he knew about or was taken to know about?”

     

    Comment

    This decision will be welcomed by trade mark owners faced by an increased level of counterfeit activity in the UK. As Lord Justice Auld commented in the decision,

    “If the regime introduced by the (1994) Act is to operate as an effective protection both to registered proprietors of trade marks and consumers, it cannot sensibly depend on proof in every case of the trader’s knowledge of the existence of the registration of the trade mark allegedly infringed, or on rebuttal of his assertion that he was unaware of the registration or its detail. Whilst this might be a workable approach with large retailers with sophisticated administrative and legal controls, it would not be so where protection is most needed, against market traders and other small retailers who may obtain their wares from disreputable and/or, as in this case, untraceable, suppliers”.

    Counterfeiting is big business. It transfers funds from the honest, tax paying economy to the dishonest, tax evading economy. There is also clear evidence that it is increasingly an organised, criminal venture. The easier it becomes for trade mark owners to prevent such activities using the provisions of the 1994 Trade Marks Act, the more likely honest traders will be able to sell their legitimate goods.