• COURT DIARY

    Genuine Use of a Trade Mark

    A recent UK Court case (Euromarket Designs Inc. v Peters) has examined the tricky question of when the use of a UK registered trade mark on a website operated from outside the UK infringes the UK trade mark right. The facts were these.

    The plaintiff (Euromarket Designs) was a US company who operate a successful chain of stores in the US under the trade mark Crate & Barrel. The stores sell household goods and furniture. Euromarket own various trade mark registrations for their trade mark including a UK and a CTM registration protecting goods in Class 21. However, it does not operate any Crate & Barrel stores in the UK.

    The defendant was an Irish citizen, Ms. Peters, who owned an Irish company that, since 1994, had operated a single store in Dublin called Crate & Barrel. Although there was a dispute as to the way in which Ms. Peters chose the name of her Dublin store, the Court accepted her version that it was derived independently. It was also accepted that the defendant had never sold any products in or to the UK.

    Ms. Peters created a website www.crateandbarrel.ie. At the website, she advertised her Dublin store and the goods sold in the store, including a windproof candle holder and a beaded coaster, goods that were viewed as similar to those protected in Euromarket’s UK and CTM registrations. In addition she advertised her Crate & Barrel stores in the September 1999 edition of a magazine, Homes & Gardens that was published in the UK but circulated in both the UK and Ireland.

    Euromarket sued for trade mark infringement in the UK and sought summary judgement on the basis that the defendant had no realistic prospect of defending the action. Ms. Peters resisted the action and argued as follows against the charge of trade mark infringement:

    • Her use of the trade mark Crate & Barrel at the website and in the advertisement was not use of the trade mark "in the course of trade" in the UK. The use was "in the course of trade" in Ireland.

    • Under Section 11(2)(a) of the 1994 Trade Marks Act, a UK registered trade mark is not infringed if a person merely uses his own name and address in accordance with honest industrial or commercial practices. The term "person" in that Section should be interpreted to include companies and it followed that the Section 11(2)(a) defence should extend to company names.

     

    The English High Court (Mr. Jacob) accepted that Ms. Peters had an arguable defence and refused to grant the summary judgement requested. The Judge made the following important observations on whether or not the website and the advertisement in Homes & Gardens were likely to constitute trade mark infringement in the UK:

    • If a trader from Ireland were trying to sell goods and services into the UK, most people would regard that as having a sufficient link with the UK to be "in the course of trade" there. But if the trader were merely carrying on business in Ireland and an advertisement of his slips over the border into the UK, no businessman would regard that fact as meaning that he was trading in the UK. This would especially be so if the advertisement were for a local business such as a shop or for a local service rather than goods. On the facts, Mr. Jacob took the view that the advertisement in Homes & Gardens was not infringing use in the UK.

    • Quoting from the earlier 800 Flowers case (2000 ETMR 369), "….the mere fact that websites can be accessed anywhere in the world does not mean, for trade mark purposes, that the law should regard them as being used everywhere in the world. It all depends upon the circumstances, particularly the intention of the website owner and what the reader will understand if he accesses the site".

    • A person visiting Ms. Peters’ website would see that it was advertising a shop and its wares. If he knew that "ie" meant Ireland, he would also know that the shop was based in that country. There was no reason why anyone in the UK would regard the site as directed at him.

    • In the present case, the Internet could be viewed as a super-telescope set up on the Welsh hills overlooking the Irish Sea. Via the web (or the super-telescope) it would merely be possible to look into the defendant’s shop.

    • Referring to the defendant’s argument that the use of her Irish company name (Crate & Barrel) was saved from infringement in the UK by Section 11(2)(a) of the 1994 Trade Marks Act (the own name defence), Mr. Jacob ruled that Section 11(2)(a), derived from Article 6(1)(a) of the Harmonisation Directive, did cover the use of a company name and not just the name of an individual. He said that anyone who chose a new company name knowing of an existing reputation in a UK registered mark or simply knowing that a conflicting UK trade mark registration existed would not be acting in accordance with "honest practices". The Judge felt that there was good reason to give immunity to company names provided they were used in accordance with honest practices. A company that had built up a business honestly could be said to be stuck with its name in the same way as an individual. It was unlikely that the honestly derived goodwill in a personal name would be protected by Section 11 of the Act, whilst that in a company name was not.

    • Whether the use of a company name was in accordance with honest practices (and therefore a valid defence to trade mark infringement under Section 11(2)(a)) would depend on the circumstances. The Judge gave the following examples where the use might not be honest:

    • Where the name was knowingly taken from the plaintiff.

     

    Where the use of the name began after the defendant became aware of a trade mark registration that he had no reason to believe was invalid.

    Where the use of the name began after the defendant became aware of a trade mark registration that he had no reason to believe was invalid.

    Where the use of the name began after the defendant became aware of a trade mark registration that he had no reason to believe was invalid.

    • In order to claim protection under Section 11(2)(a), it was not necessary for the company name to be known to the relevant UK public.

     

    The defendant had also challenged the validity of the plaintiff’s UK trade mark registration on the ground that the mark (Crate & Barrel) had not been used in the UK for the 5-year period immediately prior to the launching of the trade mark infringement action. For the following reasons, Mr. Jacob found that there was a realistic prospect of the registration being held invalid in a full action:

    • A few customers in the US shops asked for the goods to be posted to them in the UK. Even though the packaging of those goods would have borne the name Crate & Barrel, this would not amount to genuine use in the UK.

    • It was not possible during the relevant period to order goods over the Internet from the UK or anywhere else outside the US.

    • There was no evidence of anyone outside the US being sent a mail order catalogue. In fact, it appeared impossible to obtain such a catalogue in the UK.

    • A small amount of "spill over" advertising of the US stores in US publications that had some circulation in the UK did not constitute genuine use of the mark in the UK. (This should be contrasted with the comments made by a different judge in the Elle case (1997 FSR 529)).

    • The plaintiff’s own evidence contained clear statements that it did not regard itself as trading in the UK (or anywhere else in Europe) during the relevant period.

    • The plaintiff’s advertisements are essentially for their shops. Some of the goods mentioned in the advertisements fell within their UK specification. However, it was doubtful whether a person reading the advert would regard the use of the shop name as really being "in relation" to the goods. Only a trade mark lawyer would be likely to contend that the act of selling a Kodak film in Boots and putting the film in a bag labelled Boots, would constitute use of Boots as a trade mark for film.

     

    Comment

    This is a very interesting case in which the Judge made a number of trenchant comments on trade mark matters of considerable importance. Although the case only involved an application for summary judgement, it appears to have been fully argued and the defendant’s lawyers analysed the huge body of evidence put forward by the plaintiff in considerable detail. This, in fact, lead the Judge to grant the defendant £45,000 in costs.

    In relation to the use of trade marks at a website, Mr. Jacob’s comments make sense. However, in the writer’s view, it would still be wise for an Irish (or UK) based business to put appropriate disclaimers at its website in relation to the non-availability of goods in (say) the US, if the name of the shop was known to be identical with or similar to a US registered trade mark and the goods sold by the Irish (or UK) shop fell within the specification of the US registration.

    The UK position on honest use of a company name, in the face of a UK registration for a mark that is identical with or similar to the name and which covers conflicting goods, appears to be out of line with a number of other EU jurisdictions, for example Germany. It also runs counter to the Joint Statement made on the relevant provision of the Trade Mark Harmonisation Directive (Article 6(1)(a)) which states that "The Council and the Commission consider the term "his own name"…….. apply only in respect of natural persons".

    Whether the defence offered by Section 11(2)(a) of the 1994 UK Trade Marks Act extends to company names would therefore appear to be yet another question of interpretation of the Directive that will eventually have to be ruled upon by the ECJ.

    Finally, certain of the Judge’s comments on what constitutes genuine use of a trade mark in the UK are out of line with previous judicial pronouncements and with UK Office practice. In the Autumn 99 edition of Make Your Mark, we reported an attempt by a French company (Jean d’Heurs) to cancel a UK trade mark registration for the trade mark Odeon covering "paper, stationery and bookbindings" owned by Rank Leisure. The only evidence of use that Rank Leisure provided in that case was of its sale of Walt Disney posters at its Odeon cinemas. Despite this, the Hearing Officer maintained the registration. He felt that the sale of Heinz baked beans by a supermarket (such as Iceland) would be sufficient to sustain a UK registration for Iceland covering baked beans. Mr. Jacob’s comments appear to contradict this position. In the writer’s view, now that "retail services" can (to all intents and purposes) be protected by registration in the UK, there can no longer be any justification whatsoever to allow, for example, Iceland to maintain a UK registration for baked beans after the 5 year grace period has elapsed unless they are selling their own brand of Iceland baked beans.