Trade mark and Passing Off

What is a trade mark?

Trade marks are registered marks such as a name, a word, a slogan, a logo, a symbol, a design, an image, a sound, a shape, a colour, even a signature, or a combination of any of these, used by a party, usually a business, to distinguish themselves from another party. Famous examples of trade marked symbols and colours include, McDonald’s golden arches logo, Nike’s swoosh logo and Tiffany & Co’s signature colour, Tiffany Blue. The legislation that governs trade marks in the United Kingdom is The Trade Marks Act 1994 (TMA 1994), which defines a trade mark as being any sign capable of:

1) being represented in the register in a manner which enables the registrar and other competent authorities and the public to determine the clear and precise subject matter of the protection afforded to its proprietor; and

2) Distinguishing the goods or services of one undertaking from those of other undertakings.

A trade mark is registrable, if a sign can be represented graphically and can serve the function of distinguishing the goods and services of others. (3) Typically, goods and services are requested by reference to a trade mark, and the public relies on these marks as guarantees of quality or indications of value or origin.

Why is it important to register?

Marks can continue unregistered, as traders using their mark acquire common law rights through use, however, registration is encouraged and advised to maximize one’s legal protection. Registration gives exclusive rights to proprietors over their marks, deterring and preventing imitation by other competitors. A company’s intellectual property is a very valuable asset, and marks are a valuable form of intellectual property, as they are associated with business image, goodwill, and reputation of the company. (3) By registering your mark, you are protecting the business’s reputation and goodwill, and, secondly, protecting consumers from deception. Trade marks prevent the public from purchasing inferior goods or services in the mistaken belief that they originate or are provided by another trader. Upon registration, one will be able to take legal action against anyone who uses your mark without your permission, such as counterfeiters. The ‘registered trade mark symbol’ “®” will be placed next to your brand, showing ownership and warning others against using it. Once registered, you will be able to sell, market, license, advertise, and mortgage your trade mark, as you please. Additionally, if you would want to register a mark internationally, having a registered mark in the UK, is a good base. (7)

How can it be registered in UK?

Any natural or legal person can own a trade mark in the UK. A trade mark can be registered by making an application to the UK Intellectual Property Office of Registration (IPO) online. (5) Before applying, one must make sure the mark is unique and distinctive, not generic. One can search the trade marks database if anyone has already registered an identical or similar trade mark for the same or similar goods or services in the same class. The IPO uses a classification system that groups similar goods and services into 45 classes. Goods are in classes 1 to 34, and services are in class 35 to 45. When choosing a class, one must note that the trade mark will only be protected for that class of goods and services selected in the application. In the case that someone has already registered a trade mark in class 45, you can still register the same mark in 32, if it is relevant. In case, you would want to expand your brand one day, it is recommended to include classes you would want to expand into. There is a charge made for each class covered by an application, but it could save time and money for the near future. (4) Additionally, one must also check the EU trade marks register on the European Union Intellectual Property Office website for any EU applications that were ‘pending’ on 1 January 2021, as they have priority. An application requires the submission of:

1. A request for registration
2. The name and address of the applicant
3. Statement of goods and services in relation to what is sought to register the trade mark
4. A representation of the trade mark
5. A statement that the trade mark is being used by the applicant or with their consent, in relation to those goods or services, or that they have the bona fide intention of so using it.
6. The prescribed fee (3)

7. Additionally, series applications are available for up to six marks, if you have similar versions of your trade mark. Once one has applied, fees are non-refundable and changes to the trade mark are not permitted. The IPO will provide an ‘examination report’, which is feedback on the application, in up to eight weeks (40 working days). If there are no objections, your application will be published in the trade marks journal for two months, where anyone can oppose it. If there is no opposition, then the process may only take 4 months.  If someone opposes, you can withdraw the application, talk to the person making the opposition, or defend your application. Once all matters are settled, you will receive a certificate to confirmation. Once registered, a trade mark lasts for 10 years and can be renewed indefinitely. Yet, all registered marks must be in continuous use, as they can be revoked if they are not used for five or more years. (3)

   Registering Abroad (EU and Internationally)

   In the case that one would want to protect their mark internationally, one may apply to the trade mark office in each country, where protection is sought. However, there are European and international application systems, which make the process cheaper, faster, easier, and with less paperwork, but one must already have an application or registration in the UK.

   One option for protection in European Union member countries is the European Union Trade Mark (EUTM), which covers 27 European Union countries. It is a single unitary registration, enforced throughout the EU, and one can apply at the European Union Intellectual Property Office (EUIPO), based in Alicante, Spain. Anyone can apply and can file an application, and payment must be made in Euros.  (7)

   One can also apply to register one’s trade mark in countries that have signed up to the Madrid Protocol System. It is an agreement, controlled by the World Intellectual Property Organization (WIPO) based in Geneva, Switzerland, and which includes 124 countries. It is convenient and cost effective. The application must be based on an existing trade mark application or registration in one of the member countries. If you applied in the UK, the application must be exactly the same as to the international. The cost depends on which country you want your trade mark to be protected in, and all payments must be made in Swiss francs (CHF) to WIPO. (10)

   What is an infringement of trade mark?

               Trade mark infringement is where there is an unauthorized (without the proprietor’s consent) use of the registered mark by a third party on any good or service that is identical or similar to the registered good or service, or even for a dissimilar good or service where the trade mark has a reputation and that use is detrimental to the mark. For each case of infringement, there is also the likelihood of confusion to the public, as there is an association with the mark. It is a tort actionable at the suit of the trade mark proprietor or licensee. (6) Activities that result in infringement are attaching the mark to goods or packaging, selling goods or services under the mark, importing or exporting goods under the mark, or using the mark on promotional material.

   In 2007, the ECJ set out a four-step analysis of whether the use of a sign constituted infringement in Céline Sàrl v Céline SA, Case C-17/06, which was adopted by the High Court in RxWorks Limited v Dr Paul Hunter [2007] EWHC 3061 in relation to a summary judgment application. The following conditions had to be present:

8. The use is in the course of trade.
9. The use is in relation to goods and services.
10. There is no consent from the trade mark proprietor.
11. The use affects, or is liable to affect, the functions of the trade mark.

12.  

    It can be a criminal offense as well, like counterfeiting and piracy.

     

    Remedies of Trade mark Infringement

    Civil remedies for infringement include monetary damages, injunctions, account of profits, or a delivery up or disposal of the offending product. (8) Criminal penalties are available as well. Serious trade mark offences carry a maximum of ten year prison terms on indictment or an unlimited fine. Although in a criminal case, there would not be a right to damages, under the Proceeds of Crime Act 2002 (POCA 2002), it is possible to seek a confiscation order. (9)

    Passing Off

    As mentioned briefly before, marks do not have to be registered to acquire rights. Rights of ownership associated with a mark are established by gradual use over time, but less legal protection is offered when a mark is unregistered. In the UK, a passing off action can protect unregistered marks. Unlike trade mark law, where registration confers monopoly rights to a mark and offers statutory protection, passing off is designed to prevent misrepresentation to the public. Considered a common law version of trade mark infringement, passing off occurs when a business, intentionally or unintentionally, misleads customers into believing their goods were actually those of another supplier in order to benefit from the reputation the other supplier upholds. (11) Here a trader is marketing another business’s goods or services as their own, and often, this misrepresentation damages the goodwill or reputation of the claimant’s business and can cause financial damage as well.

    Remedies available in a successful passing off claim include injunctions, the destruction of the infringing goods, money damages, or an accounting of lost profit, but there are no criminal penalties because passing off is not a criminal offence. (12)  The evidential burden of proof is solely on the claimant, the owner of the mark.

    These claims can be hard to prove. Goodwill and likelihood of damage are interrelated. If a claimant struggles to prove goodwill, then they will likely not prove that there was material damage. Typically, market survey evidence must be submitted as proof that their goods or services acquired goodwill and reputation in the relevant marketplace as well. In the Jiff Lemon case (Reckitt & Colman Products Ltd v Borden Inc [1990] UKHL 12), Reckitt & Colman had been selling lemon juice in a lemon shaped plastic container in the UK, since 1956. The public eventually identified the plastic lemon container with their brand of lemon juice, “Jiff”. Meanwhile in the United States, Borden, an American company, had been selling lemon juice in a lemon-shaped plastic container, which was very popular in the US, under its own brand “ReaLemon”. In 1975, Borden entered the UK market, and by the end of 1980, ReaLemon had 25% of the total lemon juice market in the UK. Reckitt & Colman filed a lawsuit to stop the American company and was successful in the lower courts. However, Borden took the case to the House of Lords, where the question was whether Borden’s use of a lemon container was misrepresentation. In the House of Lords, Lord Oliver set out a three part test, known as the “classical trinity”, which is now used throughout the courts and that a claimant must establish to succeed in a passing off action:

13. Establish the goodwill or reputation attached to the goods or services, which would be distinctive to the public.

14. Demonstrate that the defendant has misrepresented to the goods or services public (intentionally or unintentionally), misleading the public to believe that the goods or services offered by the defendant are the goods or services of the claimant.

Establish that the defendant has caused damage to the claimant through the misrepresentation.

The House of Lords affirmed a permanent injunction barring Borden from marketing a lemon-shaped container to sell its lemon juice in the UK, having concluded that the three elements were met. Since 1956, Reckitt & Colman had marketed their lemon juice in the distinctive container. Lord Oliver observed that supermarkets tended to sell only one brand and possibly their own house brand of preserved lemon juice. As Reckitt & Colman had summited their survey evidence, he noted from the survey that “a housewife presented with a display of these products in close juxtaposition would be likely to pick up . . . the [ReaLemon] product in the belief that what she was buying was the respondents’ Jif lemon juice”, as she, like other customers, believed Jif was the only “lemon-sized squeezy pack of lemon juice on the market.” (13)(14) So, many shoppers would inevitably purchase Borden’s lemon juice, believing they were purchasing Reckitt & Colman’s. If Jiff lemon had been a registered trade mark, an infringement case would have been much simpler. All that would have to be established is if Borden’s ReaLemon container was identical or similar to the Jif lemon and that allowing the ReaLemon container in the market would likely cause public confusion. (14)

Passing Off for an International Business

In our interconnected world today, the goodwill and reputation of an established business in another country can certainly extend beyond national borders into an international market.  Yet, for a mark in the UK to be protected, not only must the reputation be identifiable in the UK, it must have significant goodwill in the sense of a notable customer base and have an appreciable trade in the goods and services offered within the UK. If a business conducts trade completely outside of the UK, it will struggle to establish goodwill here. In the case of Starbucks (HK) Limited and another (Appellants) v British Sky Broadcasting Group PLC and others (Respondents) [2015] UKSC 31, the appellants (PCCM) were a group of companies based in Hong Kong that, since 2003, had provided a closed circuit IPTV service in Hong Kong called “NOW TV”. By 2012, NOW TV had become the largest pay TV operator in Hong Kong with around 1.2 million subscribers. In the UK, people could not receive closed circuit service, and therefore, were not subscribed to NOW TV. However, a significant number of Chinese speakers, permanently or temporarily residing in the UK, were aware of the service from having lived or visited Hong Kong, or from viewing it online in the UK. Then in 2012, the appellants launched a NOW player “app” in the UK on its website and on the Apple Store. Meanwhile, in July 2012, British Sky Broadcasting (Sky) launched an IPTV service under the same name “NOWTV”.  By April 2012, PCCM began proceedings to bar Sky from using the name NOW TV with their service in the UK, claiming passing off. Although the judge acknowledged that PCCM had a significant reputation among the UK Chinese-speaking community, he held that the key question was whether the viewers of PCCM’s programmes in the UK were “customers”. (15) The Court decided that it was not enough for it to have a reputation, if there was no goodwill in the UK, which led to the dismissal of PCCM’s claim. In appeal to the Supreme Court, the claim was once again dismissed.  The people in the UK, who had access to PCCM’s NOW TV through websites, were not PCCM customers in the UK because there was no payment involved and the availability of PCCM’s product was intended to promote PCCM’s Hong Kong business.(16) For the case to have been successful for PCCM, they would have had to should that not only did they have a reputation but that they had customers among the general UK public, as a representation of their goodwill. Finally, although passing off can provide for the opportunity to protect an international business’s mark in the UK, it comes with its challenges, and trade mark registration is observed as a better choice in these circumstances.

Conclusion

When it comes to protecting one’s mark, trade mark registration offers the maximum legal protection against other competitors, providing exclusive rights over one’s mark and preventing imitation by competitors. Not only can one protect their mark in the UK, but with relative ease through the international registration systems like the EUTM or the Madrid Protocol System. Furthermore, although passing off is a very flexible and valuable form of protection for a company’s goodwill in a wide range of circumstances, it can be very challenging and expensive when compared to a trade mark infringement claim that is more straightforward.

Sources:

1. 1. Trade Marks Act 1994
2. 2. Apply to register a trade mark:https://www.gov.uk/how-to-register-a-trade-mark/what-you-can-and-cant-register
3. 3. 4, Bainbridge, David; Intellectual Property - Fifth Edition
4. 4. How To Classify Trade Marks: https://www.gov.uk/guidance/how-to-classify-trade-marks
5. 5. Apply to register a trade mark: https://www.gov.uk/how-to-register-a-trade-mark/start-your-application
6. 6. Part I Registered Trade Marks (ss 1-50) - 14: https://www.lexisnexis.com/uk/legal/search/enhRunRemoteLink.do?linkInfo=F%23GB%23UK_ACTS%23sect%2514%25num%251994_26a%25section%2514%25&A=0.5914158400107885&backKey=20_T294524399&service=citation&ersKey=23_T294524351&langcountry=GB
7. 7. UK Trade Marks - The Basics: https://www.mewburn.com/law-practice-library/uk-trade-marks-the-basics 8. https://www.humphreys.co.uk/commercial/trademark-infringement/
8. 8. https://www.humphreys.co.uk/commercial/trademark-infringement/
9. 9. Civil and criminal remedies for intellectual property infringement: https://www.squirepattonboggs.com/-/media/files/insights/publications/2013/11/civil-and-criminal-remedies-for-intellectual-
10. 10. Protecting your trade mark abroad: https://www.gov.uk/government/publications/protecting-your-uk-intellectual-property-abroad/protecting-your-trade-mark-abroad
11. 11. UK: How To Prove 'Passing Off': https://www.mondaq.com/uk/trademark/655778/how-to-prove-39passing-off39
12. 12. Trade marks: https://www.nibusinessinfo.co.uk/content/passing-definition-remedies-and-defences 
13. 13. Reckitt & Colman Products Ltd v Borden Inc [1990] UKHL 12)
14. 14. Passing Off: The Jif Lemon Case (Reckitt & Colman Ltd v Borden Inc) https://www.tannerdewitt.com/passing-off-the-jif-lemon-case-reckitt-colman-ltd-v-borden-inc/
15. 15. Starbucks (HK) Limited and another (Appellants) v British Sky Broadcasting Group PLC and others (Respondents) [2015] UKSC 31
16.  16. Starbucks (HK) Limited and another (Appellants) v British Sky Broadcasting Group PLC and others (Respondents) [2015] UKSC 31- Press Summary