The UK High Court has given guidance on this issue in a trade mark dispute in which Daimler AG claimed that Sany Group Company Limited had infringed its well-known three-point star Mercedes device marks (four UK national marks and two community trade marks in classes 7 and 12).
Sany counterclaimed for revocation for five years non-use of most of the goods identified in Daimler's specification. Sany requested that Daimler's specifications be cut down to 'motors and engines' (except for land vehicles) in its class 7 registrations and 'passenger cars', 'vans', 'coaches', 'buses', 'trucks' and 'truck chassis' in its class 12 registrations.
In this dispute the deputy judge also applied the European Court of Justice's (ECJ) guidance in L'Oréal v Bellure to Daimler's only remaining infringement claim under Article 5(2) of the Trade Marks Directive and the equivalent provision under the Community Trade Mark Regulation (Article 9(1)(c)). Daimler claimed that Sany's use of its "similar" devices took unfair advantage of the reputation of Daimler's marks. The respective marks are shown in the paragraphs one and six of an earlier interim judgment.
Background
Sany is the Chinese parent company of a large group that sells construction engineering machinery typically for road building (including self-propelled and truck-mounted construction machines). It sells its goods under and by reference to its allegedly similar mark in various countries around the world, including the United Kingdom.
Revocation for non-use
In response to Sany's counterclaim, Daimler conceded at the beginning of the trial that certain items should be deleted from its specifications. For example, it agreed to remove from its class 7 specifications "boilers for use in agriculture" and "incubators for eggs! However it sought to maintain several broad descriptions even though these terms covered many goods in respect of which the marks had not been used.
The deputy judge dealt with the revocation claim first, noting that the degree of similarity of goods may be relevant to the infringement assessment. She acknowledged that the issue of "whether a registration is to be restricted to precisely the goods in respect of which use is shown or some other wider class, and if so, what are the criteria by which that class is established, may properly... be an issue which should be referred to the ECJ". However, she decided that she need not make such a reference, hinting that a higher court may decide to do so later.
Instead, the deputy judge, having considered the evidence of use in great detail, applied the following principles established in previous UK cases, to determine what the specification should now be:
- The court must find, as a fact, in relation to which goods and services there has been "genuine use'" of the trade mark concerned during the relevant period;
- The court must then arrive at a fair specification having regard to the use made;
- In doing so the court is not constrained by the existing wording of the specification of the goods and in particular is not constrained to adopt a blue-pencil approach;
- The court should strike a balance between the respective interests of the proprietor, other traders and the public having regard to the protection afforded by a registered trade mark;
- In order to decide what is a fair specification, the court should inform itself about the relevant trade and then decide how the average consumer would fairly describe the goods in relation to which the trade mark has been used;
- The notional average consumer in this exercise is deemed to understand the purpose of the description as defining the scope of infringement protection;
- What is a fair description depends on the nature of the goods, the circumstances of the trade and the breadth of use proved; and
- The exercise of framing a fair specification is a value judgement.
In her view a fair specification "identifies and defines not the particular examples of goods for which there has been genuine use, but the particular categories of goods they should realistically be taken to exemplify, and to a terminology which accords with the perceptions of the average consumer of the goods concerned."
With this in mind, she concluded that Daimler's specifications (as deleted and amended by concession) represented a fair balance between the interests of Daimler, other traders of like goods and the public. This was despite the fact they had included Nice Classification class headings such as "vehicles for locomotion by land" in class 12. This description, in her opinion, "fairly describes the category into which the goods [for which use had been established] fall and an average consumer would fairly describe them in this way."
Infringement
The deputy judge considered the guidance the ECJ gave in the L'Oréal v Bellure case concerning trade mark infringement of marks with a reputation based on an argument that the infringer has taken unfair advantage of such reputation (Article 5(2) of the Trade Marks Directive and Article 9(1)(c) of the Community Trade Marks Regulation). However, she concluded that despite the reputation of Daimler's marks, Sany's marks were not sufficiently similar to bring Daimler's mark to mind and so the lack of similarity meant that the required mental link or association in the mind of the average consumer was absent.
She went on to confirm that had she held such a link to have been established, she would, in any event, have concluded that the "little evidence...[presented to her] on the point" did not establish that Sany would have obtained any "leg up" or advantage by the calling to mind of the Daimler marks. The evidence did not show that Sany's marks and the alleged similarity to Daimler's marks would have "incited consumer interest in Sany's goods or services by adding allure and prestige to them".
Furthermore, there was no evidence of any intent by Sany when adopting its logo to obtain such an advantage. There was no real attack on Sany's evidence that its mark was "its long-established and innocently adopted corporate logo." This focus on intent derives from the ECJ's guidance in L'Oréal v Bellure, although trade mark infringement is not generally an intention-based tort.
Comment
Although the ECJ's guidance in L'Oréal v Bellure theoretically made the claims of infringement based on taking unfair advantage easier to bring, it is notable that the first two applications of this guidance by the English High Court have resulted in findings of "not infringed". Accordingly it remains the case that, so far, there has yet to be a single successful case of infringement under Article 5(2) of the Trade Marks Directive (or Article 9(1)( c) of The Community Trade Mark Regulation) in the English courts where infringement has not also been established under Article 5(1)(b)(which requires a finding of a likelihood of confusion as to origin).