In the recent case of J.W. Spear & Sons Ltd & Others v Zynga Inc [2015] EWCA Civ 290 the Court of Appeal considered trade mark infringement and passing off claims brought by Mattel, who control the rights in SCRABBLE in the EU, in relation to social gaming company Zynga's SCRAMBLE and SCRAMBLE WITH FRIENDS apps.

As part of its decision the Court thwarts an attempted extension of the principle in Specsavers v Asda, concluding that although the way the registered mark has been used can be relevant in assessing a likelihood of confusion in an infringement context, this is limited to elements which affect the registered mark itself, not associated branding features used in conjunction with the mark.  

Business impact

  • Although Mattel was successful on other grounds, the outcome is surprising in that Zynga’s online “look-a-like” SCRAMBLE was found not to infringe the SCRABBLE trade marks, even though the visual appearance is one of near identity (given the strength of recognition of the SCRABBLE mark).
  • However, it is a reminder of the importance for a trade mark proprietor in identifying sufficient instances of actual confusion through consumers (or press or distributors) to support its case.
  • It is also a reminder to businesses of the risk of tolerating a competitor or newcomer, where their initial use may not be unacceptable, of how the use of that product may develop. Here, Mattel hoped to partner Zynga in developing board versions of some of their electronic games, but unfortunately Zynga selected competitor Hasbro in the end.

Background

The claimants (for convenience, "Mattel") own the rights in the well-known game SCRABBLE in the EU. The defendant, Zynga, is the world's largest social gaming company. This dispute concerns Zynga's sale of an electronic word game called SCRAMBLE or SCRAMBLE WITH FRIENDS.

Mattel owns four Community trade marks ("CTM"): SCRAMBLE, SCRABBLE (word), SCRABBLE (logo) and a tile logo. The tile logo mark was invalidated by Zynga in separate proceedings, so it was no longer relevant in this case (see here for earlier update). 

SCRABBLE was first sold in the EU in 1954. In 2010 more than half of the households in Britain owned a SCRABBLE board game. The SCRABBLE app for iPhone and iPad has been downloaded 2.4 million times since 2009.

The first edition of Zynga's SCRAMBLE game was launched in November 2007 with a get-up easily distinguishable from SCRABBLE, using brown tiles in a four-by-four or five-by-five grid. Zynga's game has different rules to SCRABBLE, the aim being to connect adjacent letters which appear in a grid to form words in a set time limit. From 2007 to 2011 Zynga released new editions of its game, each keeping the core SCRAMBLE element in the title but moving to white circular pieces on the same grid. By 2012, Zynga had acquired Newtoy, which owned a number of games including the popular app WORDS WITH FRIENDS. At this point, Zynga released SCRAMBLE WITH FRIENDS and replaced the circular pieces with rectangular white tiles to keep in line with the WORDS WITH FRIENDS series of games.

Mattel sued Zynga for trade mark infringement and passing off based on its CTMs and its unregistered rights in SCRABBLE.

The first instance decision

At first instance, Peter Smith J found almost entirely for Zynga. Although there was clear infringement of Mattel's SCRAMBLE mark, the registration was invalid or liable to be revoked because it consisted of a sign which was descriptive and had become customary in the language or in the bona fide practices of the trade or generic.

The judge held that there was no infringement of Mattel's two SCRABBLE marks because there was no similarity between SCRAMBLE and SCRABBLE. There was no passing off. Mattel had a minor win at trial in relation to Zynga's logo (see below), which the judge held was an infringement of the SCRABBLE mark because, using a "quick glance” test, the consumer may read the stylised M as a B.

Both parties appealed.

Click here to view image.

The Court of Appeal decision

Lord Justice Floyd wrote the leading judgment (with which Patten and Tomlinson LJJ agreed), delivering a victory for Mattel. The Court agreed with the trial judge's finding that there was clear infringement of Mattel's SCRAMBLE registration. However, it reversed the invalidity finding, holding that although there is a descriptive allusion in SCRAMBLE (related to a rushed activity), it was not enough to invalidate the mark for descriptiveness. As for the customary in trade or generic point, the Court held that this was a high bar to meet and the evidence at trial did not come near to establishing these grounds for invalidity. Therefore, Mattel has a valid mark and there was clear infringement of it.

The Court upheld the finding that there was no confusion based infringement or passing off with respect to the SCRABBLE marks. However, Floyd LJ is critical of the trial judge's assessment that there was no similarity between SCRAMBLE and SCRABBLE, stating that this conclusion "cannot be supported" as there are clear visual, aural and conceptual similarities. Despite this and taking everything into account, the Court was not convinced that there was sufficient evidence to overturn the finding of no infringement. The main reason for this was that Floyd LJ would have expected to see much more evidence of actual confusion by the date of the trial. Therefore, the combination of the following factors with the small differences between the marks and the sign must have been enough to avoid the risk of real confusion occurring amongst a significant proportion of the public:

  • the descriptive allusion within the SCRAMBLE sign; 
  • the extensive and pervasive use of SCRAMBLE by Zynga; and
  • the circumstances in which a user downloads an app give the person the opportunity to look at it closely before deciding to purchase. 

The Court dismissed any reputation based infringement claim, stating that it was not convinced that Mattel has established any relevant advantage or detriment.

Regarding the stylised M in Zynga's logo, the Court reversed the first instance decision and held that this did not infringe Mattel's SCRABBLE registrations. The "quick glance" test is not the test and in any event Floyd LJ would have expected to see more evidence of confusion if confusion were likely.

Contested points of law

Two of the areas of law on which the parties did not agree gave rise to interesting discussions in the Court of Appeal. Each of these concern argument regarding the infringement of the SCRABBLE trade marks, which ultimately was not found.

Is there a minimum threshold of similarity? 

Counsel for Zynga invited the Court to read the trial judgment as holding that SCRAMBLE and SCRABBLE were not sufficiently similar to give rise to a risk of confusion, rather than not being similar at all. Floyd LJ concludes that although this makes sense, even if this is so, the trial judge must have erroneously applied a minimum threshold test of similarity. This principle would hold that there is a threshold of similarity that mark and sign must reach before the court needs to assess likelihood of confusion.

Floyd LJ confirmed that there is no minimum threshold test, stating it  to be "wrong in law". Instead, if there is any similarity between mark and sign, the court must assess the likelihood of confusion. Certainly if there was no overall similarity at all, then the court would be justified in declining to consider the likelihood of confusion. However, such a result was not likely to occur often in contested litigation and definitely did not occur here.

Keeping Specsavers in check: can a trade mark proprietor rely on elements which are used in conjunction with its trade mark in the assessment of confusion?

In Specsavers v Asda the Court of Justice of the European Union held, in an infringement context, that elements which are not reflected in the representation of the claimant's mark on the register, namely the colour in which the mark is actually used, may be relevant in assessing the likelihood of confusion resulting from the use by the defendant of its sign in that colour. (See here for earlier update). Counsel for Mattel sought to extend this principle to cover elements which appear routinely in immediate association with the registered mark. It argued that Mattel had used SCRABBLE together with tiles, numbers and premium word scores and a 'woodland green' background colour which added to the likelihood of confusion given the similarities in Zynga's games.

The Court of Appeal rejected this extension of the Specsavers decision. The extraneous matter in Specsavers (the colour in which the mark was used) affected how the average consumer of the goods perceived the trade mark itself. Floyd LJ held that the elements used in association with the mark which Mattel relied upon were “not matters which affect the average consumer's perception of the mark itself.” Therefore, the comparison was to be between Mattel's mark as registered and Zynga's signs as they would appear in use, including the context in which Zynga's signs were used.

This is a useful constraint on the decision in Specsavers and ensures that a trade mark proprietor’s rights in its trade mark do not extend to other features used in association with the mark, an argument best left to a passing off claim.