The Court of Appeal has held that use of the mark ASOS did create a likelihood of confusion with the trade mark ASSOS; but, by a majority of 2:1, it also decided that Asos could rely on a defence to that infringement since it was using its own name.
The claimants manufacture and sell specialist cycling products (including clothing) under the ASSOS mark, at the top end of the market. Most of these are sold through distributors in-store; Assos does not encourage the sale of the items on the internet, and does not have an online store. It has various registrations for the ASSOS mark, including a Community trade mark (CTM) covering goods including clothing, footwear, and headgear.
Asos, the defendant, founded in 1999 under the name "As Seen On Screen", is an online fashion and beauty retail business. It has always traded purely online, originally selling only other companies' clothing. The acronym ASOS was adopted in 2002. Around 2004, Asos started to sell its own clothing under the ASOS mark (protected by a UK registration for various goods including clothing).
Assos alleged that Asos' selling clothing and other fashion accessories via the internet under the ASOS mark infringed its CTM and constituted passing off, and that Asos' UK mark was partially invalid. Asos counterclaimed for revocation of Assos' CTM claiming that it had only been used in relation to specialist cycling clothing and ancillary products. It also argued that, at the date of filing the CTM and any relevant priority, it had acquired goodwill in the ASOS mark, and that there had been no customer confusion. In any event Asos felt that it should be entitled to rely on the 'own name' defence, since ASOS was its corporate/trading name and had been adopted honestly.
At first instance, the court partially revoked the CTM and ordered that the specification be limited to "specialist clothing for racing cyclists; jackets, t-shirts, polo shirts, track-suit tops, track-suit bottoms, casual shorts, and caps". (Two members of the Court of Appeal have since agreed with this, but deleting the word 'racing'.)
The trial judge found that while ASSOS and ASOS were similar, there was no likelihood of confusion, and that use of ASOS had not damaged the distinctive character or repute of the ASSOS mark. Accordingly, the own name defence did not require examination.
Both parties appealed.
The Court of Appeal has held that the trial judge erred when assessing the likelihood of confusion between the marks. Although she had correctly found that there was no evidence of actual confusion, she had erred by focusing on that alone. She should also have considered notional and fair use of the mark as registered.
The Court of Appeal accepted that neither mark had a conceptual meaning to the average consumer, rejecting the notion that ASOS is recognised as an acronym for "As Seen On Screen". Furthermore, the marks are visually and aurally very similar. The court held that there was a likelihood of confusion, at least in relation to sales by Asos of casual wear and retail services relating to those goods. The court felt that the trial judge should have found similarly, subject to any applicable defences and attacks on the ASSOS registration.
The Court of Appeal also considered whether use of the sign ASOS took advantage of, or was detrimental to the distinctive character or repute of the ASSOS mark. For this ground to succeed, the earlier mark must have a reputation and use of the later sign must call the earlier mark to mind. The trial judge had found no infringement here, but the Court of Appeal again disagreed. It felt that infringement had been made out, since Assos had shown that:
- the ASSOS mark has a reputation;
- use of the sign ASOS gave rise to a link with the ASSOS mark in the mind of average consumers; and
- the ability of the ASSOS mark to identify at least some of the goods for which it was registered as being the goods of Assos had, at least in some circumstances, been weakened.
- The mark had therefore suffered damage.
Own name defence
A key question (on which not all the appeal judges agreed) was whether Asos could rely on the 'own name' defence to infringement.
The defence allows a party (including companies) to use its own name in the course of trade, provided it is in accordance with honest practices in industrial or commercial matters. In this respect it was pertinent that the ASOS name had arisen honestly as an acronym for "As Seen On Screen", and that in 2005 the ASOS logo had been simplified, without any knowledge of Assos. Asos' intentions were also relevant, as was the gradual development of the businesses over several years. Despite not having conducted extensive trade mark searches prior to adopting the ASOS name, taking into account all the circumstances, the majority of the judges found that use of the ASOS name was in accordance with honest practices. Asos had not conducted its business so as to compete unfairly with Assos, and overall could benefit from the own name defence.
One of the three judges disagreed with the majority view on two points:
- The scope of the limitation to the specification of Assos' mark.
- Whether Asos could benefit from the own name defence.
With regard to the first point, the dissenting judge noted that the primary objectives of trade mark protection may be undermined if an unduly narrow formulation is applied to the category of goods covered by a trade mark registration. In his view, if a CTM owner has made genuine use of his mark, albeit narrower than as originally registered, it should still be entitled to a measure of continued protection for future use of the mark. He stated that "A court should be careful not simply to freeze the protection of the CTM for the future by precise reference to what the proprietor has done with the mark in the past."
He considered the proposed limitation to the ASSOS specification to be too narrow, and felt that an appropriate formulation for the present and future scope of the mark's protection would be "specialist clothing for racing cyclists and casual wear".
With regard to point two, the own name defence, the dissenting judge felt that whilst it offered an inroad to the primary objectives of CTM protection, the court should not grant a party an absolute right to use its own name; a balance must be struck. The judge felt that the law required the interests of the CTM proprietor (and the relevant public) to be given significantly more weight than the other judges had allowed. Accordingly he felt that the own name defence should not be available to Asos.
At the time of writing, no further appeal has been filed.
Although Asos was able to rely (somewhat controversially) on the own name defence, the case highlights the importance of conducting full searches before adopting a brand. Internet searches alone are not necessarily sufficient to ascertain whether a new brand is clear to use: relevant third party rights may not be revealed by the search, as was the case here.
The case also shows how difficult it can be to judge the appropriate extent of a trade mark's specification once it is attacked.
Case details at a glance
- Jurisdiction: England and Wales
- Court: England and Wales Court of Appeal (Civil Division) on appeal from the High Court of Justice Chancery Division IP Community Trade Mark Court
- Parties: Roger Maier and Assos of Switzerland SA v ASOS plc and ASOS. com Limited
- Citation:  EWCA Civ 220
- Date: 01 April 2015
- Full decision: http://dycip.com/asos0415