The Court of Appeal has held that use of the ASOS brand by the well-known online clothing retailer, Asos, created a likelihood of confusion with and damaged the distinctive character of the earlier ASSOS Community Trade Marks owned by Assos, the specialist cycle clothing retailer, but Asos could nonetheless rely on the 'own name' defence to avoid trade mark infringement.

Background

Assos had registered a Community Trade Mark ('CTM') in 2005 for ASSOS in respect of, among others, clothing, footwear and headgear. Asos, which had previously been known as 'As Seen on Screen', had been using the acronym ASOS since the early to mid-2000s.

Assos brought trade mark infringement proceedings against Asos in respect of its use of ASOS on its website www.asos.com and on its own label clothing. Asos denied infringement, relying in particular on the 'own name' defence, and counterclaimed for both revocation of the CTM on the basis of non-use, and invalidity of the CTM on the basis of its own prior rights.

High Court decision

In the High Court, Mrs Justice Rose held that:

  • The average consumer was not likely to be confused and therefore Assos' infringement case failed, despite finding that the marks were very similar.
  • Although Assos had a reputation in the EU amongst cyclists, this did not extend to the general public, and the distinctive character or repute of ASSOS was in no way diminished or damaged by use of the sign ASOS.
  • It was unnecessary to decide the question of whether the 'own name' defence (which provides that a proprietor of a trade mark shall not be entitled to prohibit a third party from using his own name in the course of trade in accordance with honest commercial practices) applied as there was no infringement.
  • The CTM relied upon by Assos was partially revoked and limited to: "Specialist clothing for racing cyclists, jackets, t-shirts, polo shirts, track-suit tops, track-suit bottoms, casual shorts, caps".

Court of Appeal decision

The Court of Appeal, led by Lord Justice Kitchin, unanimously overturned two elements of Mrs Justice Rose's decision by finding that:

  • Mrs Justice Rose had wrongly focused on the specialist clothing covered by the specification. According to the Court of Appeal, the Judge should have considered the 'notional and fair use' of the, albeit, cut down CTM specification, which still included non-specialist clothing. On the Court of Appeal's own assessment there was a likelihood of confusion on the part of the public, at least in relation to the sale by Asos of casual wear and the provision of its retail services in relation to such casual wear. 
  • There was or would be damage to the distinctive character of the CTM in that "the ability of the mark ASSOS to identify at least some of the goods for which it is registered as being the goods of Assos has, in some circumstances amounting to a normal and fair use of that mark, been weakened".

The Court of Appeal was however split over the application of the own name defence and the extent to which the CTM specification should be revoked.

Own name defence

In reaching the decision that Asos could rely on the 'own name' defence, the following facts were of particular relevance:

  • the parties had adopted their names independently;
  • Asos did not conduct a trade mark search which would have identified Assos' trade mark application;
  • the parties did not anticipate confusion in 2006 and no actual confusion had arisen in practice, nor was actual confusion likely in the future given the parties' use of their respective brands (as opposed to the likelihood of confusion arising from the notional and fair use of the CTM); and
  • Asos had purchased ASSOS as a keyword only to cover misspellings of its name and although it had sold cycling clothing on its website, these activities had stopped prior to trial.

The majority decided on balance that Asos had "fulfilled their duty to act fairly in relation to Asos' legitimate interests and had not conducted their business so as unfairly to compete with Assos". As a result the 'own name' defence applied.

Lord Justice Sales (dissenting) preferred to place more emphasis on the rights of the CTM proprietor and the public in not being confused as set out in the recitals to the Community Trade Mark Regulation and considered that the own name defence was not available to Asos.

Revocation

Whilst the Court of Appeal upheld Mrs Justice Rose's revised specification for the CTM with the proviso that the word 'racing' be removed, Lord Justice Sales (dissenting) held that the category 'casual clothing' was appropriate (as opposed to listing out every item) as it was the smallest category which encompassed the selection of items on which use had been proved.

Comment

The Court of Appeal decision is particularly interesting because of the application of the own name defence and the dissenting judgment of Lord Justice Sales.

It's also worth noting that the Court of Appeal majority placed significant emphasis on the fact that there had been no actual confusion. Trade mark proprietors should bear in mind that whilst actual confusion is not a prerequisite for infringement, its absence may be crucial, particularly when both parties have coexisted for a significant period of time. 

In contrast, Lord Justice Sales preferred a balancing of interests between the trade mark owner and the potential infringer, finding that the trade mark rights should be given primacy, resulting in a much narrower own name defence.

A further appeal to the Supreme Court may well be pursued by Assos, so we may find that the scope of the own name defence is tested again and has another twist in it yet.