First instance decision
Court of Appeal decision
In what may be the final twist in Specsavers' long-running dispute with Asda over the Asda Opticians advertising campaign, the Court of Appeal has upheld in part Specsavers' appeal against a 2010 High Court decision that (largely) rejected Specsavers' claims that Asda's use of certain straplines and logos infringed Specsavers' Community trademarks.
The dispute is a prime example of the murky waters into which marketers wade when they try to create a campaign that is based on a competitor's brand, but differs just enough from the original idea to avoid claims of infringement - a tactic referred to in this case as "living dangerously". Even without customer confusion, such tactics may amount to taking unfair advantage of a competitor's trademarks.
The Community Trademark Regulations prohibit the use, in the course of trade, of:
- any sign where, because of its identity with, or similarity to, a Community trademark and the identity or similarity of the goods or services covered by the Community trademark and the sign, there exists a likelihood of confusion on the part of the public - the likelihood of confusion includes the likelihood of association between the sign and the Community trademark (Article 9(1)(b)); and
- any sign that is identical or similar to a Community trademark in relation to goods or services which are dissimilar to those for which the Community trademark is registered,(1) where the Community trademark has a reputation in the European Union and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or repute of the Community trademark (Article 9(1)(c)).
The case concerned an Asda advertising campaign from 2009 to relaunch Asda's in-house optician service.
The evidence showed that one of Asda's key aims was to take market share from Specsavers (then the market leader), and Asda's campaign was deliberately pitched to parody Specsavers' own logo and slogans.
Asda Opticians was initially promoted using a logo featuring two adjacent white ovals with the words 'Asda Opticians' written within them in green. Specsavers' own established logo was two overlapping ovals in green, with the word 'Specsavers' written in white. Specsavers had a series of Community trademarks in respect of its logo and a wordless logo featuring the overlapping ovals without the word 'Specsavers'. Specsavers also had Community trademarks for SPECSAVERS as a word mark.
Asda also used two straplines in its campaign: "Be a real spec saver at Asda" and "Spec savings at Asda".
At first instance, Specsavers' claim for passing off was rejected. The judge found no evidence of misrepresentation, given that the campaign featured so much of Asda's own branding; nor did he find a likelihood of confusion as to the origin of the service under Article 9(1)(b) of the Community Trademark Regulations, despite evidence that Asda had set out to ensure that its campaign would resonate with the Specsavers brand.
However, the judge found infringement under Article 9(1)(c) in respect of the first strapline: "Be a real spec saver at Asda". By using the phrase 'spec saver', Asda was plainly calling to mind Specsavers' trademark and, inevitably, all aspects of the Specsavers brand, such as its reputation for value. He considered that this took unfair advantage of Specsavers' Community trademark within the meaning of Article 9(1)(c). However, the judge did not accept that the same was true of the second strapline or the Asda Opticians logo. He felt that the second strapline's link to the Specsavers' brand was much weaker than that of the first and would not give the same boost to Asda's service. In respect of the logo, he found that the link was very weak and was heavily countered by the inclusion of 'Asda' wording.
Furthermore, the judge found that Specsavers' wordless logo should be revoked for non-use because it had not been used by itself in connection with the services; it had been used only with the word 'Specsavers' written across it, which he saw as altering the distinctive character of the mark. As a result, there had been insufficient use of the wordless logo (ie, without the overlay of the Specsavers wording) to prevent revocation.
The Court of Appeal overturned the first instance findings in relation to the second strapline and the Asda logo.
Lord Justice Kitchin, giving the leading judgement, found that the second strapline infringed Specsavers' word and logo marks under Article 9(1)(c). He found that too narrow an approach had been adopted in applying the 'unfair advantage' test under Article 9(1)(c), and that too much weight had been given to the differences between the straplines. It was held that the average person, on seeing the second strapline, would also make a connection with Specsavers, and that Asda was clearly intending to create and benefit from this association. Therefore, Asda was found to be taking unfair advantage of the market position carved out by Specsavers, in order to convey Asda's own message of value.
The Asda logo was found to infringe Specsavers' logo marks under Article 9(1)(c). The first instance judge had failed to consider the cumulative effect of the campaign (including the straplines) on the impression given to the average consumer. As in the case of the straplines, it was found on appeal that the average person, on seeing the Asda logo, would make a connection to Specsavers, and that this connection took unfair advantage of the reputation and attraction of the Specsavers' brand.
On the issue of infringement under Article 9(1)(b), it was held that the first instance judge had been entitled to take his approach and find that the Asda logo and the use of 'spec saver' puns did not confuse the public.
The appeal against the revocation of Specsavers' wordless trademark was stayed pending reference to the Court of Justice of the European Union (ECJ) for guidance on the correct approach to be adopted where a trademark owner seeks to establish use of the mark on the basis of its combined use with another element.
Overall, the decision provides comfort for brand owners that find themselves the target of a so-called 'brand-beating' campaign that uses or plays on their trademarks. Brand owners can make a potential competitor's task harder by ensuring that their trademarks are used properly. Specsavers' wordless trademark was revoked because there was no real evidence of its use other than with the word 'Specsavers'. Specsavers must now await the ECJ's response to the Court of Appeal's reference, but its position might have been stronger (and the revocation of the wordless logo might have been avoided) by following the trademark mantra: register what you use, and use what you register.
There are also lessons for the brand-beaters. Those familiar with the notorious Puffin dispute will appreciate that Asda has prior form in this area. In that case Asda created a chocolate biscuit that was intended to compete with the market-leading Penguin brand, but Penguin's manufacturer was eventually successful in a claim of passing off. Asda has been bullish in noting that, in this case, neither court found evidence of public confusion. Nevertheless, evidence of Asda's intention to target Specsavers emerged as a key factor in establishing unfair advantage. In future, companies that are intent on living dangerously may wish to place tighter controls on how marketing teams are briefed and how they communicate, in order to avoid internal marketing hyperbole being used as evidence of an intention to piggyback on a competitor's goodwill.
For further information on this topic please contact David Cran or Robert Johnson at RPC by telephone (+44 20 3060 6000), fax (+44 20 3060 7000) or email ([email protected] or [email protected]).
(1) Since Davidoff & Cie SA v Gofkid Ltd  ECR I-389 (Case 292/00), it is well established that Article 9(1)(c) applies equally to identical or similar goods and services.