In esure International Ltd v. Direct Line Insurance PLC, the High Court has denied esure’s application to register a ‘computer mouse on wheels’ device mark. In doing so, it has provided useful guidance on the issue of similarity of marks under sections 5(2)(b) but raised doubt as to whether evidence of confusion is in reality needed to successfully oppose an application under section 5(3) despite ECJ case-law to the contrary.
Direct Line sells insurance and financial services direct to the public via the telephone, internet and email. esure sells similar services using similar methods; albeit with a different emphasis. Since 1990, Direct Line has used the well-known ‘red telephone on black wheels’ device mark in conjunction with its services (for which it has a number of UK and Community trade marks). In September 2004, esure applied to register a device mark which consisted of a ‘computer mouse on wheels’. Direct Line opposed the application on the basis of section. 5(2)(b), 5(3) and 5(4)(a). The Hearing Officer found in favour of Direct Line with regards to the first two grounds (the third ground not being argued at the hearing). esure appealed to the High Court. Mr Justice Lindsay heard the appeal.
Mr Justice Lindsay upheld esure’s appeal with regards to section 5(2)(b) on the basis that there was no material evidence to establish a likelihood of confusion. However, he dismissed the appeal with regards to section 5(3) concluding that the mark esure applied for would, if granted, take unfair advantage of the distinctive character and repute of the Direct Line device mark. Accordingly esure’s application will not proceed to registration.
Contrary to what was recently suggested by Mr Justice Lewison in L’Oreal v. Bellure (in relation to the equivalent infringement provision), Mr Justice Lindsay held that there was an absolute “minimum threshold” (albeit quite low) to establish “similarity of marks” for the purposes of section 5(2)(b). He strongly disagreed with Direct Line’s argument that “it suffices, in order to require the likelihood or not of confusion to be examined, that there is any item or aspect of the marks that is similar. Only if the signs are completely different is it possible to take the view in principle that there is no likelihood of confusion; even a slight similarity requires that likelihood to be examined”. Instead he held that the threshold should be arrived at as follows:
“First, overall impressions of the rival marks are formed, paying full regard to all of the requirements of the autonomous concept of [section 5(2)(b)] similarity [of marks]. Next one has to have in mind the types of confusion which are then relevant. Then the threshold question arises: are those overall impressions such that one can reasonably say that a likelihood of confusion could not thereby be created?”
The Judge relied heavily on the findings of the ECJ in the Vedial community trade mark case where the ECJ held “that the marks could in no way be regarded as identical or similar for the purposes of Art 8(1)(b) of Regulation No 40/94 [and that having found]… that there was no similarity between the earlier mark and the mark applied for, the Court of First Instance correctly concluded that there was no likelihood of confusion, whatever the reputation of the earlier mark and regardless of the degree of identity or similarity of the goods or services concerned”. Mr Justice Lindsay noted that the ECJ came to this conclusion despite there inevitably being “items common to Vedial's word mark and France Distribution's mark with the genial chef. In each of them the letters H-U-B-E-R-T appear and appear, moreover, in the very same order. Again, aurally, there were similarities between the way the two marks would sound.”
If correct, this would appear to set limits on the notion of interdependence espoused by the ECJ in Lloyd Schuhfabrick Meyer v. Klijsen Handel BV, namely that a lower degree of similarity between the marks can be counterbalanced by a greater similarity between the goods (and vice versa).
Mr Justice Lindsay’s reasoning in respect of section 5(3) (article 4(4)(a)) is more problematic. He noted that it was necessary (in order to establish a section 5(3) conflict) to adduce evidence that the public makes a link, albeit not one involving confusion, between the mark and the sign and that such link should arise out of a certain degree of similarity between them. This in itself is uncontroversial.
Mr Justice Lindsay however characterised this as the “Additional Link”. What is not clear is what is it in addition to? It appears that the answer is “the causative link” (the requirement that “but for” the use of the offending sign the detriment to or unfair advantage taking of, the mark would not have occurred). A “mental link” or “mere association” must of course exist for there to be the required causation – use of a sign cannot logically cause such an effect (e.g. detriment to the distinctiveness of another’s mark) unless consumers seeing the sign make a mental link with the mark. However the additional link, in Lindsay’ J’s view, “goes beyond and is additional to the need for a causative link between the use of the sign and the relevant unfair advantage or detriment. The implication appears to be that it requires more than a mere bringing to mind – see Lindsay J’s quotation of Jacob LL’s comment in Intel Corporation Inc v CPM United Kingdom Ltd
"If a trade mark for particular goods or services is truly inherently and factually distinctive it will be robust enough to withstand a mere passing bringing to mind when it or a similar mark is used for dissimilar goods or services”
The judge seems to be of the view his “additional link” requires the arising of a mistaken belief in the existence of a relationship/connection of some kind between the owner of the sign and the mark. In this he appears to be heavily influenced by Jacob LJ’s reasoning in the controversial Intel case (above). In fact Mr Justice Lindsay concluded that such a belief had been established because “even if there was no confusion [as to origin] there was nonetheless a likelihood of an association being made by members of the public, meaning, I apprehend, a belief that Direct Line and esure were in some way associated, that there was a relationship between them”
However this form of association (otherwise known as economic link / indirect confusion) is a subset of the likelihood of confusion which falls squarely into article 4(1)(b), the wording of which is - "A trade mark shall not be registered or, if registered, shall be liable to be declared invalid: (b) if because of its identity with, or similarity to, the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark."
The ECJ in Sabel v Puma clarified this over 18 years ago when it considered ‘whether… Article 4(1)(b) can apply where there is no likelihood of direct or indirect confusion, but only a likelihood of association in the strict sense…” and concluded “It follows from [the wording of this Article] that the concept of likelihood of association is not an alternative to that of likelihood of confusion, but serves to define its scope. The terms of the provision itself exclude its application where there is no likelihood of confusion on the part of the public”.
Earlier in the Sabel judgment, it was made clear that the likelihood of association in the strict sense meant “where the public considers the sign to be similar to the mark and perception of the sign calls to mind the memory of the mark, although the two are not confused” and indirect confusion meant “where the public makes a connection between the proprietors of the sign and those of the mark and confuses them (likelihood of indirect confusion or association)’
The judge’s finding of a mistaken belief in such a relationship caused by the sign is therefore a finding of a likelihood of [indirect] confusion and therefore puts his conclusion on article 4(1)(b) in doubt. Furthermore Sabel also confirmed that such a likelihood of confusion (whether direct or indirect) was not required for article 4(4)(a) (implemented by section 5(3) of the 1994 Act) - “Article 4(3) and 4(4)(a)… of the Directive, which permit the proprietor of a trade mark which has a reputation to prohibit the use without due cause of signs identical with or similar to his mark and do not require proof of likelihood of confusion, even where there is no similarity between the goods in question”
However as the judge found for Direct Line under section 5(3) (article 4(4)(a)) it is unlikely that this problematic judgment will be appealed. Hopefully the ECJ will clarify that the link required by these provisions does not require the arising of a mistaken belief in a relationship between the owner of the sign and the mark, when it provides its answers to the questions raised by the UK court in the Intel case.