Introduction

In the recent case of Frank Industries v Nike Retail, the Intellectual Property Enterprise Court (IPEC) ruled that Nike’s use of the sign "LDNR" in its “NOTHING BEATS A LONDONER” advertising campaign infringed the trade mark “LNDR” used in relation to clothing. The decision emphasises the importance of considering the context in which a mark is used when determining the validity or infringement of a registered trade mark.

Background

Frank Industries Limited (“Frank”) is a company which manufactures and sells upmarket leisure wear for women under the “LNDR” brand which was launched in 2015. Frank owned a UK and an International (EU) trade mark registration for the word “LNDR” (the “LNDR Marks”).

In January 2018 Nike, a well-known global sportswear brand launched an advertising campaign under the slogan “NOTHING BEATS A LONDONER”, using “LDNR” as an abbreviation for “LONDONER”. The campaign included a number of high-profile celebrity endorsements.

Frank issued legal proceedings against Nike for trade mark infringement of the LNDR Marks under Article 10(2) of Directive 2015/2436 (as implemented in the UK by section 10(2) of the Trade Marks Act 1994) and Article 9(2) of Regulation 2017/1001, and for passing off.

Nike denied infringement and counterclaimed for a declaration of invalidity of the LNDR Marks on the basis that they were descriptive.

Prior to the commencement of the trial, Frank had successfully applied for an interim injunction to prevent Nike from continuing with the advertising campaign. The court then directed an expedited trial of the claim.

Key issue

Context was a critical factor in determining the intended meaning of the LDNR and LNDR abbreviations. The key issue that the IPEC had to decide upon was whether, in light of the context in which they were used, the average consumer would perceive the signs LNDR and LDNR as trade marks i.e. as indicating the origin of the goods or services for which they were used.

The average consumer was held to be a purchaser of clothing, in particular women’s sportswear, who is a member of the general public and exercises a moderate degree of care and attention.

Nike’s attack on the validity of the LNDR Marks

Nike argued that the LNDR Marks were invalidly registered by virtue of Article 4(1)(b) and (c) of Directive 2015/2436 and Article 7(1)(b) and (c) of Regulation 2017/1001, as they were an abbreviation for “Londoner” and therefore inherently descriptive. As evidence, Nike submitted Instagram and Twitter posts in which the users were using LNDR as an abbreviation of Londoner. However, these posts consisted of a limited number of users and the majority of them post-dated the filing date of the LNDR Marks.

Frank argued that the average consumer would not perceive “LNDR” to refer to Londoner and, even if it was so perceived, it would not be understood as denoting a characteristic of clothing. Further, Frank argued that even if the LNDR Marks were found to be descriptive, they had acquired distinctiveness through use.

Nike's evidence demonstrated that, when used in an appropriate context in digital media, LNDR was capable of being understood to mean Londoner. In the example posts provided the LNDR hashtag was accompanied by other London-related hashtags, images or references.

However, the evidence did not establish that the average consumer would have perceived the LNDR Marks as meaning Londoner when used specifically in relation to clothing. Further, Nike failed to identify which characteristic of clothing LNDR would denote. Accordingly, the LNDR Marks were found to have a moderately strong distinctive character and Nike’s invalidity action was dismissed.

Infringement of the LNDR Marks

Unsurprisingly, LNDR and LDNR were found to be confusingly similar and, insofar as Nike used the sign LDNR in relation to clothing, the clothing was identical to the goods for which the LNDR Marks were registered.

The principal issue regarding infringement however was whether Nike did use LDNR in relation to clothing. Nike argued that firstly, it was clear throughout the campaign that the origin of the goods being advertised was by use of its own trade marks, “Nike” and the famous “Swoosh” symbol and, secondly, when viewed in context, the average consumer would understand that LDNR was an abbreviation of Londoner, and not as referring to the origin of the goods.

Frank accepted that the average consumer would have understood that this was a Nike advertising campaign. However, it argued that there was a likelihood that consumers would think that there was an official association or collaboration, between Nike and LNDR. Frank relied upon examples of actual confusion supported by indirect evidence of the daily traffic to its website increasing considerably in the first few days after the launch of Nike’s advertising campaign.

Considering the context in which Nike used LDNR, the court found that some consumers would perceive LDNR to mean Londoner but some would not. Further, of those who perceived LDNR to mean Londoner, some would perceive it as also being used as a brand name.

The court therefore ruled that Nike’s use of LDNR was in relation to clothing and LDNR plays an independent distinctive role in, or at the very least is a distinctive component of, each of Nike’s uses which were complained of.

The court continued that “the close and confusing similarity between the trade marks and LDNR, the identity of goods and the moderate degree of attention paid by the average consumers all points towards a likelihood of confusion”. Accordingly, Nike was found to have infringed the LNDR Marks. Frank's passing off claim also succeeded.

Finally, in dismissing Nike’s defence that it used LDNR in a descriptive manner, the court also found that Nike had not acted in accordance with honest practices.

The decision is a helpful reminder of the significance of context in which a trade mark is used not only for assessing validity but also infringement. Further, when determining whether a mark is descriptive, it is important to consider which characteristic of the goods or services in question the mark denotes. Finally, the decision also highlighted that a sign can indicate the characteristics of goods or services whilst also functioning as a trade mark.

Frank Industries Pty Ltd v Nike Retail BV & Ors [2018] EWHC 1893 (Ch).